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LegalAdviceNZ

To Share and Share alike

Business Law, Contracts and Agreements, Due Diligence, Legal Guidance, Shareholder Agreements
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It was just another Monday, as Simon entered his law office, looking forward to slaking his thirst with a comforting cup of tea. He shrugged off his suit jacket and hung it up. While he waited for his computer to wake itself for the day ahead, he made himself a cup of tea.

 

He was just about to have a sip, when the phone rang. He put the tea down. Reception told him that someone was here to see him, no appointment in place, but it was apparently urgent. Taking a last look at his untouched drink, he went downstairs and shook hands with Reggie, who was flustered, Sally’s cousin.

 

“I’m joining someone in an engineering business, it’s all got to be done by tomorrow for some reason, and I’ve got all this paperwork to sign. In fact, I’ve already signed it and was going to hand it over, but Lory said I better come and see you first. Well, she demanded it.”

 

Simon sat Reggie down in an office, and had a look at the papers provided. Reggie was joining two other people in a company which ran the engineering business, he was going to take over from a current owner, and this all had to happen by 31 March for tax reasons. Simon went back to his room, grabbed his favourite pen, ignored the cold cup of tea on his desk, and returned to an expectant Reggie, who said: “We’re all good to go, aren’t we, can I just pay the money and get on with it?”

 

Simon put down the documents, looked at Reggie, and took a deep breath. “Reggie, there are some really important things to think about first:

 

Due Diligence – how well do you know the people you are going into business with? Do they have experience in the industry, in this company, do they have a good reputation? Are they financially sound, can they help bail the company out of trouble if necessary, have they had money problems in the past?

 

Shareholder Agreement – it is essential that you and the other owners sign an agreement which sets out expectations of each other, whether you will need to put more money into the business, who makes decisions, and when do you all have to agree.

 

You should commit to a timeframe where no one can pull out of the business, and if they do they must offer the shares to each other.”

 

Reggie’s eyes were wide open. “Thanks for this, I’ll have a good chat with the others, I won’t sign anything, and I’ll come back and see you shortly.”

 

Simon waved him goodbye, and poured himself a cup of tea. He knew that was not the end of this story.

 

 

Simon Brdanovic

Rob & Jess Take the Next Step: From Farm Assistants to Sharemilkers

Agribusiness, Employment Law, Legal Guidance, Property & Farming, Rural
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Rob and Jess have been working as farm assistants for Bob for the past 3 years.

Bob is wanting to take a step back from the day-to-day running of the farm and has proposed that Rob and Jess take a big step up and share milk his farm.

This is a dream come true for Rob and Jess but it is also a bit overwhelming – there is so much to think about and organise.

They need to sign a sharemilking contract, buy cows and machinery and hire staff, as well as find a way to pay for everything!

It is all very new to Rob and Jess and they want to make sure that they are setting themselves up properly.

Rob and Jess meet with their lawyer who advised them on the sharemilking contract, drafted a stock purchase agreement and an employment agreement and assisted them with completing their financing with the bank.

This has made Rob and Jess feel much more relaxed and they can get on with their favourite part – farming!

 

Lucy Sim

Considering Retirement Village Living

Estate Planning, Legal Guidance, Property Law, Retirement Planning, Succession Planning
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A few years on from her decision to take out a reverse equity mortgage, and having enjoyed the benefits of releasing some of the capital tied up in her home, Karen is now feeling less confident about living on her own. Many of her old friends have moved away from her neighbourhood, and she is finding that she would like more support close at hand. She has decided to investigate moving into a retirement village.

This option offers several advantages. Karen would no longer need to worry about home maintenance, security, insurance, or rates. She would have ready access to assistance should she suffer a fall or other medical event. And if she feels like company, there would be plenty of like-minded people nearby.

However, Karen has been warned that there can be significant financial implications when selling a home and buying into a retirement village. To fully understand her position, she meets with her solicitor.

Her solicitor explains that most — though not all — retirement villages operate under Occupation Right Agreements (ORAs). Under an ORA, Karen would pay a capital sum in exchange for the right to live in her chosen unit. She would not own the land or building itself, and her right to occupy the unit would be subject to certain terms and conditions.

These conditions often include payment of a regular weekly fee for as long as the unit is occupied. There is also usually a deferred management fee (sometimes called an exit fee), which is deducted from the original capital sum when Karen leaves the village — whether that is because she chooses to move elsewhere or upon her death. In addition, there will be village rules governing what residents can and cannot do within their units and the wider village.

