Have you wasted money on fixing up a cross-lease?

Probably if you have responded to that question. A test case on cross-leases is needed.  Millions of dollars may have been wasted on these legal titles.  This may be the case as the fundamental reason for one specific aspect of cross-leases has been long forgotten.  That is the reason an equal share in the freehold is granted to the various owners.

Current perceived wisdom has it that the building footprint must be exact showing the outline of the construction.  In turn that has led to any physical changes been detailed by a surveyor, a new footprint provided, new title issued and so on.  The original cross-lease scheme, devised by a North Shore practitioner, was an arrangement to overcome town planning requirements and allow the preponderance of ¼ acre sections to be subdivided.

Equal sharing of the freehold was adopted as the mechanism to ensure equal rights to the town planning resources (precursor to the RMA) applicable to the total coverage of the original section. It had, and possibly still does, nothing to do with the “footprint”. Cross-leasing was introduced as a means to share that town planning resource.  The money spent collectively in this possibly misguided effort provides little real tangible benefit in the majority of cases.

The original titles of this kind didn’t, and some still don’t, have a footprint plan. A declaratory judgement on this subject is needed and one that traverses the history of cross-leases and why were introduced. In similar fashion to restrictive covenants, cross-leases are a civil contract between the owners of the underlying fee simple title, and nothing more.