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About

 

About Greenwood Roche

Two pivotal areas define the way we’ve shaped our firm to deliver more to our clients:
  • Clearly defined specialist areas, each with a significant depth of focused, legal expertise.
  • The acknowledgement of a trusted place at a client’s table, where we deliver the high levels of care, rigour and performance our clients expect of themselves.

We don’t stand apart. When briefed by a client we become an embedded part of the team. We engage our depth of knowledge and commercial acumen to swiftly identify what’s required from the outset – and set about delivering it. It’s not a revelatory approach, but it is refreshing, competitive and deeply efficient – and enjoyable.

It has earned us a market reputation as a leader in our areas of expertise where we have established:
  • A prominent position on the “All of Government” external legal services panel.

  • A substantial public and private sector client base.

  • Regular appointments to nationally significant projects.

They operate with a level of charisma in the room – certainly not order takers. They sense the gaps then find the solutions.”
National coverage

To ensure our specialists are always where they’re needed, we operate as one firm with hubs in Auckland, Wellington and Christchurch. We advise on a range of public and private sector projects.


Specialist expertise

Recent projects
New Dunedin office for Accident Compensation Corporation

Recent Projects

New Dunedin office for Accident Compensation Corporation

New Dunedin office for Accident Compensation Corporation

Ngāi Tahu and the Accident Compensation Corporation have announced the development of a new office complex in Dunedin.


Greenwood Roche lawyers Bob Roche and Sam Green recently assisted ACC with the development of a new office building in Dunedin through a 50/50 partnership with Ngāi Tahu.

The Dunedin hub is essential for ACC’s national operations and this purpose-built four-storey complex will house 650 staff who are currently spread across four separate buildings.

Construction of this modern and environmentally friendly building is set to start this year. The 8,000 square metre building will be located on Dowling Street.


Specialist expertise

Key lawyers involved

Similar projects
Ministry of Business, Innovation and Employment – New National Office Redevelopment

Recent Projects

Ministry of Business, Innovation and Employment – New National Office Redevelopment

Ministry of Business, Innovation and Employment – New National Office Redevelopment

At over 20,000m2 of space, the redevelopment of a landmark Wellington building has provided the New Zealand Government’s largest Ministry with a substantial new National Office.


Greenwood Roche has successfully assisted the Ministry for Business, Innovation and Employment in the redevelopment and lease of MBIE’s new National Office premises in Wellington.
 
Greenwood Roche has continued to provide advice to MBIE throughout the course of the redevelopment, including assisting with the sale of the building to an NZX-listed property investment company during the project.
 
MBIE’s new National Office is one of a number of substantial redevelopment projects within Wellington on which Greenwood Roche has acted.


Specialist expertise

Key lawyers involved

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New National Head Office for Transpower

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New National Head Office for Transpower

Greenwood Roche represented Transpower New Zealand Limited in relation to the redevelopment and lease of Transpower’s future national head office at Boulcott Street, Wellington.


Transpower plans, builds, maintains and operates New Zealand’s high voltage electricity transmission network. The new premises will house around 500 staff and the 24/7 control room for the National Grid.  At approximately 8,400m2, the Boulcott Street transaction is one of the largest commercial office leasing deals in New Zealand this year.

The Greenwood Roche team included partner John Greenwood and principal Doran Wyatt, both based in the firm’s Wellington office.


Specialist expertise

Key lawyers involved

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New National Head Office for Ministry of Education

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New National Head Office for Ministry of Education

New National Head Office for Ministry of Education

Greenwood Roche represented the Ministry of Education on the redevelopment and 15 year lease of the Ministry’s new national head office at 33 Bowen Street, Wellington.


At approximately 13,100m2, the Bowen Street transaction was a full building lease and one of the largest commercial office leasing deals in New Zealand for the year. Greenwood Roche assisted the Ministry on all aspects of the negotiation and documents for the transaction, which included substantial refurbishment works, a seismic upgrade for the building and an integrated fitout.

The Greenwood Roche team for the deal were partner Jeannie Warnock and principal Doran Wyatt, both based in Wellington.
 