Karen’s solicitor takes the time to carefully explain the legal and financial implications, including how the move may affect the estate she intends to leave to her family. Once Karen fully understands her options, she is in a position to decide whether a move to a retirement village is the right step for her.

 

Mandy Rasmussen

Disputes arising out of a first job

Dispute Resolution, Employment, Employment Law, Legal Guidance, Personal Grievances, Workplace Rights, Youth Law & Guidance
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Sally met up with her sister Samantha and her niece Sarah for coffee at a local café. Sally was excited to see Sarah, as she had recently landed herself her first weekend job working as a waitress in another café in town. Sarah, normally bright and chatty, barely looked up when Sally arrived.

Sally gently asked Sarah how things are going and whether she is enjoying her new job. Sarah quietly answered that she no longer worked at the café. She explained that even though she really enjoyed working at the café, her boss didn’t give her a written employment agreement recording the terms of employment that they agreed on, he never paid her, and he didn’t give her copies of her timesheets when she asked for them. Sarah was too embarrassed to keep asking her boss to give her the documents and to pay her, because he made her feel like she was annoying him and wasting his time. She started feeling really uncomfortable at her job and eventually just stopped going in and she hadn’t heard from her boss since.

Clearly annoyed by Sarah’s work situation, Samantha said that she was going to post about the café and their poor treatment on the local grapevine page.

Sally recalled an article written by Edmonds Judd dealing with defamation and recommended that Samanatha and Sarah rather set up a meeting with her lawyer at Edmonds Judd to get advice on how to resolve the issue.

The team at Edmonds Judd confirmed that Sarah is entitled to all of the basic rights that protect employees, regardless of her age and that this was her first job. Sarah’s boss breached the terms of her employment agreement.

Sarah’s boss was required to:

  • provide her with a written employment agreement;
  • pay her according to the agreement which should provide her hourly wage, frequency of pay and method of pay;
  • keep records in a written form showing for example: time records (including days and hours worked), wage records (including wages paid and how the wages were calculated), and holiday and leave records;
  • record Sarah’s age in his usual wage and time records; and
  • provide Sarah with copies of her employment records if requested.

The team at Edmonds Judd explained to Sarah that given her age and limited time working for her employer, she is entitled to the starting-out minimum wage, but that the parties should have recorded her hourly rate and terms of payment in her employment agreement.

Even though a couple of weeks had passed since she left her employment, she had the right to approach her boss about her dispute. Employees must raise their personal grievance with their employer within 90 days of the issue arising or coming to their attention. If she can’t resolve her dispute with him directly, she is entitled to apply to the Employment Relations Authority for assistance to resolve the dispute.

Her lawyer explained that the first step is to give her boss a written letter setting out what her personal grievance is and how she suggests that the parties resolve it. If communicating with her boss directly does not resolve the matter, then she can apply to the Employment Relations Authority.

Kristin O’Toole

Karen’s Next Chapter: Understanding Reverse Equity Mortgages

Estate, Financial Literacy, Home Ownership, House, Retirement Planning, Senior Living, Uncategorized
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Once upon a time in a quiet New Zealand neighbourhood lived Karen—a warm-hearted retiree whose home was her greatest treasure. Every corner of it held memories: family dinners, garden mornings, and decades of life’s twists and turns.

 

But as time went on, Karen found herself wishing for a little extra breathing room…

🌼 A long-overdue renovation

🚗 A reliable new car

🩺 Extra funds for health and comfort

✈️ Or perhaps that long-dreamed-of holiday to somewhere sunny

 

One afternoon, over a cup of tea, Karen heard a gentle whisper of possibility:

“What about a reverse equity mortgage?”

 

Banks—especially Heartland Bank—offered something that caught Karen’s attention: a way for homeowners aged 60+ to unlock some of the value in their home without selling it and without monthly repayments.

 

It felt almost magical. A way to stay in her beloved home while gaining the financial support she needed.

 

But Karen was clever. She knew every good story has fine print.

✨ The interest would quietly grow over time,

✨ The loan would wait patiently until she moved, sold, or passed on,

✨ And then it would be repaid from the value of her home.

 

It could be a helpful choice—but it also meant leaving less equity behind for her family.

