Cross Lease Series (Vol.1)
Garage not shown on your cross-lease flats plan? It may not be defective after all…
Cross leases have an impressive ability to turn an ordinary garage into a complicated legal issue. A purchaser looks at the flats plan, notices the garage is missing and suddenly there is talk of a defective flats plan, surveyors, neighbour consent and an expensive cross-lease update.
Sometimes that concern is justified. But not always.
A detached garage or other independent structure situated within an area allocated for the exclusive use of one cross-lease owner does not automatically make the flats plan defective simply because it is not shown on the plan.
The distinction has recently been considered by the Court of Appeal in Liow v Martelli [2026] NZCA 101.
What does a cross lease actually cover?
With a cross lease, an owner generally has:
an undivided share in the underlying land with the other owners; and
a long-term lease of their particular house or “flat”.
The flats plan may also identify exclusive or restricted use areas, such as a private backyard, as well as common areas such as a shared driveway.
This means the flats plan is not necessarily an inventory of every physical structure on the property. The important question is whether a structure forms part of the leased building or is an independent improvement situated within an exclusive use area.
When is a flats plan defective?
The usual example is an extension to the house.
If the flats plan shows the original footprint of the dwelling but an owner later adds an attached and enclosed family room, the physical dimensions of the leased building have changed.
The registered flats plan may therefore no longer accurately reflect the leased premises.
That is different from a detached structure standing within land already allocated for that owner's exclusive use.
What about a detached garage?
Consider a house which remains exactly as shown on the flats plan, but has a detached garage behind it.
If the garage:
is physically separate from the house;
does not enlarge or alter the dwelling;
sits wholly within the exclusive use area; and
is not intended for common use,
the fact that it is not shown as part of the leased dwelling does not necessarily mean the flats plan is defective.
This distinction is also reflected in clause 6.4 of the standard ADLS/REINZ Agreement for Sale and Purchase.
Liow v Martelli
The Court of Appeal provided useful guidance in Liow v Martelli [2026] NZCA 101.
The Court confirmed that a cross lease is generally of the physical building comprising the flat rather than the land on which it sits. Importantly, there is no requirement that every building or improvement must form part of the leasehold estate.
Independent improvements can be constructed within a restricted or exclusive use area without necessarily affecting the cross-lease title.
The Court distinguished these from alterations which change the dimensions of the leased flat. If an addition extends the flat beyond its leasehold boundary, the lease and flats plan may need to be amended.
Consent is a separate issue
Even where a detached garage does not make the flats plan defective, there is another question:
Was consent required under the cross lease before the garage was built?
Many cross leases contain covenants requiring the consent of the other owners before buildings or structural alterations are undertaken.
It is therefore possible for a garage not to create a defective flats plan but still raise an issue regarding historic consent.
That distinction matters. There is little benefit in undertaking an expensive cross-lease update if the real issue is simply whether the required consent was obtained.
Council approval is separate again
Council compliance is a third issue.
For any garage, shed, deck, sleepout or other improvement that does not appear on the flats plan, consider three separate questions:
Has the leased building changed so that the flats plan is defective?
Was consent required under the terms of the cross lease?
Were the necessary Council approvals obtained?
These issues should be considered separately rather than simply concluding that a structure is problematic because it does not appear on the flats plan.
Buying or selling a cross-lease property?
If you are selling, it is worth investigating any discrepancies before putting the property on the market.
Obtain the record of title, flats plan, memorandum of lease, relevant Council records and any historic written consents and compare those documents with what physically exists.
Purchasers should undertake the same exercise during due diligence.
The key questions are whether the structure is attached or independent, where it is situated, whether it alters the leased building and what the particular cross lease says.
The takeaway
A garage not shown on a flats plan does not automatically mean the flats plan is defective.
The position depends on:
what is actually leased;
where the garage or other structure is situated;
whether it changes the dimensions of the leased building; and
the wording of the particular cross lease.
There may still be a consent issue or a Council compliance issue, but those are separate questions.
Before assuming an expensive flats plan update is required, identify exactly what the problem is.
If you are buying or selling a cross-lease property and the flats plan does not appear to match what is physically on the property, Kate Chivers and the Turner Hopkins property team can review the relevant documents and advise on the most practical way forward.
Sources
Liow v Martelli [2026] NZCA 101.
Land Information New Zealand, Cross lease CSD guidance.
Resource Management Act 1991, s 2.
ADLS/REINZ Agreement for Sale and Purchase of Real Estate, Eleventh Edition 2022 (3), cl 6.4.
Liow and Tan v Martelli and Keith, SC 52/2026 – application for leave to appeal.
This article provides general information only and is not legal advice. Each cross lease should be considered by reference to its particular title, flats plan, memorandum of lease, sale agreement and relevant Council records.