Specialist expertise

Key lawyers involved

Similar projects
Ministry of Business, Innovation and Employment – New National Office Redevelopment New National Head Office for Transpower Redevelopment of 56 The Terrace, Wellington

Recent Projects


Redevelopment of 56 The Terrace, Wellington

Kiwi Income Property Trust, one of the country’s largest listed property investors, is undertaking a $67 million redevelopment of its property at 56 The Terrace, Wellington, for lease by the Ministry of Social Development.


We are advising Kiwi Income Property Trust on this project. Our work has included advising on the development agreement and the 18 year deed of lease with the Crown and preparing and advising on the construction contract for the development works.


Specialist expertise

Key lawyers involved

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New Co-located Processing facility in Palmerston North

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New Co-located Processing facility in Palmerston North

New Zealand Post has recently commenced operations at its new Manawatu Co-located Processing Facility.


Comprising over 7,000 square metres including a mail processing warehouse, staging interchange areas, and associated office accommodation (and a combined investment of over $10 million), the facility houses NZ Post’s mail processing functions for the entire lower North Island.

The facility is situated in the heart of Palmerston North’s main industrial area, and is strategically convenient to all major transport systems in the city (including the airport, state highways and rail network).

Greenwood Roche assisted NZ Post on the development, construction and leasing aspects of the facility. The development agreement provided for delivery of tenant works as a variation to the landlord's main contract and early engagement of the Main Contractor on a fixed margin open book basis. Both features enabled the project to be completed seamlessly to a tight schedule while maintaining the appropriate distribution of risk and responsibility between the parties.
 


Specialist expertise

Key lawyers involved

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Watercare’s new head office

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Watercare’s new head office

Watercare’s new head office

Watercare Services Limited is responsible for providing water and wastewater services to the greater Auckland region, and employs a large number of people across many different teams.


We acted for Watercare in relation to its new head office premises located in Newmarket, Auckland. This was a significant project, involving the negotiation of a comprehensive redevelopment agreement and subsequent deed of lease, and further extensive advice in relation to Watercare’s ability to terminate its existing tenancies at that time.


Specialist expertise

Key lawyers involved

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Redevelopment of 56 The Terrace, Wellington Sale, redevelopment and leaseback of New Zealand Post House

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Sale, redevelopment and leaseback of New Zealand Post House

As part of New Zealand Post’s strategy to release capital from its corporate properties, it sold the landmark New Zealand Post House in Wellington to listed commercial property company Argosy Property in 2013.


We acted for New Zealand Post on the sale and leaseback of New Zealand Post House and on the negotiation of a comprehensive development agreement committing the purchaser to undertake a $40 million extensive redevelopment of the building.
 
The sale, for $60 million, was one of the single largest commercial real estate deals completed in Wellington in 2013.


Specialist expertise

Key lawyers involved

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Watercare’s new head office New Hamilton office for Accident Compensation Corporation

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New Hamilton office for Accident Compensation Corporation

New Hamilton office for Accident Compensation Corporation

Tainui Group Holdings and the Accident Compensation Corporation have announced the development of a $50m-plus Hamilton office complex.


Greenwood Roche lawyers Bob Roche, Sam Green and Jane McDiarmid are assisting ACC with a significant office consolidation project, which has recently reached a milestone with the conclusion of a development agreement for a new office building in Hamilton.

At each of ACC's main hubs, Dunedin and Hamilton, we are advising ACC on the RFP process for new office accommodation, development agreements for the design and build of new office buildings and the deeds of lease. Each building will have office space of approximately 8,500 square metres and will be significant construction projects for these cities.

The new Hamilton building will be developed by Waikato-Tainui and will be located on the corner of Collingwood Street and Tristram Street. The building is designed as a state of the art, low-rise, three-pavilion building and will be a substantial boost for the Hamilton CBD.


Specialist expertise

Key lawyers involved

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Ocean Outfall Pipeline, Hokitika

Recent Projects

Ocean Outfall Pipeline, Hokitika

Ocean Outfall Pipeline, Hokitika

Greenwood Roche has assisted Westland Dairy Company Limited with its $26 million Ocean Outfall Pipeline project.


Our work involved drafting and negotiating land occupation and easement documentation with the Westland District Council for the deaeration chamber and the pipeline and drafting construction contracts for the two stage pipeline project.  The pipeline and deaeration chamber due for completion in the first quarter of 2021 will convey treated wastewater from Westland Milk’s Hokitika dairy factory, remove the air and discharge it into the ocean via an 800 metre underwater pipe.  The company considers it is a more acceptable environmental solution and more sustainable system than the current system of discharge into the Hokitika River.


Specialist expertise

Key lawyers involved

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Overseas investment office consents for forestry

Recent Projects


Overseas investment office consents for forestry

Greenwood Roche has assisted Corisol New Zealand Limited with acquisitions and overseas investment applications for forestry.


Our work involved negotiating and documenting agreements for sale and purchase for various land blocks, due diligence, overseas investment office applications and various ancillary documentation.


Specialist expertise

Key lawyers involved

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Christchurch hospital car parking

Recent Projects


Christchurch hospital car parking

Greenwood Roche assisted Ōtākaro Limited to negotiate a long awaited car park building solution for Christchurch Hospital.


Our work involved negotiating and documenting an agreement with a number of other parties including CDHB, LINZ and Ngāi Tahu.


Specialist expertise

Key lawyers involved

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Joint venture developing pet food factory

Recent Projects


Joint venture developing pet food factory

Greenwood Roche is acting for Hāpai Ahuriri Limited Partnership on the acquisition of land and the development and lease of a pet food factory in Hawke’s Bay. 


Our work involved documenting and registering the limited partnership (a joint venture between two other limited partnerships including our existing client Hāpai Commercial Property Limited Partnership made up of a number of different iwi), due diligence, drafting the agreement for sale and purchase, settling the acquisition and negotiating and drafting the construction contract.  We continue to advise on financing aspects and the lease.


Specialist expertise

Key lawyers involved

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Film Studios – Section 71 Proposal

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Film Studios – Section 71 Proposal

On 16 September 2020 the Associate Minister for Greater Christchurch Regeneration approved Regenerate Christchurch’s proposal to amend the Christchurch District Plan and the Canterbury Regional Policy Statement to provide for the development and operation of commercial film and video production facilities in Christchurch.


The Minister approved the proposal developed by Regenerate Christchurch, with assistance from Greenwood Roche, and exercised powers under section 71 of the Christchurch Regeneration Act 2016 for the final time before the section was repealed.

The amendments will come into force on 13 October 2020, and result in a planning framework enabling commercial film or video production activities to locate in specific areas in Christchurch.
Demand from local and international film companies for production facilities in New Zealand is high, but there are no major production facilities in the South Island. The establishment of such facilities in Christchurch, made easier through the amendments, presents an exciting prospect for the city’s creative identity and industry and for the economic and employment opportunities that these facilities would provide.

This proposal is also significant as the last regeneration initiative performed by Regenerate Christchurch. It has been a privilege for Greenwood Roche to provide legal support to this now-disestablished organisation since 2016, and this outcome is a fitting end considering the hard work and dedication of the Regenerate team over the last four years.

The Minister’s decision can be viewed at the following link:

https://dpmc.govt.nz/publications/public-notice-film-studios-proposal-approved;
 


Specialist expertise

Key lawyers involved

Similar projects
Hagley Oval - Section 71 Proposal

Recent Projects

Hagley Oval - Section 71 Proposal

Hagley Oval - Section 71 Proposal

On 23rd December 2018 Hon Poto Williams, the Associate Minister for Greater Christchurch Regeneration approved a proposal to amend the Christchurch District Plan provisions for Hagley Oval to enable it to host large international fixtures and meet modern day broadcasting requirements.


Greenwood Roche assisted Regenerate Christchurch in developing the proposal on behalf of the Canterbury Cricket Trust.

The proposal approved by the Minister amends the Christchurch District Plan through section 71 of the Greater Christchurch Regeneration Act 2016 (GCR Act). The approved proposal incorporates the current resource consent conditions into the Plan and amends certain aspects of those conditions, including:

  • Amending the current condition to increase the four, retractable light towers to allow six permanent light towers to meet international broadcast standards.
  • Allow more lenient pack in and out timeframes for temporary facilities associated with hosting cricket matches to improve health and safety and limit damage to the Oval grounds.
  • Increasing the number of fixtures allowed per season, including an allowance for hosting International Cricket Council events on years that they occur.

