Check before you start building
Freddy is packing his bags for his trip to Aussie. The cows are dry, the grass is looking good, and he is heading off for his yearly holiday and leaving the farm in the hands of his trusty sharemilker.
The phone rings. It is his elderly mother. “Hi Mum, how’s things, we are heading off to Aussie tomorrow, we are really looking forward to it, time for a break from the farm.”
“Freddy,” she says, “you know how we built that new garage on my unit? Well the agent tells me those people who are looking at purchasing it are not happy about it. What should I do?”
“Oh mum, that garage has made your property look really good, I will chat to pebbles and give you a call back”.
He quickly phones Pebbles who tells him that grandma’s unit is on a cross lease title. “What does that mean?” asks Freddie. “Dad it means that ownership of the land is shared with the owners of the other unit next to Gran’s. Gran owns an undivided one half share. A Cross lease title has a flats plan attached to it. If Gran has altered the outline of the building, which she has by building a garage, she should have contacted the neighbours and asked for their agreement to build the garage and also for their agreement to amend the flats plan. This would have involved her getting a surveyor and them redrawing the flats plan. If the neighbours had a bank mortgage, they would have needed to consent to the new plan also.
“As Gran is selling the property and the flats plan has not been altered it would be a good idea for the agent to include a clause in the agreement for the purchaser to acknowledge that a garage has been built on the property and it is not recorded on the flats plan. The purchaser will need to accept the title in its current form and agree not to requisition or object to the title.
“If you had given me a call before she went ahead with the garage, we could have had a look at fixing her title up then.
“Dad, is Gran still looking to move into that flash new rest home down the road from her? If she is, it would be a good idea if you told her to send me the rest home documentation to look over before she goes any further.”
“I will do that Pebbles and thanks for the info, I will ring your Gran back and tell her. If the agent needs a hand with specific wording I will tell her to get the agent to contact you. Thanks Pebbles, we will see you when we get back from our trip. The cows might be calving by then.”
The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.
If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser.