We have had a number of queries recently from clients looking to convert their current cross lease title into a fee simple title.
There are a number of reasons why owners of cross lease titles may decide to complete this type of conversion of their existing title. The conversion to a fee simple title may add value to your property as cross lease titles contain restrictions on your ability to carry out extensions or alterations of the dimensions of your property (from what is shown on your flats plan). This is because the terms of your lease normally provide that you must obtain the consent of the other owners within the cross lease prior to completing any alterations or additions.
Another reason for completing a conversion of an existing cross lease title is that your title may be defective in some way, for example you have completed an extension to your property which is not shown on the flats plan. This would mean the current dimensions of your flat are no longer correctly recorded and this can be considered a defect in the title which may have an effect if you were to sell your property.
Pitfalls to be considered upfront before you start the process are, for example that all parties who are the owners of a cross lease title will need to sign the necessary documentation for this conversion. This process will include discharging any current mortgages which are registered over your title and any of the other cross lease owners’ titles and re-registering over the new fee simple titles. Another consideration is that the Council may require an upgrade to the services located on the property and this can add significant expense, for example they may require the sewer lines for the cross lease properties to be separated or upgraded. There may also be further Council fees which are incurred such as development contributions. There will also be the costs of a surveyor preparing a Land Transfer Plan which records the new fee simple lots and any easements for services and rights of way which need to be granted by any of the parties to enable for example access over what was a commonly owned driveway and is now owned by one party a right of way easement in favour of the other owner is required to allow them to drive over the driveway to gain access to their property.
We would recommend if you are considering a conversion of your cross lease title that you discuss it with us at the outset before incurring any costs.
Source: Anthea Coombes | Senior Associate
Property & Real Estate, Glaister Ennor
