What is a cross lease?
Cross lease titles have been used for many years as a simple way to subdivide land. Under this title, multiple homeowners jointly own the land, and have the right to use and occupy their own home together with any other area intended for exclusive use.
A cross lease title includes an agreement between the homeowners setting out the terms and conditions of the lease. Typically, the lease requires the homeowners to seek consent from the other lease holders to make any major building or renovation work. The terms of the lease may also provide for the use and maintenance of the common areas, quiet enjoyment, or whether pets can be kept at the properties, amongst other matters.
Needless to say, homeowners may find themselves not agreeing with their cross lease neighbour. Depending on the terms of your cross lease, your neighbour might indeed be able to have a say in what you can or cannot do in your own home.
What does a typical cross lease dispute look like?
We answer many enquiries related to disputes between cross lease neighbours such as:
- My neighbour keeps blocking the driveway;
- The neighbour’s tree is blocking access to my parking spot and they refuse to cut it;
- I want to make renovations but my neighbour is not giving me consent;
- The neighbour’s dog is barking all day long;
- They are having loud parties all the time;
- They have built a swimming pool without telling me;
- The neighbour’s fence is now within the boundary of my backyard.
There are ways in which we can help with these disputes. Mediation and arbitration are the two most popular dispute resolution processes for these disputes.
Mediation
Mediation is particularly effective when the parties would like to repair the relationship with their neighbours. This process encourages the parties to work together to come up with a solution that is mutually acceptable. One of the benefits of mediation is that parties can engage in creative solutions instead of focusing strictly on the terms of the cross lease. Our mediators have high success rates in helping parties reach an agreement and are available to conduct mediation during COVID-19 lockdowns as well.
Arbitration
Many cross lease disputes are resolved by arbitration. The majority of the cross lease agreements contain an arbitration clause, which means that the homeowners have already agreed to refer disputes to private arbitration instead of going to court. Arbitration clauses are often included in cross lease agreements to enable parties to get their disputes dealt with quickly, cost effectively and privately.
One of the main differences between arbitration and court litigation is that in arbitration the homeowners have to choose the decision-maker, but getting agreement from parties already in dispute means this can be challenging. The parties can instead agree on who should appoint an arbitrator on their behalf. All the parties need to do is enter an agreement for NZDRC to appoint an arbitrator.
The homeowners in dispute will also need to decide on the procedural rules that will govern the way the arbitration is conducted. NZDRC’s ECA45 Arbitration Rules are a popular choice for these types of disputes, and they offer the parties a fast and cost-effective arbitration process.
Under these rules, both parties have the opportunity to present their submissions and evidence to the arbitrator with a decision issued within 45 working days. The arbitration process is ‘on the documents’, meaning there is no hearing or meeting in person. This allows for significant time and cost savings.
Want to know more?
NZDRC offers a fixed fee service for cross lease residential disputes.
If you are not sure which process is the best for your situation, please contact us, and we can assist you.