These changes will mean that Hagley Oval will be able to host day-night matches that are now required by top-tier teams, allowing Hagley Oval to be more competitive when bidding for games compared to its rival cricket grounds.  With the Women’s Cricket World Cup approaching in 2021, the changes will allow Christchurch City to bid for and host games in this tournament.

Through the public participation stage of the process, 1,253 written comments were received, of which 83 percent were in favour of the proposal.

The Minister’s decision can be viewed at the following link: https://dpmc.govt.nz/sites/default/files/2019-12/Hagley Oval - Section 71 Proposal - Signed Decision Paper_1.pdf


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Recent news & insights
Greenwood Roche becomes a Keystone Trust sponsor

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Greenwood Roche becomes a Keystone Trust sponsor

Greenwood Roche has recently had the privilege of joining the Keystone Trust whanau as a proud sponsor.


Keystone Trust’s fundamental goal is to support and enable students who have financial need or have been affected by adverse circumstances to take up tertiary studies in the property sector.

The Trust believe that this can only be achieved by working with others with the same value, vision and integrity – from students to sponsors, friends and supporters. 

Being able to contribute to the future capability and capacity of the property and construction sector through the Trust gives us the opportunity to ‘pay it forward’. Standing alongside a young person as they grow and develop into their potential is an enormously fulfilling experience and one we look forward to doing with Keystone.


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Infrastructure Funding and Financing Act 2020: A New Approach to Infrastructure Funding

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Infrastructure Funding and Financing Act 2020: A New Approach to Infrastructure Funding

The Government has recently developed a number of initiatives, including the Urban Development Act 2020 (UDA), the National Policy Statement on Urban Development (NPS-UD) and the COVID-19 Recovery (Fast-track Consenting) Act 2020, designed to support the functioning of urban environments and eliminate barriers to their creation throughout  New Zealand.


As part of this package of initiatives, the Infrastructure Funding and Financing Act 2020 (“Act”) passed its final reading on 22 July 2020 and received royal assent on 6 August 2020. The Act looks to ensure that a lack of funding at local government level does not continue to constrain development. Using the Act, developers can now access a new funding structure that will allow them to raise the funds and finance necessary for large-scale projects themselves (rather than rely on local government), with repayments made by future owners through rates on the developed land.

As noted by Auckland Mayor Phil Goff, “Traditional approaches to infrastructure funding and financing are not working. Constraints on council debt levels means viable infrastructure projects are postponed for years, despite the pressing need for more housing in these high-growth areas.”

The new funding model provides an alternative funding mechanism in a bid to accelerate the development of housing in particular. The Act received cross party support and is designed to complement existing funding tools available to local government.

Milldale Model

The financing structure set out in the Act is modelled on the structure utilised in the Milldale development in North Auckland. For Milldale, a special purpose vehicle (SPV) was set up to oversee a residential development project. The SPV raised initial capital from investors, proposing to pay them back by an annual ‘infrastructure payment’ added to the rates bill. Payments will initially be made by the developer and, in time, by the section owners.

The infrastructure payment obligations are secured by an encumbrance on each title, meaning the obligation to meet the payment runs with the land and binds any subsequent owners. In the Milldale example the payments are $650 + 2.5% interest per annum for apartments and $1000 + 2.5% interest per annum for homes and will last for 30 years.

While the Milldale development is still in the construction phase it is already clear that the model has enabled acceleration of the project and therefore faster delivery of affordable housing in Auckland.

How will The Act Work?

The Act adopts a very similar model to the Milldale model, by allowing the use of multi-year levies in large scale development that place the cost of infrastructure on those who will benefit directly from it. Levies will be able to be proposed for the provision or improvement of the following:
 

  • new water services infrastructure;
  • transport infrastructure;
  • community infrastructure or community facilities; or
  • environmental resilience infrastructure.
The process for creating an SPV and initiating levies will broadly involve the following:
 
