Category: Property

The Granny Flats Exemption has come into effect as of January 2026.  In summary, it is set to allow homeowners to build a second, smaller dwelling on their property without the need for a building or resource consent and the higher cost the consents process brings – so long as the build meets the exemption requirements.

Requirements:

• must be a new single-level building of no more than 70m²;
• must meet Building Code standards;
• must be built (or supervised) by a licensed building professional; and
• must be at least 2m from other dwellings and boundary lines.

Timelines and Important Steps:

• homeowners will still need to apply for a Project Information Memorandum (PIM) before commencing any work. This is to identify any potential risks and hazards early on;
• Council will then have 10 working days after receiving the application to issue the PIM;
• the build must be completed within two (2) years of the PIM being issued. Extensions can be applied for;
• once the build is completed, all relevant documents (including final design plans) and payments must be submitted to Council within 20 working days. The build is considered completed when the homeowner is in receipt of the following from the licensed building professionals:
  • Record of Works (ROW) for plumbing and drainage work;
  • ROW for restricted work carried out (or supervised) by the licensed building professionals;
  • certificates of compliance and electrical and gas safety certificates.

Costs:

• with the issue of the PIM, Council may also issue a development contribution notice. This charge relates to any support that is required for infrastructure and services caused by the construction process;
• depending on the Council, the area, and the size of the granny flat, it is expected that development contributions will range from around $17,000 to $30,000 in urban areas, to under $10,000 in some rural areas;
• development contributions are paid when the build is complete alongside the relevant documents Council requires.

The Granny Flats Exemption may not be suitable for every homeowner looking to build a granny flat.  The Ministry of Business, Innovation and Employment have pulled together a guide book with helpful checklists to aid homeowners in understanding and deciding whether this new process would be best for their project Granny Flats Exemption Guidance. Please do not hesitate to reach out to our Property Team should you have any questions.

What is a Long-Term Maintenance Plan (LTMP)?

A LTMP is a planned maintenance strategy for bodies corporate.

A LTMP allows current owners and future owners to know what works are required to maintain the building asset, common property and commonly owned assets, as well as when the works are required. This in turn allows owners to be able to budget accordingly for these works without any big surprises.

What types of things are covered in a LTMP?

• Building washes
• Lift replacement
• Roof replacement
• Repainting of the building
• Cladding replacement

Should my BC have a LTMP?

Yes, a body corporate is required by legislation to have a LTMP (section 116 Unit Titles Act 2010 (Act)). There is no ability to opt out of this requirement.

However, the requirement for the length of the LTMP varies depending on the size of the body corporate (BC).

A large BC (10 or more principal units) must have a LTMP that covers a period of at least 30 years from the date of the LTMP or the last review of the LTMP.  Unit Title Regulations 2011 section 30A.

A BC that is less than 10 principal units must have a LTMP that covers a period of at least 10 years.

How often should the LTMP be reviewed?

The LTMP must be reviewed every 3 years, however, if the BC becomes aware of any matter than may have a material impact on the LTMP, the LTMP must be reviewed as soon as practicable.

What is a Long-Term Maintenance Fund (LTMF)?

A LTMF is what funds the LTMP.

Does my BC need a LTMF?

Section 117 of the Act dictates that a BC must establish and maintain a LTMF unless the BC, by special resolution (75%), decides not to do so.

Recent changes to the legislation also mean that if the BC has decided not to establish the funds, the BC:

1. Must review the decision annually; and

2. May, by special resolution, decide to establish a fund.

Whether the BC should have a LTMF or not, is going to differ from BC to BC, as each BC has different needs.

For example, if the only common asset of the BC is a shared driveway, then the BC may consider it reasonable not to have a LTMF, and owners can pay for the maintenance of this driveway when it is needed.

However, for a 100-unit apartment complex with a swimming pool, gym and lifts, it is reasonable to have a LTMF.

Are there restrictions around how the LTMF can be used?

Yes, the BC can only use the LTMF for spending in relation to the LTMP; so, the BC cannot dip into this for other general BC expenditure, or unplanned expenditure. This is why reviewing the LTMP as soon as the BC becomes aware of any necessary maintenance is so important.

How much should be in my BC’s LTMF?

This is not black and white, as this is dependent on the needs of the BC.

It may be beneficial for a BC, when preparing a budget for the LTMF, to engage the assistance of specialists/professionals.

Why should unit title owners have to pay towards a LTMF?

Not having a LTMP/LTMF can impact the following:

• Re-saleability: purchasers see value in a well-maintained building, and a BC which has money in the kitty to pay for the necessary maintenance. Purchaser’s may be dissuaded from purchasing a unit title property where they know they will have to pay large levies for work that needs to be done in the near future, or they simply may not be able to finance this.
• Equitability: ensures that owners are paying for their use of the commonly owned property/commonly owned assets, rather than future owners who have not benefitted from the use of these and must pay for it down the line.
• Financial stability: allows owners to adequately budget for maintenance that needs to be done.

