Defective Cross-Lease Example
Cross-Lease Flow Chart
Background
The flats plan (left) and bird’s eye view (right) show a defective cross-lease title. Why is it defective?
The owners of Flat 3 and Garage 3 have an exclusive lease over these areas only. The renovations made by the owner of Flat 3 to join Flat 3 and Garage 3 have made the title defective.
The title is defective because the owner of Flat 3 has built over the Common Area (circled in red below). The Common Area is jointly owned by Flats 1, 2 and 3 and Flat 3 does not have exclusive use of this area.
In this case, the owner of Flat 3 had to withdraw its listing from the market and resolve this issue with the other owners.
Solution
The owner of Flat 3 had to deposit a new plan depicting the buildings or structures and register a new cross-lease to be in a position to “convey good title”.
