Criss-Cross/Tyneside Leases

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Lease Law
by Sarah Osborne

Criss-cross or cross-over leases (sometimes referred to as a Tyneside lease as these became common in the North East of England) occur when multiple flat owners own split parts of the same building while granting each other cross-rights over the other flat owners’ respective portions.

Structure of Criss-Cross Leases

In a criss-cross lease setup, each flat owner holds the freehold of one specific part of the property (such as a flat or apartment), while simultaneously being granted a long lease over the other part(s) from the other flat owner(s). These leases are interdependent, meaning the rights and responsibilities of each leaseholder are closely linked to the others in the arrangement. Often, there are shared or communal areas such as hallways, gardens, or parking spaces, which can complicate maintenance and ownership obligations.  In the majority of cases, there are normally only two flats in one building with each flat owner being the freeholder of the other flat and vice versa.

Advantages of Criss-Cross Leases

  1. Shared responsibilities: Both owners will have shared legal duties to make sure that the overall building remains in good condition. To illustrate, the owner of the upstairs flat handling the upkeep of the roof whilst the downstairs flat maintains the foundations.
  2. Equal enforcement: Both the downstairs and upstairs owner will have the legal right to enforce whatever conditions, or covenants, are included in their lease  without the usual complication of having to contact an external landlord to enforce these requirements.
  3. Lower Initial Costs: Since individual parts of the building are leased between owners, there may be a lower upfront cost in terms of repairs without having to pay third party managing agent’s costs.

Disadvantages of Criss-Cross Leases

  1. Resale and Mortgage Issues: Criss-cross leases can make it difficult to sell or obtain a mortgage on a property, as lenders might have concerns about the future success of the joint upkeep of the property with the other freeholder/leaseholder, and they could simply decide that the situation is too complicated to justify approving the loan that the buyer is seeking
  2. Renovation restrictions: Depending on the terms of the leases that both flat owners are required to follow, there could be significant restrictions on the renovations or other alterations that one flat owner can make without the consent of the other owner. In situations where there is a dispute between flat owners over alterations, this could discourage potential buyers who have ideas for making significant changes to the property.
  3. Potential for Disputes: Shared responsibilities and reliance on the cooperation of other leaseholders can lead to disputes over upkeep, repairs, or lease obligations. Conflicts may arise if one party fails to meet their responsibilities, potentially causing maintenance to be neglected.

Remedies for Criss-Cross Lease Issues

  1. Lease Extension or Variation: Leaseholders can negotiate to extend or vary the lease terms to clarify responsibilities, address ambiguities, or improve the legal standing of the lease. This can help resolve potential disputes or address concerns raised by lenders.
  2. Freehold Acquisition: One solution to avoid the complications of criss-cross leases is for leaseholders to collectively purchase the freehold of the property. This would allow the legal title of the building to be restructured to a more typical title structure where the freehold of the whole building is jointly owned by the leaseholders and a lease is granted to each leaseholder over their flat. This would simplify ownership and management of the property.
  3. Mediation and Legal Action: In cases of disputes, parties may seek mediation to resolve issues amicably. If this fails, legal action can be pursued through property tribunals or courts to enforce lease obligations.

Should you have any queries regarding a criss-cross lease and/or would like further information please do not hesitate to contact Sarah Osborne on sarah@leaselaw.co.uk or 0204 524 3340.