Government measures in key jurisdictions 5th edition - Flipbook - Page 95
New Zealand
Property
Commercial property
Have any changes
been made to
the laws around
property, rent and
enforcement?
Many commercial property leases include a clause providing for an abatement of a “fair
proportion” of rent and outgoings if the property cannot be used during an emergency. The
Covid-19 pandemic is an emergency in terms of those leases, but the question of what is a
fair proportion is to be negotiated between the landlord and tenant depending on their
own particular circumstances.
The Government has established a commercial rent dispute service, which provides
subsidised mediation or arbitration for small businesses if an agreement cannot be reached
on the amount of the abatement. A previously announced change to legislation to imply an
abatement clause will no longer happen. This service will be available until the end of March
2021.
Details of the operation of the standard lease clause are available here.
The Government has also made changes to the powers under the Property Law Act 2007
(PLA) in respect of Landlords’ rights to terminate commercial leases and the powers for
Mortgagees to take possession or sell mortgaged land. The changes mean that a landlord
now needs to wait thirty working days (rather than the previous ten working days) before they
can cancel a lease for rental arrears. This change will be in place until six months after the
Epidemic Preparedness (Covid-19) Notice 2020 expires or is revoked (this is currently due to
expire on 22 March 2021, unless it is renewed).
Residential property
Two significant changes were made to residential property rentals; restrictions on
termination, and prohibitions on rental increases. For three months, residential
tenancies could not be terminated unless:
• the tenant terminates the tenancy;
• the tenancy is terminated with the written agreement of both the landlord and the tenant;
• the termination is in accordance with some specific provisions such as death of the sole
tenant, abandonment, or serious damage; or
• an order is made by the Tenancy Tribunal terminating the tenancy for anti-social
behaviour.
Fixed tenancies which expired during this time continued as periodic tenancies and were
then subject to the same termination restrictions. This provision ended on 25 June 2020. For
six months, rent could not be increased under a residential tenancy. In addition, any increase
notified before the commencement date, which had not yet taken effect, no longer applied.
The freeze was in effect from 26 March to 25 September 2020.
Overseas Investment
The Overseas Investments Act regulates the purchase of assets in New Zealand by
overseas people, including the purchase of any “sensitive land”. The Government has
introduced a temporary emergency notification regime designed to ensure that sales of
business assets or business interests to overseas investors as part of the economic recovery
phase (particularly “distressed” sales) are in New Zealand’s national interest.
The emergency notification regime requires all share or business asset purchase transactions
to be notified to the OIO if an overseas person is: acquiring an ownership interest of more
than 25%; increasing an existing ownership interest to or beyond certain ownership
thresholds (50%, 75% or 100%); or acquiring business assets representing 25% or more of an
existing business. The wording of the change means that the sale of land and buildings could
be captured by the emergency notification regime where they are used as part of a business,
even if the relevant land is not “sensitive land”.
Details on the changes to the overseas investment regime are available here.
Government measures in key jurisdictions
95
