Freehold, cross-lease or unit title: what are you actually buying?

Two houses on the same street can look identical and be completely different things to own. That difference is the title type, and it decides what you control, what you share, who you’re bound to, and — in one specific case — whether the bank will lend you the money at all.

New to buying a home? See all the steps, in order →

Most buyers treat it as paperwork trivia. It isn’t. It’s the difference between owning a house and owning a share of an arrangement.

Rules and figures below are current as at September 2026.

The one document to read first

Before the listing photos, before the open home — get the record of title. It’s the official LINZ document that says what you’d actually own. Your lawyer can order it, or you can order one yourself for a small fee.

Near the top, it shows a title type, and separately an estate (such as fee simple). The title type is the one to look for:

Title type	What it means
Freehold	You own the land and the buildings on it, subject to any registered interests
Cross Lease	You co-own the section with neighbours and lease your house back from the group
Unit Title	You own your unit and have an interest in the common property; a body corporate manages the development. The estate is commonly Stratum in Freehold
Unit Title (stratum in leasehold)	A unit title on leased land — treat with real caution, see below
Leasehold	Someone else owns the land; your right to use it comes from a lease — see the warning below

Listings get this wrong more often than you’d expect. The record of title is what counts.

Freehold: the default

You generally own the land and the buildings on it, subject to any registered interests on the title. No cross-lease co-owners, no body corporate and no ground rent inherent to the title. Within council rules and any registered easements or covenants, you can renovate, extend, subdivide or leave it alone.

This is the most straightforward form of ownership in New Zealand, and the one most first-home buyers picture when they imagine owning a home. It’s often attractive to buyers because of that simpler ownership structure.

From a title-type perspective, freehold is usually the simplest. The main title issues to check are easements (someone else’s right to use part of your land, such as a shared driveway or a drainage pipe), covenants (restrictions on what you can do, common on newer subdivisions) and any other registered interests. Your lawyer reads these as standard — but “simplest title” doesn’t mean “skip the due diligence.”

Unit title: apartments and townhouses

This is a common structure for apartments and for some townhouse and multi-unit developments. You own your unit and have a beneficial share in the common property — such as lifts, driveways and gardens — which is legally owned and managed through the body corporate, a group every owner automatically belongs to.

What that actually means day to day:

• You pay body corporate levies, typically quarterly or annually, to fund insurance, maintenance and shared costs. They vary enormously between buildings — from a few hundred dollars a year for a small townhouse complex to many thousands for an apartment tower with lifts and a gym.
• Decisions about the shared parts are made by vote. You don’t get to unilaterally repaint the exterior or replace the roof.
• If the building has a problem — a failing lift, a weathertightness issue, a major repair — some or all owners may have to contribute through body corporate levies, depending on how the costs are allocated.

The protection most buyers don’t know they have. Sellers of unit title properties must give you a pre-contract disclosure statement before you sign, and a pre-settlement disclosure statement at least five working days before settlement. Expanded disclosure rules took effect on 9 May 2023: the pre-contract statement must now include the body corporate’s financial information, maintenance details, known defects or weathertightness issues, and three years of meeting minutes.

If those statements are late, incomplete or inaccurate, you may be able to delay settlement or cancel the agreement — subject to the statutory requirements and strict notice periods. That’s a real right, not an automatic one, and it’s why reading those documents properly, with your lawyer, is the single most important thing you can do on a unit title purchase. The meeting minutes in particular are where you find out about the argument over the leaking roof before you become part of it.

Cross-lease: the one that catches people out

Cross-lease is a uniquely New Zealand structure from the 1960s to 1990s. It was a cheap way to put two or more houses on one section without a full subdivision. Roughly: you and your neighbour jointly own the whole piece of land, and each of you leases your own house back from the group — typically for 999 years.

That sounds fine, and often is. But two things make it different from freehold in ways that matter.

1. Changes may need your co-owners’ agreement. Many cross-leases restrict structural alterations or new structures. Depending on the lease, you may need the other owners’ consent, and significant changes to the building footprint may also require the flats plan and title documents to be updated. Always check the actual lease — the rules aren’t identical on every cross-lease.

The good news for buyers: this got fairer in 2026. Many cross-leases say consent must not be unreasonably withheld. A 1991 High Court decision had imposed a restrictive test for deciding when refusal was unreasonable. On 16 April 2026, the Court of Appeal held in Liow v Martelli that the old test was wrong in law. An application for leave to appeal to the Supreme Court has since been filed.