If you have any questions about LTMP or LTMF’s, please get in touch with our friendly property team.

The Residential Tenancies Amendment Act 2024 (the Act) introduces a series of significant changes to New Zealand’s rental laws, aimed at improving tenant security, modernizing tenancy processes, and fostering a fairer balance between the rights of landlords and tenants.

Here’s a brief look at the major changes under the new law:

1. Bond Lodgement and Online Payments

One of the key changes in the Act is the requirement for all tenancy bonds to be lodged and paid online. Previously, tenants and landlords were required to physically submit bond payments and sign documents. Now modernized, this process is streamlined and simplified, with all bond payments handled electronically. This not only improves efficiency but also enhances transparency and ease of access for both landlords and tenants.

Additionally, this online system ensures that bond processing is quicker, reducing any delays or errors that may have occurred with the old paper-based system.

2. Termination of Tenancies

The amendments make significant adjustments to how and when tenancies can be terminated.

Periodic Tenancies: Previously, landlords could only end a periodic tenancy if they had a specific termination ground, for example, demolishing the property or carrying out extensive renovations. This has changed significantly with the new amendments. Now, landlords must provide at least 90 days’ notice to terminate a periodic tenancy without a specified cause. However, if the landlord has specific intentions—such as the intention to sell the property or move into it themselves—the notice period is shortened to 42 days.

For example:

• If the landlord intends to sell the property and needs the tenant to vacate for the sale process, they are required to provide a 42-day notice.
• The same applies if the landlord (or a close family member) plans to move into the rental property.

Automatic Transition of Fixed-Term Tenancies: The Act also ensures that fixed-term tenancies, which previously ended on a set date, will automatically roll over into periodic tenancies unless a landlord or tenant gives notice to end a fixed-term tenancy between 90 and 21 days before the fixed term ends, no specific reason is required. Or, the parties agree otherwise, for example, to renew the fixed term or to end the tenancy.

These changes offer tenants more predictable and stable living conditions, while also clarifying the process for both landlords and tenants.

3. Family Violence Provisions:

The Act also clarifies that a tenant’s children or dependants may withdraw from a tenancy due to family violence.

If a tenant or their child/dependant experiences family violence during a tenancy, they now have the ability to withdraw from the tenancy by giving at least 2 days’ notice (with qualifying evidence of family violence) without any financial penalty, or agreement required from the landlord.

4. Pet Provisions

One of the most anticipated changes under the Act is the way tenants can now request to have pets in rental properties. Previously, landlords had the right to refuse tenants’ requests to keep pets without having to provide a reason. The Act shifts this, allowing tenants to request pets with the understanding that landlords can refuse—but only for legislated reasons.

These reasons are non-exhaustive, but could include:

• Concerns about damage to the property
• Allergies or other health concerns of the landlord or other tenants
• Incompatibility with other tenants’ pets or lifestyles

Landlords will also be able to require a ‘pet bond’ up to a maximum value of two weeks’ rent (in addition to the regular rental bond).

5. Other Technical Changes

Smoking Restrictions

The Act now clarifies that landlords can include smoking bans in their tenancy agreements. Smoking-related damage to properties, particularly from smoke residue or fire risks, has long been a concern for landlords. By giving landlords the option to impose smoking restrictions, the Act ensures that tenants maintain the property in good condition, while also fostering healthier living environments.

Communication via Email

Acknowledging the importance of digital communication in today’s world, the amendment allows email to be used as a valid form of communication between landlords, tenants, and Tenancy Services. This modernization reflects the growing reliance on technology and aims to make the process of sending and receiving important notices, agreements, and documents more efficient, accessible, and reduces reliance on slower, paper-based communication.

Simplified Tenancy Tribunal Dispute Resolution

Another important change involves the Tenancy Tribunal, the body responsible for resolving rental disputes. The Act allows for disputes to be resolved without formal hearings in some cases, potentially reducing the need for long waits and time-consuming legal processes. Instead, the Tribunal can resolve certain issues based on documentation or virtual hearings, making dispute resolution more efficient for both landlords and tenants.

Conclusion

The Residential Tenancies Amendment Act 2024 represents a major shift towards more equitable, transparent, and efficient rental laws in New Zealand. This new legislation creates a fairer balance between the rights and responsibilities of landlords and tenants. These changes modernize the rental experience, ensuring that both parties have clear guidelines and protections in place.

We are happy to discuss anything in this article that may have captured your attention.  Feel free to get in touch.

The Seventh Edition of the Law Association’s Deed of Lease template was released on the 24^th of November 2024, and replaces the Sixth Edition which, subject to some minor adjustments, had been standard since 2012. The new edition may be considered an early Christmas gift to some, but is it really out with the old and in with the new? Here’s a summary of the key changes to help you navigate the Seventh Edition Deed of Lease.