 

So Karen did what wise people do:

🗝 She talked openly with her loved ones

📜 She met with a solicitor to understand every detail

❤️ She made her decision with clarity and confidence

 

And in the end, Karen discovered that with careful thought and the right guidance, a reverse equity mortgage could be the solution she needed for her next chapter.

Georgia Ellen 

Property briefs

Buying & Selling Property, Due Diligence, Legal Updates, Property & Conveyancing
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Proposed reform to the Overseas Investment Act – the ability for overseas buyers to purchase or build property in New Zealand

The government recently announced a reform to the Overseas Investment Act 2005 that would allow overseas residents with a New Zealand investor residence visa to buy or build a property to the value of $5 million-plus. Applicants must satisfy the national interest test and pass the risk assessment required by the proposed legislation. After passing its first reading in June, the reform bill is currently before the select committee to receive submissions.

Currently, overseas residents and investors are largely restricted from purchasing or building property in New Zealand.

 

Granny flat legislation just passed

The Building and Construction (Small Stand-alone Dwellings) Amendment Bill was passed into law on 23 October 2025. This law change will allow small stand-alone dwellings or ‘granny flats’ of up to 70m2 to be built without a council building consent provided that certain conditions are met. These changes will roll out in the first quarter of 2026 (1 January to 31 March).

The conditions are:

  • The building must be of a simple design and comply with the Building Code
  • The work must be undertaken or supervised by a licensed building professional, and
  • The local council must be notified before the build begins and at its completion.

It will be interesting to see how this law change plays out and whether any issues arise in the future. There are also penalties for those who do not satisfy the above conditions required by the legislation.

Please do not hesitate to talk with us for advice if you are interested in building a granny flat and you want to ensure you are complying with the new requirements.

 

No further restrictions on sunset clauses in sale and purchase agreements

In our last edition (Winter 2025), we discussed the Property Law (Sunset Clauses) Amendment Bill which was introduced into Parliament in April 2025. The bill was aimed at restricting sellers developing vacant plots of land from using ‘sunset clauses’ to cancel sale and purchase agreements and to add an extra layer of protection for buyers.

To recap, a ‘sunset clause’ is a provision in an agreement enabling the seller or buyer to cancel the agreement if the development is not completed by the specified or intended date. The bill was debated at its first reading in Parliament before being voted down by a majority of 68 to 54.

The majority argued that the passage of the bill would ultimately deter developers from entering into these sale and purchase agreements, and therefore reduce the availability of off-the-plan housing when there is already a shortage of housing in New Zealand.

It was also pointed out that there are already some existing protections afforded to buyers in legislation, specifically in section 225(2b) of the Resource Management Act 1991. This clause enables buyers to give notice to the seller to cancel an agreement if, two years after the granting of a resource consent or one year after the date of the agreement, the seller has not made reasonable progress in obtaining or depositing a survey plan.

 

Changes to the assessment of earthquake-prone buildings

The government recently announced its intention to introduce the Building (Earthquake-prone Building System Reform) Amendment Bill into Parliament soon. The proposed reform focuses on increasing the threshold and implementing strict criteria that must be met to condemn a building as earthquake-prone and uninhabitable.

The proposed new regime will only capture buildings that pose a genuine risk to human life in medium to high-risk zones. Consequently, the government believes that around 55% of earthquake-prone buildings (about 2,900 buildings) will be removed from the system.

We look forward to reading the draft bill once it is introduced into Parliament; it has implications for many building owners.

 

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

Vendor supplied reports/disclosures

Buying & Selling Property, Property & Conveyancing, Real Estate Law
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Can you rely on them?

The general rule of thumb when you buy a property is that the more information you can find out about the property, the better. Sometimes, the information you are interested in will be offered by the seller or their real estate agent. Can you rely as much on information obtained from these parties as you could using a third party? And how does the information provided by the seller or their agent affect your rights under the contract for sale and purchase?

 

Real estate agent disclosures

Disclosures brought to your attention by real estate agents are usually presented in a form of acknowledgement that you may be asked to sign as part of submitting an offer to buy a property. These include defects that the seller is aware of and that they have a legal obligation to tell you about.

It is important to check carefully whether any defects in respect of a property you are buying are disclosed to you before you make your offer; known defects could limit your right to claim compensation or cancel the agreement.

You should be mindful of any disclosures that are made to you and where you think further investigation is required. You should investigate the full extent of that defect or how a defect could affect your ownership or your ability to complete the agreement. Make sure you get advice on including terms and conditions specific to those defects.