As the law stands, whether consent can reasonably be withheld depends on the facts and the interests of those involved — a neighbour can still say no where there’s a genuine impact, but the assessment is more balanced than it was. If this matters to your purchase, ask your lawyer where things sit at the time.

2. The defective title trap. Cross-lease titles usually include a flats plan showing the building footprint and exclusive-use areas. Some older titles may not have one attached. If the physical building footprint no longer matches the plan, the cross-lease title may be defective.

Here’s the trap: a previous owner adds an extension, encloses a deck, or puts up a carport — and never updates the flats plan. Now the buildings don’t match the registered document.

What that costs you:

• Fixing it can cost thousands — sometimes well into five figures — because survey, legal, council and LINZ work may be required, along with cooperation from the other cross-lease owners.
• It can affect your finance — a lender may require it to be fixed, or impose additional conditions.
• Selling becomes harder later, because the next buyer’s lawyer will find it too.

And because you inherit the title as it stands, this becomes your problem the day you settle — even though someone else caused it years ago.

The check: get the flats plan alongside the record of title, and compare it — physically — against the house you walked through. Extra deck? Different garage? Room that isn’t on the plan? Ask before you go unconditional, not after. Your LIM report helps here too, because unconsented work often shows up as a gap in the consent history.

On price: cross-lease homes can sometimes be priced below comparable freehold properties, which can make them attractive to a first-home buyer. But don’t assume a lower price means a bargain — understand the lease and check the title first, so you know the price reflects the shared arrangement and not a defect you’re about to inherit.

Leasehold: stop and get advice

Rare for a standalone first home, but it does turn up — some central-city apartments, some lifestyle and retirement developments, some older ground leases. Someone else owns the land, and your right to occupy and use it is governed by a lease. Depending on the arrangement, you may also own the buildings or improvements. Either way, you pay ground rent to keep using the land.

The risk isn’t the rent you pay today. It’s what happens at the rent review. Ground rents are typically reset at intervals — sometimes based on the land’s current value — and when land values have risen sharply, the new rent can be a shock. Because the future cost is uncertain, leasehold properties can be harder to sell and finance, and they’re often priced accordingly.

If a listing looks unusually cheap for its size and location, check the title before you get excited. If it says leasehold, treat that as a reason to slow down and get specific legal advice about the rent review terms, not a bargain to grab.

The three, side by side

	Freehold	Unit title	Cross-lease
What you own	Land and buildings, outright	Your unit; shared areas jointly	A share of the land; a lease of your house
Who you’re bound to	No body corporate or cross-lease arrangement	The body corporate	Your co-owners, via the lease
Ongoing shared cost	Usually none inherent to the title, though shared easement costs can apply	Body corporate levies	Shared maintenance of common parts (driveway, drainage, fences)
Changing the building	Council rules plus any title restrictions	Body corporate approval for shared parts	May need co-owner consent; footprint changes may require the plan and title to be updated
The document to read	Record of title	Pre-contract disclosure statement	Flats plan — and compare it to the house
The trap	Easements and covenants you didn’t notice	Levies and hidden building problems in the minutes	A defective title you inherit

What to actually do

Get the record of title before you fall in love with the place. It’s the fastest way to know what you’re actually looking at.

On a unit title, read the pre-contract disclosure statement with your lawyer — especially the minutes. That’s where building problems, levy increases and disputes live. Those rights only help if you know they’re there and act within the required timeframes.

On a cross-lease, compare the flats plan to the physical house. Walk the property with the plan in hand. Anything built that isn’t on the plan is a question for the seller, and a possible cost for you.

On leasehold, don’t negotiate on price until you understand the rent review. That’s where the real number hides.

Ask your lawyer to explain the title, not just check it. “It’s fine” is a conclusion. What you want is: “it’s cross-lease, the flats plan matches, here’s what you’d need co-owner consent for.”

This article is general information only, not legal advice. Title types have real legal and financial consequences — have your lawyer review the record of title and any related documents before you commit.

Official sources

• Settled.govt.nz — types of property ownership
• Unit Titles Act 2010 and the 2022 Amendment Act — unittitles.govt.nz
• Real Estate Authority — unit title guidance
• Liow v Martelli [2026] NZCA 101 — Courts of New Zealand
• Land Information New Zealand — for ordering a record of title and flats plan
• Your lawyer — for what the title actually means for the property you’re looking at