  • The making of a detailed levy proposal to the government;
  • The proposal must include, among other matters, details of the SPV proposed, the financing structure and who will be responsible for construction;
  • The Minister for Housing and Urban Development as “recommender” will consider the levy proposal with reference to a number of factors and in consultation with the relevant local authorities and make a report to the responsible Minister (a Minister to be confirmed by the Prime Minister);
  • The report will include an assessment of the proposal, a recommendation and endorsement from the relevant levy authority;
  • The Responsible Minister may then recommend the Governor-General accept the levy (but may not amend the terms of the proposal).
Once a levy order has been made, the SPV will borrow funds to finance the infrastructure and set an annual levy that will be collected by the relevant local authorities on behalf of the SPV to pay back the borrowing. Vesting agreements will ensure that the conditions of any transfer of ownership of the infrastructure are clear. An encumbrance will secure payment of the levy by all future owners of the properties to benefit.

Commentary

Support for the Act has been reasonably wide as it is generally agreed that addressing infrastructure funding issues will enable faster provision of housing in areas where demand has been eclipsing provision. All major parties supported the Act, which then Infrastructure New Zealand CEO Paul Blair commented would “enable a bolder, more streamlined way of delivering new infrastructure for the benefit all New Zealanders”.

The Act will work with the direction in the NPS-UD that local authorities must have particular regard to plan changes for “out of sequence” (ie not zoned) development in some circumstances. In most cases “out of sequence” development will not be serviced by infrastructure, nor will the funding for requisite infrastructure be part of the local authority’s short to medium term plans. The combination of the NPS-UD and the Act will provide an avenue for development to take place in response to the ever-rising demand for housing outside of that already anticipated.

As summarised by the Minister for Urban Development:

“We need to remove restrictive planning rules that stop our city expanding on the fringes, which creates an artificial scarcity of land and drives house prices up, and remove height and density rules that stop the city growing up, which, effectively, rations floor space. Local authorities need to plan ahead and make room for growth.………

This bill is part of our Government's policy response to that public policy failure. It's one step towards fixing a broken funding and financing system to support more and better urban development. It’s complemented by the National Policy Statement on Urban Development gazetted this week, joint spatial planning work with local government in our six high-growth metro cities, and the Hon David Parker's review of the Resource Management Act.”
 
For any questions on the Act please don’t hesitate to contact Lauren Semple or Francelle Lupis for further information on the Urban Development Act, the NPSUD and the COVID-19 (Fast-Track Consenting) Act 2020, see here.


September 2020


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The National Policy Statement for Freshwater Management 2020

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The National Policy Statement for Freshwater Management 2020

The National Policy Statement for Freshwater Management 2020 (NPS-FM) has recently been gazetted and will come into force on 3 September 2020. The NPS-FM will replace the current National Policy Statement for Freshwater Management 2014 (amended 2017) and will make fundamental changes to the way freshwater is managed in Aotearoa.


A prominent shift in the new NPS-FM is the incorporation of Te Mana o te Wai as the primary approach to managing freshwater. Te Mana o te Wai is defined in the NPS-FM as “a concept that refers to the fundamental importance of water and recognises that protecting the health of freshwater protects the health and well-being of the wider environment.  It protects the mauri of the wai.  Te Mana o te Wai is about restoring and preserving the balance between the water, the wider environment and the community”.  The NPS-FM identifies a hierarchy of obligations within Te Mana o te Wai that prioritises:
 

  • First, the health and wellbeing of water bodies and freshwater eco-systems.
  • Second, the health needs of people (such as drinking water).
  • Third, the ability of people and communities to provide for their social, economic and cultural wellbeing, now and in the future.
 The core principles of Te Mana o te Wai informing the NPS-FM and its implementation are:
 
  1. Mana whakahaere: the power, authority and obligation of tangata whenua to make decisions that maintain, protect and sustain the health and well-being of, and their relationship with, freshwater.
  2. Kaitiakitanga: the obligation of tangata whenua to preserve, restore and enhance, and sustainably use freshwater for the benefit of present and future generations.
  3. Manaakitanga: the process by which tangata whenua show respect, generosity, and care for freshwater and for others.
  4. Governance: the responsibility of those with authority for making decisions about freshwater to do so in a way that prioritises the health and well-being of freshwater now and into the future.
  5. Stewardship: the obligation of all New Zealanders to manage freshwater in a way that ensures it sustains present and future generations.
  6. Care and respect: the responsibility of all New Zealanders to care for freshwater in providing for the health of the nation.
The NPS-FM directs that freshwater is to be managed in a way that gives effect to the concept of Te Mana o te Wai – as articulated through the hierarchy and the principles.  The NPS-FM is also clear that regional councils must engage with communities and tangata whenua to determine how this concept applies to water bodies and freshwater ecosystems in the region, including through the development of the core “deliverables” under the NPS-FM including:
 
