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Property Briefs

Business Ethics, First Job, House, Media, Politics & Government, Social Media, Trusts
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Healthy home standards compliance from 1 July 2025

First introduced in 2019, healthy home standards are the minimum legal standards expected of rental properties in New Zealand. These include:

  • Heating (provision of functioning and fixed (not portable), heaters in the main living room)
  • Ceiling and underfloor insulation, and
  • Adequate ventilation (functioning doors and windows, and extractor fans in the kitchen and bathrooms).

From 1 July 2025, all landlords are responsible for ensuring their rental properties comply with healthy homes standards (and continue to comply with them over time). Landlords who do not comply will be in breach of the Residential Tenancies Act 1986 and can be penalised up to $7,200 per breach. Landlords who are ignorant of these changes or disorganised will not be excused.

Landlords in new or renewed tenancy agreements must include a signed statement detailing the property’s compliance with the standards. Failing to do so can result in a penalty. There are also penalties to the landlord if they provide misleading information in compliance statements.

If you are a tenant and you are concerned that your rental property does not comply with healthy homes standards, we recommend having a friendly chat to your landlord first. Failing that, please contact us and we can help you explore your options.

On the other hand, if you are a landlord and are concerned about your obligations under the healthy homes standards, please come and see us for advice.

Sunset clauses – the new bill introduced into Parliament

The Property Law (Sunset Clauses) Amendment Bill was introduced to Parliament on 9 April 2025 and is tracking towards its first reading. The bill is aimed at restricting sellers developing vacant plots of land from using ‘sunset clauses’ to cancel sale and purchase agreements. It also provides an extra layer of protection to buyers who, in good faith, have made the commitment to purchase the property.

In this context, a ‘sunset clause’ is a provision added to an agreement for the sale and purchase of a plot of land in development which allows the seller or buyer the option to cancel the agreement if the development is not complete by the specified date.

There have previously been situations in which sellers have used these clauses to cancel an agreement, where there have been delays in development, only to then go and list the property at a higher price.

This legislation would require the seller to obtain the buyer’s written consent to cancel the agreement under a sunset clause. There would also be the requirement to give sufficient notice of, and reasons for, the proposed cancellation to the buyer in advance. This is the extra layer of protection given to the buyer.

If the buyer does not consent to the agreement being cancelled, the seller would need to apply to the High Court for an order permitting the cancellation. On the seller’s application, the court would only make the order if it is satisfied that its making would be ‘just and equitable in all the circumstances.’ The court would consider various factors including whether the seller has acted unreasonably or in bad faith, the reason for the delay in completing the development, whether the land has increased in value and the effect of the cancellation on the buyer.

If this law is passed and you are a seller or buyer who seeks to activate a sunset clause, please get in touch with us – we would be happy to assist you.

Real estate agent commission – claim or not to claim?

Before a real estate agent lists a seller’s property, the parties enter into a ‘listing agreement’ or ‘agency agreement,’ authorising the agent to sell the property on the seller’s behalf.

The real estate agent receives a commission (a percentage of the sale proceeds) for introducing the buyer to the property. The real estate agent usually takes their commission out of the deposit the buyer pays when the agreement for sale and purchase becomes unconditional.

However, there are some situations in which an agent is not entitled to be paid their commission:

  • Where there is no listing agreement in place
  • If an agreement for sale and purchase does not become unconditional and is cancelled, and
  • If the property is pulled from the market and the seller cancels the listing agreement (but note that the agent may still charge a fee).

If you are considering selling your property and have any questions about entering into a listing agreement, please come and see us for advice first.

DISCLAIMER: All the information published in Property Speaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Property Speaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

 

Polyamorous relationships

Property, Relationships
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Supreme Court confirms that the Property (Relationships) Act can apply

In a split decision, the Supreme Court recently confirmed by 3:2 that polyamorous relationships (that is, relationships between three or more people) can be subdivided into two or more qualifying relationships, to which the provisions of the Property (Relationships) Act 1976 (which applies to relationships between two people) can apply.

 

Background

Brett and Lilach Paul married in 1993. In about 1999, Brett and Lilach met Fiona. The three formed a triangular relationship in 2002.

During their 15-year relationship, all three lived on a farm at Kumeu that was registered in Fiona’s name. Lilach separated from Fiona and Brett in 2017. Fiona and Brett separated a few months later in 2018.

 

Family Court

In 2019, Lilach brought an application in the Family Court, in which she sought orders determining the parties’ respective shares in relationship property, including the Kumeu farm.

Fiona objected to the court’s jurisdiction, on the basis that the parties were not in a qualifying relationship for the purposes of the Property (Relationships) Act 1976 (PRA).

The Family Court sought guidance from the High Court about its jurisdiction to hear the case.

 

High Court

In the High Court, Justice Hinton held that the Family Court did not have the jurisdiction to determine the property rights of three people in a polyamorous relationship, because the requirement, under section 2D of the PRA that the parties be living together as a couple, excluded a scenario where all three people are participating in a multi-partner relationship.  Lilach appealed and the case went to the Court of Appeal.

 

Court of Appeal

The Court of Appeal disagreed with the High Court’s framing of the question put to it and found that jurisdiction could exist in the case of a polyamorous relationship.

The court agreed that the PRA was concerned with relationships between two people, meaning that polyamorous or multi-partner relationships are not qualifying relationships under the PRA. The court noted, however, that sections 52A and 52B of the PRA specifically provide for claims where a person is in multiple contemporaneous qualifying relationships. It found that the PRA does not require exclusive coupledom.

Within that context, the court held that the relationship between the parties could be viewed as three separate, but contemporaneous, qualifying relationships – a marriage between Brett and Lilach, a de facto relationship between Brett and Fiona and a de facto relationship between Lilach and Fiona.

Fiona appealed to the Supreme Court.

 

Supreme Court decision in June

In a decision released in June 2023,[1] the Supreme Court (by a 3:2 majority) dismissed the appeal and confirmed that the PRA could apply to polyamorous relationships.

Specifically, the court held that:

  1. A triangular (three-party) relationship cannot itself be a qualifying relationship, but
  2. A triangular relationship can be subdivided into two or more qualifying relationships.

In reaching this conclusion, the three Supreme Court judges who were in the majority noted that it was not contentious that the PRA applied to what it referred to as ‘vee’ relationships. A vee relationship is one where party A is married to party B, and A is also in a consecutive or concurrent de facto relationship with C, but where parties B and C may not know about each other, and may or may not live in the same residence.

The question was then whether the ‘triangularity’ of the relationship (ie: the existence of a relationship between parties B and C) makes any difference to the analysis. The majority held that it did not.

As noted, the Supreme Court decision was spilt 3:2, with the minority indicating that they would have allowed the appeal.

 

Practical implications

Following this decision, there may be increased interest by parties in polyamorous relationships in having contracting out agreements put in place. There are also likely to be claims under the PRA following the breakdown of a relationship, or on the death of a party to the relationship.

As all the decisions to this point have dealt only with the question of jurisdiction, no decisions have been made yet about the division of property between Lilach, Fiona and Brett. That issue will be sent back to the Family Court.

[1] Mead v Paul [2023] NZSC 70.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Who are the ‘children of the settlors’?

Kids, Property, Relationships, Trusts
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Make it clear in the trust deed

In the recent case of Re Merona Trustees Ltd[1], the High Court was asked to determine who the beneficiaries of a trust were as it was not clear who was intended by the phrase the ‘children of the settlors’ that was in the trust deed.

