If you’ve ever wondered, “Can my neighbour stop me renovating my cross-lease property?”, the answer is: sometimes, yes. Cross-lease properties are subject to unique legal rights and obligations, and depending on the work you’re planning, you may need your neighbour’s consent before you can go ahead. A recent Court of Appeal decision, Liow v Martelli [2025] NZCA 239, has changed the legal approach to one of the most common issues affecting cross-lease owners: when consent for alterations can be refused. What is a cross-lease? Under a cross-lease arrangement, each owner holds an undivided share of the underlying land while leasing the area occupied by their home. This means that although you may think of the property as “your house”, there are legal rights and obligations shared with the other cross-lessors. Most cross-lease titles contain restrictions requiring the consent of the other owners before certain structural alterations can be carried out. These requirements exist because changes to one property can affect the rights, enjoyment or value of the other owners’ interests. What happened in Liow v Martelli? The dispute arose after one owner sought consent from the neighbouring cross-lessors to carry out alterations to their property. Consent was refused, and the matter ultimately reached the Court of Appeal. For more than three decades, courts had generally relied on an earlier decision from 1991 when considering whether consent had been unreasonably withheld under a cross-lease. In Liow v Martelli, however, the Court concluded that the earlier approach was incorrect and should no longer be followed. Instead, the Court confirmed that there is no single rigid test for determining whether consent has been unreasonably withheld. The correct question is whether a reasonable cross-lessor, acting in light of the purpose of the consent requirement and the interests of all parties, could have refused consent in the circumstances. This means that every dispute will depend on its own facts. What does this mean for homeowners? The decision does not mean that you no longer need consent before carrying out alterations. If your cross-lease title requires consent, you must still obtain it before undertaking work that falls within those requirements. However, if consent is refused and a dispute arises, the courts will now consider the individual circumstances rather than applying the narrower legal approach that had previously been used. Factors that may become relevant include: the nature and extent of the proposed alterations; whether neighbouring owners are genuinely affected; the purpose of the consent requirement; the impact on the rights and interests of all cross-lessors; and whether the refusal is objectively reasonable. Why this matters before you renovate Many owners assume that because they’re only altering “their” home, they can proceed without involving anyone else. Unfortunately, that isn’t always the case with cross-lease properties. Common projects that may require consent include: building extensions; adding garages or sleepouts; enclosing decks or patios; making structural alterations; and changes that alter the footprint shown on the flats plan. Proceeding without the necessary consent can create significant problems later, particularly when you come to sell your property. Buying a cross-lease property? This decision is also a reminder for prospective purchasers. Before purchasing a cross-lease property, it’s worth checking: whether any previous alterations were properly approved; whether the flats plan accurately reflects the buildings on the property; whether there have been disputes between owners; and whether you have future renovation plans that may require consent. Understanding these issues before you purchase can help you avoid unexpected costs and disputes later. How we can help Cross-lease titles can be surprisingly complex, and every property is different. Whether you’re buying, selling, planning renovations or dealing with a disagreement with another cross-lessor, obtaining legal advice early can save significant time, cost and stress. Our property team can review your title, explain your rights and obligations, and help you navigate the consent process so you can move forward with confidence. If you’d like advice about your cross-lease property, get in touch with our team.