  • The development of long-term visions. Every council must include the long-term visions as objectives in regional policy statements. The long-term visions must be developed through engagement with the community and mana whenua about their long term wishes for the water bodies and freshwater ecosystems in the region.
  • Implementation of the national objectives framework. The national objectives framework is a process that requires regional councils to undertake a range of steps such as identifying freshwater management units and values, setting environmental outcomes and including them as objectives in regional plans, identifying and setting baseline states for attributes for each value, setting targets to support the achievement of environmental outcomes and prepare action plans to achieve those outcomes.
  • Developing objectives, policies, methods and criteria for any purpose relating to natural inland wetlands, rivers, fish passage, primary contact sites, and water allocation.
Alongside these requirements, the NPS-FM also prescribes a number of policies that must be included by all Regional Policy Statements and requires district and regional plans to align objectives with the environmental outcomes sought. Every local authority must give effect to the NPS-FM as soon as reasonably practicable.
 
This new NPS-FM is one of several streams of work in the freshwater space. The National Environmental Standards for Freshwater Management have also been introduced and will come into effect on the same day as the NPS-FM.  The standards will set requirements for carrying out activities that pose risks to the health of freshwater and freshwater ecosystems.
 
A full copy of the NPS-FM may be found on the Ministry for the Environment’s website here:
 


September 2020


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Major changes to residential tenancy legislation

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Major changes to residential tenancy legislation

Major changes to residential tenancy legislation

The Residential Tenancies Amendment Bill 2020 was passed by Parliament on 5 August 2020, and is awaiting Royal Assent. The Bill makes a number of changes to the Residential Tenancies Act 1986, which will affect all residential landlords and tenants.


Media have rightly focused on the reduced frequency of rental increases and changes to the termination of periodic tenancies, with these provisions being substantially amended for the first time in over 30 years.

Most residential property landlords will only be able to terminate a periodic tenancy:
 

  • by giving 63 days notice if the owner of the premises, or a member of the owner’s family (which includes extended family and whānau), requires the premises as their principal place of residence within 90 days after the termination date; or
  • by giving 90 days notice, but only for certain specified reasons. The list of reasons for terminating a tenancy is narrow, and the “no cause” ground has been removed.

Tenants will need to give at least 28 days’ notice to terminate a periodic tenancy – up from 21 days.

A late change was made to allow tenants to withdraw from a fixed-term or periodic tenancy on 2 days’ notice in circumstances of family violence. Any remaining tenants are then able to apply to the Tenancy Tribunal to be released from the tenancy on hardship grounds. A landlord who is physically assaulted by a tenant can terminate the tenancy by giving 14 days’ notice, but only if a charge is laid against the tenant for that assault.

Rent may not be increased within 12 months after the start date of the tenancy or 12 months after the last increase took effect. This applies even if the tenancy agreement (including for a fixed term tenancy) provides otherwise. As with the current Act, rent cannot exceed the market rent and cannot be charged more than 2 weeks in advance.

In addition:
 

  • landlords must allow tenants to undertake minor changes to the property (such as hanging pictures and redecorating), subject to certain conditions and provided that the changes do not require a building consent;
  • landlords must facilitate the installation of fibre connections to a property, although not if the installation will materially compromise the weathertightness, character or structural integrity of a building;
  • landlords must include the rent when advertising properties, and cannot hold auctions or solicit bids;
  • fixed-term tenancy agreements will automatically become periodic tenancies on expiry, unless both parties agree otherwise or in limited other situations;
  • to evict a tenant for anti-social behaviour (being harassment and activities causing non-minor alarm, distress or nuisance), the landlord will need to warn the tenant (in writing) at least 3 times in a 90 day period of that behaviour before seeking a Tenancy Tribunal order;
  • all tenancies (except social housing tenancies where the tenancy agreement prohibits assignment) are assignable with the prior written consent of the landlord, and that consent cannot be unreasonably withheld; and
  • financial penalties are increased, generally by 50% or more, but with significant additional penalties potentially imposed where a landlord has 6 or more tenancies.

