Under a cross lease, owners shared a piece of land and typically meant that any major structural changes to the property and common areas required all those on it to be in agreement.
However, the neighbours at 18A initially opposed the proposed plans for the garage and the move to split the land into freehold sections.
Today, lawyers presented in the High Court at Auckland an agreement reached between the two parties that would see the cross lease agreement split into five freehold sections.
The matter now awaits resource consent from the council. If it's granted, it will make it much easier for Mr Finn to sell his property to the interested buyer.
Neil Finn's legal representation said neighbours initially didn't consent as they liked to have control over what happened at the property.
But after some negotiating they'd managed to reach an agreement.
According to the legal team initial plans for the garage and access way were no longer going to go ahead.
The potential buyer remained interested in the property but this was conditional on the house no longer being part of a cross lease.
It could take up to three months for the land to officially become freehold.
Auckland Council said it had not yet received the application for a change in title.
But manager resource consents Mark White said it was a relatively common process.
"Cross lease titles tend to be single titles which are split between multiple owners, where all owners have an undivided share in the underlying title. Within the cross lease there may be common use areas, and exclusive or restrictive covenant areas.
"When the council looks at these applications the key considerations are ensuring each allotment is adequately serviced and all the easements are protected."
In July last year, Mr Finn's property, which was opened on a vendor bid of $3 million, passed in at auction with no bids.
According to Auckland Council information capital value for the property as of 2014 was $5.1 million.
Mr Finn lived in the property with his young family for 13 years, between 1993 and 2006. Since then, he's rented the property - and has been trying to sell since July last year.
The 114-year-old villa that has five bedrooms, five living areas and three bathrooms and a 480sq m recording studio, is where both his sons, Liam and Elroy, grew up.
It is also where Neil Finn wrote and recorded some of his most famous songs, including Not the Girl You Think You Are, She Will Have Her Way, and Won't Give In.