Neighbour Consents and Cross-Leases

Many homes in Auckland’s suburbs sit on cross‑lease titles, which often takes homeowners by surprise when renovation plans run into neighbour consent issues.  A recent Court of Appeal decision has clarified how those consent rules work.

What is a cross-lease?

Under a cross‑lease, each owner has two interests:

• a leasehold title to their flat (only the building and not the land or airspace above); and
• a proportionate undivided share of the underlying land with the other owners, as tenants in common.  This is referred to as the common property.

Portions of the common property are usually allocated for the use of a particular owner as “exclusive use” or “exclusive occupation” areas, such as gardens, driveways, or courtyards.

Because ownership of the common property is shared, before any structural alterations or additions are made to it, most cross‑leases require prior written consent of owners.  Carrying out work without consent can expose an owner to being ordered to halt construction work, restore the building and land to its original condition and/or pay compensation.

The Court of Appeal’s decision

In Liow v Martelli (2026), neighbours on a cross‑lease could not agree on proposed alterations, including:

• increasing the size of a 114.5m² house by 54m², which closes the boundary gap with the cross-lease neighbour from 6m to 1.4m.
• adding an in-ground swimming pool of 27.2m2 1m from the boundary.
• adding new decking of 28.8m² to connect the house to the swimming pool.

The arbitrator applied the long-standing rule that consent is reasonably refused if the impact on a cross-lease neighbour is more than “trifling”.

The Court of Appeal has now confirmed that that approach was wrong, noting that cross‑leases usually run for around 999 years, during which buildings will inevitably need renovation or rebuilding, and planning and building rules will change.  It is not realistic or sensible to treat cross‑leases as requiring properties in their original form to be preserved forever.

Instead, the correct approach is now a two‑stage, fact‑specific inquiry:

First, identify the concerns of the cross-lease owners.

Second, consider the interests of all the lessees and the cross‑lease context, including:

• impacts on privacy, light, air, views and appearance;
• effects on property value or future development potential;
• whether similar alterations are common in the neighbourhood;
• the planning rules;
• the counterfactual;
• whether minor design changes could reduce impacts on owners; and
• whether the proposed alterations cut across entitlements under the cross-lease.  

As the Court of Appeal observed, cross‑lease ownership inevitably involves a degree of “give and take, live and let live”.

The Takeaway

Renovating a cross‑lease home requires early planning, open communication with neighbours, and a clear understanding of shared ownership rights.

If you’re thinking about altering a cross‑lease property or working through a neighbour consent issue, the team at Steindle Williams Legal is happy to help you work through the options.

This article is for general informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy of the information, readers should not rely on this article as a substitute for professional legal advice.