The amendments also strengthen the Residential Tenancies (Healthy Homes Standards) Regulations 2019 (which set “healthy homes standards” for heating, insulation, ventilation, draughtiness, moisture ingress and drainage) by requiring that landlords retain information about compliance with the healthy home standards and provide that information to tenants on request.

The changes largely result from a public consultation process undertaken by the Ministry of Business, Innovation and Employment in 2018, and driven by the Government’s desire to make life better for tenants in light of home ownership being at a 60 year low and the number of rented properties exceeding 600,000. The changes therefore increase the rights of tenants, and reflect that tenants will often occupy rental accommodation for many years.

We advise a range of social housing and residential property investors on the acquisition, management and disposal of properties. If you would like further advice on the changes to the Residential Tenancies Act 1986, please contact our real estate and property team.

August 2020


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Urban Development Act 2020

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Urban Development Act 2020

The Urban Development Bill 2020 passed into legislation on 6 August 2020, becoming the Urban Development Act 2020 (Act).


The purpose of the Act (and the end to which its powers are to be deployed) is to facilitate urban development that contributes to sustainable, inclusive and thriving communities. The primary "beneficiary" of the Act is Kāinga Ora—Homes and Communities (Kāinga Ora), the Crown entity established in 2019 with the objective of contributing to sustainable, inclusive and thriving communities through, amongst other things, initiating, facilitating or undertaking urban development. 

Powers given to Kāinga Ora

The Act provides Kāinga Ora with a "tool-kit" of statutory powers, a number of which are, in effect, modified versions of existing development powers currently available to local government. Included in this "tool-kit" are powers relating to the planning and consenting of urban development projects, land acquisition, infrastructure development powers, and funding mechanisms.

Most powers apply only to "specified development projects", but some powers also apply to any urban development project initiated, facilitated or undertaken by Kāinga Ora. For example, Kāinga Ora is empowered to acquire land for any urban development project.

"Specified development projects"

The establishment of a "specified development project" allows Kāinga Ora to access the full suite of statutory powers to facilitate complex development projects. 

The process for establishing a specified development project under the Act can be initiated by either Kāinga Ora or the Ministers of Urban Development and Finance (acting jointly). In either case, Kāinga Ora must engage with; Māori entities with an interest in the project area, hapū associated with any former Māori land in the project area, and with key stakeholders including local authorities, Heritage New Zealand Pouhere Taonga and the operators of affected infrastructure. Kāinga Ora must also invite public feedback on the key features of the project. 

The Ministers may accept the recommendation that the project be established as a specified development project where it meets identified criteria, including whether the project objectives are consistent with the purpose of the Act and the national directions under the Resource Management Act 1991.

Kāinga Ora must then prepare and seek public submissions on a draft development plan for the project. The submissions on the draft development plan are reviewed by an independent hearings panel, which then recommends to the Minister for Urban Development whether to approve or amend the draft development plan.

Powers relating to "specified development projects"

Once the development plan takes effect:

  • Kāinga Ora becomes the ''consent authority'' for resource consent applications in the project area;
  • only designations that have been identified in the development plan have effect in the project area. Kāinga Ora then becomes the territorial authority for the purpose of considering notices of requirement lodged by other requiring authorities;
  • certain statutory powers relating to reserves, conservation interests, infrastructure and funding mechanisms may be exercised to further the project;
  • existing planning instruments under the Resource Management Act 1981 may be amended, overridden or suspended by the development plan. 

Comment

The Act is a key feature in the suite of Government-led initiatives designed to support the creation and delivery of well-functioning urban environments. While the tools available to Kāinga Ora under this Act are powerful, the process for accessing them provides ample opportunity for Ministerial decision-making and therefore judicial oversight. These consultative and decision-making requirements are likely to (appropriately or otherwise) limit the number of projects that will be suitable candidates for progression under the Act. However, for projects facing significant barriers, the Act can offer a comprehensive pathway to facilitate their development where they will contribute to sustainable, inclusive and thriving communities. Navigating the different stages of decision-making under the Act will require considerable skill and strategic nous.

