Guide On Property Crossover Leases

What is a crossover lease?

A crossover lease is when two people live in the same building, but have their own flat. Essentially, a building with two seperate flats. Each homeowner has a lease to the flat they own AND the freehold to the other flat in the building. They are commonly used with maisonettes. Here’s a visual:

Crossover Lease

Things to remember about crossover leases

  • There will always only be two people involved with a crossover lease (unless one person owns both flats), and they are the two owners of each flat in the building. There is no external landlord.
  • The lease of the one flat and the freehold of the other always stay together and should always both be mortgaged to the lender.
  • Not all mortgage lenders will give you a loan on a property involved with a crossover lease. If you plan on purchasing, you should arrange a mortgage offer before making any offers.
  • Crossover leases are common in certain areas of the country but considered a defective title in other areas.
  • Crossover leases aren’t clear-cut to deal with. You should consult with your solicitor to find out all the implications involved with the property.
  • If the property has a roof, it’s important to carefully scrutinise the leases to see if development is allowed in that space and who has right over the space.
  • If you’re a leaseholder, you should check the freeholder’s (your neighbour’s) lease to see if you need permission to make alterations to your flat and vice versa.

Unfortunately I don’t know too much about crossover leases. If anyone else knows more about the subject, please let me know and i’ll fill in the gaps.

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2 Comments- Join The Conversation...

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cjk 29th September, 2017 @ 15:22

I have a cross over lease . I own the freehold of the down stairs and the downstairs owns the freehold of mine. We both have leases. It was arranged to have a limited company which has now been set up by a solicitor so that both freeholds could be put into the company to enable the cross over lease to merge into one and both own our own flats share of the freehold and also extend the leases to 999. There are two flats only. I live in 1st floor. The ground floor has now advised solicitor that he does not intend to transfer his freehold into company but would still proceed with extending lease. He has advised he wishes to protect his freehold. I can not see why he is doing this. His Freehold is in disrepair and needs maintenance urgently. He has not carried out any work for 25 years on it . I took property on 18 months ago where he advised that we would sort the freehold and lease out and pay for works as it should be 50 -50 . What can I do to get him to transfer the freehold into the company and get this cross over lease changed????.

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James 10th October, 2017 @ 13:31

I take it you have concerns about the cross-over lease affecting your being able to get the remedial works done?

Changing the status of the freehold will not alter his current obligations to carry out necessary maintenance on the property which should be a shared responsibility determined by the terms of your lease regardless.

Whatever his reasons, if the owner of the downstairs flat doesn't want to transfer his freehold to a company then he doesn't have to. Legally there is nothing you can do to change that. Also if going ahead, it is the freehold that would merge, not your leases.

The cross-over scheme that you have is actually very common where there are only two flats in a property, admittedly more so in the North where it is more popular. Though it is often thought unpopular with mortgage lenders it works well enough provided the lease is set up properly and is better than having a company involved. It is often the case that solicitors are the stumbling block in preventing potential buyers.
A competent conveyancing solicitor will refer to the Council of Mortgage Lenders’ Handbook for guidance on the requirements for obtaining a mortgage. Most high street lenders the majority of which are members comply with this. Although it in not as straightforward as other leases and involves extra work on the part of the solicitor, many lenders accept this type of lease with certain provisos and, providing the lease is not defective in any way.

Where you have two leaseholders with equal shares in a company which effectively becomes the landlord, as directors of that company you would have a dead-lock situation if you wished to enforce a clause in the lease but they did not, making it potentially difficult to resolve because you would be acting against yourselves. That is why it's generally not advisable to have a company where there are only two flats.

The other alternative is for Tenants in Common with an entry at the Land Registry which states that dispositions of the freehold can only take place in accordance with the deed of trust which can in turn say that if you can't find the other flat owner, only one need sign to "transfer" the freehold. This is a more popular choice in properties with two flats, however this again can have it drawbacks.

See https://www.lease-advice.org/article/owning-share-freehold-flat/

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