A common example of a pre-contract disclosure might be of a conservatory built without the relevant consents or permits. Important things to consider are whether you can get insurance that your lender is satisfied with considering what is now a known defect. The way clauses are drafted is important to reserve your right to cancel the agreement if the defect impacts on your ability to get insurance or bank lending.

 

When your buyer informs you of defects

If you are selling a property, and your buyer cancels due to defects that they have discovered due to their own due diligence investigation and disclose these to you, you have an obligation to all subsequent prospective buyers to disclose that defect. You should consider the risk of this carefully in deciding whether to obtain a copy of the building report from your buyer if they cancel.

If the defects are minor, it may be useful to get these fixed; this is likely to assist you with any subsequent attempts to sell your property.

 

Other disclosures

Other disclosures from an agent can include advising that they are related to the seller or making you aware of some other connection (a work or business connection or interest) that they may have.

 

Vendor-supplied reports

Sometimes, to assist in the sale of their property, the seller will already have specialist reports and make these available to prospective purchasers to expedite the due diligence process.

In some cases, these may be reports that they have obtained from a prior purchaser who cancelled the agreement. You should check the date on any reports that are provided as sellers who have been marketing their properties for extended periods may be providing outdated data. Small or minor defects picked up six months ago may have worsened since the report was prepared.

You should also check the disclaimers in the reports as any reliance on the report or the right to go back to the relevant inspector is reserved for the people who commission the report. Where this is the case, you will not have any contractual right of compensation against an inspector who overlooked something that would have meant you may not have bought the property or that you incurred significant costs to fix.

If it’s important that you rely on a report, you should obtain your own report or ask that the inspector re-addresses the report to you; there may be a fee for this.

When you are looking to buy a property, satisfying yourself in all aspects of your due diligence is crucial to ensure you don’t wind up with a lemon.

To best use and account for information that you obtain before you make an offer, talk with us about ways you can incorporate these into the agreement for sale and purchase. This will help protect your interests and guard against any unknown surprises that might be lurking beneath the surface.

 

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

 

 

Rent reviews in commercial leases

Business & Employment, Insights & Tips, Landlord & Tenant, Legal Updates, Property & Commercial Leasing
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Methods of review

Two of the most important considerations for parties to a commercial lease are, ‘What is the annual rent?’ and ‘How and when can the rental amount be reviewed?’ The answers are always found in the deed of lease for the premises.

The first schedule of The Law Association Deed of Lease (the most common format for commercial leases) sets out the methodology relating to rent reviews, including the review dates and the review types. There are three main methods of rent review:

  1. Market rent review
  2. CPI (Consumer Price Index) rent adjustment, and
  3. Fixed rent adjustment.

Most leases include a combination of two of the three rent review/adjustment methods, with a common pattern being fixed with market rent reviews on renewal dates.

The Law Association’s Deed of Lease standard terms are discussed below. Care, however, should be taken to ensure the clauses have not been modified in your lease.

 

Market rent review

When conducting a market rent review, either party may give the other party written notice of what the new market rent amount will be from the rent review date.

Notice cannot be given earlier than three months before the relevant rent review date, and it can be given at any time before the next rent review date (regardless of the method of the next rent review). If it is given more than three months after the rent review date, however, the new annual rent amount will only apply from the date of service of the notice rather than the rent review date.

Typically, the rent review process is initiated by the landlord obtaining a market rent valuation to use as the basis for the new rent figure. The other party then has 20 working days to agree, or dispute, the market rent value.

If the new rent value is disputed, the matter will either be decided by an arbitrator or, more commonly, by each party appointing a registered valuer to act as an expert, with the valuers to agree on the market rent value. If the valuers cannot agree on the market rent, a third party appointed jointly by the valuers will decide.

 

CPI rent adjustments

The second method of rent review is a CPI rent adjustment; this follows a formula set out in the deed of lease. CPI rent adjustments can only increase the rent payable, if the CPI rent adjustment results in a lower amount, the rent will remain the same.

CPI adjustments can be popular with landlords as they are less costly and time consuming to complete when compared with market rent reviews.

A drawback, however, is that in high inflation environments, CPI adjustments can result in significantly larger than anticipated rent increases, and the new rent payable may not be reflective of the general market.

It is open to landlords and tenants to agree to a different rent adjusted amount, even if the lease provides for a CPI adjustment, but agreement on rent reviews is not always easy to reach.