For any questions on the Act and/or the COVID-19 Recovery (Fast-track Consenting) Act 2020, and how these alternative processes might be used or impact developments, please don’t hesitate to contact Lauren Semple, Francelle Lupis or Jeannie Warnock.

August 2020


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Honey Bees Preschool: The Law against Penalties Confirmed

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Honey Bees Preschool: The Law against Penalties Confirmed

Honey Bees Preschool: The Law against Penalties Confirmed

On 5 June 2020, the Supreme Court issued its decision on an appeal by 127 Hobson Street Limited (127 Hobson) against the Court of Appeal’s finding that a requirement to indemnify lessee Honeybees Preschool Limited (Honey Bees), for all financial obligations incurred under a lease as a result of 127 Hobson’s failure as lessor to install an elevator, was not an unenforceable penalty.


The issues on appeal involved an examination of the scope of the current rule against penalties in New Zealand and whether the clause in question constituted an unenforceable penalty.

Upholding the Court of Appeal finding, the Supreme Court has usefully re-stated the law on penalties in New Zealand.

Background

Honey Bees runs a childcare centre in central city premises leased from 127 Hobson. When the Deed of Lease was entered into, the parties also entered into a separate agreement under which 127 Hobson and its director agreed to install a second lift in the building to facilitate the arrival and departure of children at the central city high rise preschool.

This agreement included a provision whereby both 127 Hobson and its director agreed that in the event this second lift was not operational by 31 July 2016, Honey Bees would be indemnified against all rent and outgoings it incurred under the lease until its expiry.

The Supreme Court looked at the circumstances around entry into the overall transaction, examining why the separate second lift agreement was central to the lease’s suitability.

What is the scope of the rule against penalties in New Zealand? 

The Supreme Court summarised the rule against penalties as follows:

  • A clause will be an unenforceable penalty if a consequence is out of all proportion (exorbitant) to the legitimate interests of the innocent party in performance of the primary obligations.
  • Determining if the clause is an unenforceable penalty requires an objective exercise of construction, undertaken at the time of contract formation, and by reference to the terms and circumstances of the contract (including commercial context).
  • A legitimate interest to be weighed includes any consequences designed to protect the interests of the party in performance of the primary contractual term.
  • A party’s legitimate interests may extend beyond the loss caused by the breach as would be measured by a conventional assessment of contractual damages, i.e. the four corners of the contract.
  • Legitimate interests will not include objectives unrelated to the performance interest – including punishment – but deterring a breach can be a legitimate objective of the clause.
  • The respective bargaining power of the parties is relevant, including whether legal advice was obtained.
  • It is not always necessary for the court to assess damages – but there will be cases where such a monetary calculation will be the appropriate measure of the innocent party’s interest in performance.

Was the indemnity clause an unenforceable penalty? 

To answer this, the Court looked at Honey Bees’ legitimate interests and found that the only relevant interests were those that flowed from a failure to install a second lift on or before the due date. As the preschool was operating on the fifth floor of a busy high rise building, children and parents would be arriving and leaving within concentrated blocks of time. Honey Bees was looking to increase the capacity of its preschool over the forthcoming years. This was important to the commercial success of the venture.

The Court also found that there was no discrepancy in the parties’ respective bargaining powers.

The Court agreed with the Court of Appeal’s finding that, despite the ‘all or nothing’ nature of the indemnity clause, the consequences of the indemnity being triggered were not out of all proportion to the legitimate interests secured, and therefore the clause was not an unenforceable penalty.

Other issues

This Court also read the wording “all obligations” as applying to only “payment obligations”, i.e. Honey Bees was indemnified against all its financial obligations under the lease but the agreement did not give Honey Bees a right to breach its own obligations under the lease.

It is worth noting that the Court confirmed the general understanding in property law that rights of renewal of leases are in fact grants of a new lease, not an extension of the existing lease. Therefore the indemnity provided under the indemnity agreement only applied to the initial term of the lease, rather than a 24 year period including all renewals.
 
10 July 2020


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