Background

The trust settlors, Merv and Rona, had two daughters together – Lilly and Miffy. Rona also had two sons from a previous marriage when she was very young – Rob and Ray. When Rona’s first marriage broke down, and in the absence of social welfare benefits, she could not afford to keep her sons, and they both went to live with different extended family members. Rob had occasional contact with Rona and, after Rona’s marriage to Merv, Rob was raised by them both. Ray, however, was raised by extended family and had no contact with Rona. It was only as an adult that Ray came to know Rona and the wider family.

Interpreting the trust deed

Rona died in 2013. Merv died in 2020. After Merv’s death, a question arose as to who were the beneficiaries of the trust they had settled.

The question for the High Court was interpreting the trust deed that referred to ‘the children of the Settlors’. Did it mean:

  • The two natural children of Merv and Rona together, being Lilly and Miffy
  • The two natural children of Merv and Rona, as well as Rona’s son Rob, who was raised as a member of Merv and Rona’s family, or
  • The two natural children of Merv and Rona, as well as both of Rona’s sons, Rob and Ray?

High Court hearing

The court heard two main competing arguments.

The trustees primarily argued that ‘the children of the settlors’ meant Rob, Lilly, and Miffy; the ‘children’ did not include Ray. They said that the context in which the trust was established was highly relevant to the interpretation of the trust deed. In particular, a predecessor trust had been established in 1986 before Ray connected with Rona as an adult. The trust in question was settled in 2002, when Rob, Lilly and Miffy were in their forties and fifties.

Even in 2002, after coming to know Ray, Merv and Rona presented to their professional advisors as a couple with three children – Rob, Lilly, and Miffy. Their accountants recorded Merv, Rona, Rob, Lilly and Miffy as the beneficiaries of the trust. The family’s lawyers also understood Rob, Lilly and Miffy to be Merv and Rona’s three adult children. Merv and Rona also signed memoranda of guidance in relation to the trust, that were effectively instructions to the trustees as to their wishes. These memoranda recorded their wish that ‘our children’ benefit from the trust; Rob, Lilly, and Miffy were named, but Ray was not.

Finally, Rona’s will left a bequest each to Rob, Lilly, and Miffy as her children, and an equal but separate bequest to Ray who was described as her ‘birth son.’ She also left him a letter which asked that he be content with this bequest. The court found that by implication, she did not see him as eligible to benefit from the family wealth which was otherwise held in the trust.

On the other side, Ray’s lawyers argued that Ray was also a beneficiary of the trust. They said that once Ray had been reunited with Rona, they developed a close relationship with each other and the wider family. Although Ray was not close with Merv, Ray was included in family gatherings including at Christmas and birthdays. Ray was treated equally with Rob, Lilly, and Miffy in Rona’s will, and he was a part of the family.

The High Court considered that Merv and Rona had brought Rob up as a child of their own, and that it was ‘inconceivable’ that they would have intended to exclude him as a beneficiary of the trust. The documents signed at the time, and subsequently, showed that Merv and Rona thought that Rob was a beneficiary of the trust. In the context of their family, ‘the children of the settlors’ plainly included him. The only question was then whether Ray was also included.

Decision

The court found that the language of the trust deed could be interpreted to include Lilly and Miffy as natural children of the settlors, as well as Rob, who was raised within the family unit as though he was a natural child of both Merv and Rona.

The wording of the trust deed, however, could not be interpreted to include Ray. While Ray enjoyed a good relationship with the family when they reconnected, he was not raised as a part of Merv and Rona’s family unit.

Care must be taken

This decision emphasises the importance of clarifying who is intended to be a beneficiary of a trust at the outset. This is particularly necessary in the context of blended families where there may be reasons to differentiate between classes or groups of children.

In this case, the lawyers and accountants were not necessarily aware that Rob was not a child of Merv and Rona. It is possible that if they had known at the outset, the trust deed would have been drafted in a way that made it clear who the beneficiaries were.

If you are concerned about the wording of your trust deed and how it may affect your children, please be in touch to review your trust deed.

[1] Re Merona Trustees Ltd [2022] NZHC 1971.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

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