 

Fixed rent adjustment

In a fixed rent adjustment situation, the rent will increase by a fixed amount at specified intervals, regardless of changes in the market rent amount or CPI. This method of rent adjustment can provide both the landlord and tenant with certainty on rent amounts moving forward.

 

Limits for a rent review/adjustment

The lease may also provide for a limit for the rent review. Most leases specify that the reviewed/adjusted rent will not be less than the rent payable immediately before the relevant review or adjustment date, which means that the rental amount will either increase or stay the same. It won’t decrease!

Some leases specify that the rent will not be less than the annual rent payable at the commencement of the current lease term. Other leases specify that the rent will not be less than the rent payable at the commencement of the lease, though this is not common. The landlord and tenant are free to agree to an alternative method of limiting rent reviews if it suits their circumstances.

 

Important to understand the process

It is very important for both the landlord and the tenant to understand the rent review processes in the lease, as it can have significant implications for both parties. We can assist if you have any questions on your lease rent review process.

 

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

3 Things You Might Be Getting Wrong About Retirement Villages

Community & Lifestyle, Elder Law / Retirement Planning, Financial Planning, Legal Insights / Advice, Property & Real Estate
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Retirement villages are becoming a popular option for New Zealanders planning their retirement, but it is not the same as buying a house. Most villages provide an Occupation Right Agreement (ORA), which gives you the right to live there and use the facilities rather than legal ownership. Here are a few common misconceptions that can catch people out.

  1. “Weekly fees cover all my costs”
    Weekly fees usually cover village services (gardening, security, communal facilities), but residents often still pay for utilities, care services, or extra support.
  2. “All the money will go back to my family when I die”
    Your entry payment will likely not be returned straight away when you leave or pass away. In reality, it depends on the terms of the ORA and can often require the unit to be re-licensed to a new resident. Most villages will also deduct what’s often called a deferred management fee which can be up to 20–30% of the original entry price
  3. “All Contracts Are the Same”
    Not all retirement villages play by the same rules. Fees, exit conditions, and benefits vary, and small differences can have a big impact.

Moving into a retirement village is a big decision, both legally and financially. If you are considering this step, it is important to seek advice from your lawyer, so you fully understand what it means for you and your family.

 

Georgia Willard

Luke & Sally’s First Home Journey

Buying with Confidence, First Home Buyers, Inheritance & Property, KiwiSaver & First Home Grant, Legal Guidance for Home Buyers, LIM & Builder’s Reports, Luke & Sally’s Journey, Property Law, Real Estate Transactions, Settlement & Conveyancing
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Luke and Sally recently began the exciting adventure of buying their very first home.

This opportunity came about following the sad passing of Steve, from whom they received an inheritance. This opened the door for them to take their first step onto the property ladder something they had long hoped for.

 

From the very beginning, Luke and Sally involved their lawyer and that made all the difference. Before signing anything, their lawyer carefully reviewed the draft Agreement for Sale and Purchase.

 

Together, they worked through the terms to ensure Luke and Sally understood them fully, and that the Agreement included all the conditions they needed to protect their interests.

 

For many first-home buyers, these conditions often include:

Finance approval – making sure lending is in place.
KiwiSaver withdrawal or First Home Grant – ensuring these funds can be used in time.
LIM report – checking council records for any issues.
Builder’s report – confirming the home is sound and safe.
Toxicology report – reassurance that the property isn’t contaminated with any toxic substances such as methamphetamine.
Any other conditions the buyers consider necessary – because every purchase is unique.

 

Once the Agreement was signed, Luke and Sally’s lawyer continued to guide them through every step of the transaction. They assisted with satisfying each condition, provided clear instructions for paying the deposit, and managed all the details between the Agreement going unconditional and settlement day. From liaising with the bank to preparing loan and mortgage documents, their lawyer ensured nothing was left to chance.

 

Finally, on settlement day, Luke and Sally received the keys to their new home with peace of mind knowing that every stage of the process had been looked after with care.

 

At Edmonds Judd, we encourage buyers to involve their lawyer from the very beginning. From reviewing the draft Agreement, through the conditional and unconditional phases of the transaction, to settlement itself — having the right legal guidance makes the journey smoother, safer, and far less stressful.

 

Here’s to new beginnings and secure decisions.

Rachael Beattie

Get in touch today, we’d love to talk.

+64 7 872 0236 [email protected]