• Renewals Notice Period: The Seventh Edition allows parties to agree a renewal notice period that is longer or shorter than the former three months.  This allows flexibility for leases of different lengths and can account for time required to make good prior to termination.
• Rent Reviews: Rent Reviews now include more options for types of reviews (including fixed rent adjustment, as well as the standard CPI and market reviews), and expands the ratchet options, to include both hard, soft and custom options (e.g. rent must not be less than the previously payable rent, or the rent payable at commencement).
• Outgoings: The new edition also expands on the outgoings that may be charged, e.g. by including exterior and fencing repainting charges, accessway maintenance and minor repairs to external areas, reasonable management administration expenses for body corporates, and so on. There are also stricter requirements on the charging of outgoings, with landlords now being obliged to provide an annual budget of outgoings to tenants.
• Insurance: The new edition allows for parties to specify the insurance excess amount, and the default insurance excess has increased to $5,000 from the former $2,000 under the Sixth Edition. If an act or omission on the part of the tenant causes damage that exceeds the excess amount, the tenant is liable to pay the landlord.
• Health and Safety Obligations: Health and safety obligations are now explicitly imposed on all parties to the lease.
• Seismic Ratings: One major motivation for redrafting the Deed of Lease was the ongoing impacts of earthquakes on commercial infrastructure, and there is now a space to detail the building’s seismic rating. While the new edition does not penalise landlords for not specifying the seismic rating, it is a great prompt to discuss these matters.
• Bank Guarantees and Rental Bonds: The Seventh Edition now explicitly allows for bank guarantees and rental bonds to be provided as security against default.
• No access rent adjustments: Although the previous edition did provide for rental abatement where tenants are unable to access the property, the abatement was limited to being a “fair proportion”, which was often hard to assess. In the new edition, the parties can explicitly agree on a reduction percentage, and either party can call for that percentage to be reviewed in the context of a particular emergency.
• Tenants Fixtures and Fittings: Schedule 6 of the new edition now includes a dedicated space to list the tenant’s fixtures and fittings.

Overall, The Law Association’s new Seventh Editon Deed of Lease continues to aim to balance tenant and landlord responsibilities by expanding on the options available to both parties.  There is a lot of new content in a new edition, and although not everything will always be relevant, it is a great jumping off point for negotiations between the parties.

If you have any questions about the Seventh Edition Deed of Lease, please feel free to get in touch with our friendly property team.

What is a pre-settlement inspection?

A pre-settlement inspection gives you the opportunity to ensure that the property you are purchasing is in the same condition as it was in when you entered into the agreement. It also allows you to check that any chattels included in your purchase work as they are supposed to and that any work that the vendor promised to complete before settlement has been completed.

When should I complete my pre-settlement inspection?

Generally, pre-settlement inspections should be carried out at least two working days prior to settlement. This is to give enough time for any issues from this inspection to be raised with the vendor, and rectified. It also means that the vendor may have begun to move their belongings out of the property, so allows for a closer inspection of the property.

Does everyone get to do a pre-settlement inspection?

If the property you are purchasing is tenanted, you may not have a right to a pre-settlement inspection. If you are buying a tenanted property and wish to complete a pre-settlement inspection, you can contact us to help you negotiate a right to a pre-settlement inspection prior to entering an agreement to purchase a property.

How many pre-settlement inspections can I do?

Generally, you can only complete one inspection. However, if you ask that the vendor rectify an issue following your first pre-settlement inspection, and they agree to do this, then you can inspect the property once more to ensure that this work has been completed.

What should I look out for in my pre-settlement inspection?

There are plenty of checklists online, which we suggest you save to your phone or print out and take to the pre-settlement inspection with you.

Some of the things you should look out for are:

• Whether the chattels listed in the sale and purchase agreement are in reasonable working order (e.g. fridge, washing machine, dishwasher – you should ask to run these to check that they are working).
• Damage to walls which was not previously present (holes in the wall).
• Damage to carpets, flooring, curtains.
• Look at ceilings and around toilets, washing machines, dishwashers for any signs of leaks.
• Do the toilets flush?
• Are all the electrical sockets working?
• Are all the lights working?
• Have there been any broken windows?
• Do the sinks (kitchen, bathroom, laundry) drain properly?
• Do the oven and the oven lights work?
• Does the extractor fan work?

There are no issues, but the house is not in a clean and tidy state, what do I do?

Some purchasers will be surprised to find out that there is no requirement for the vendor to clean the house prior to settlement.

If you would like the vendor to get the house professionally cleaned before settlement, this is something that you should discuss with us before entering into an agreement.

Similarly, if you are concerned about the vendor leaving rubbish at the property, you should speak to us before entering into an agreement. We can negotiate a clause into the agreement which ensures that the rubbish is removed prior to settlement (if the vendor is agreeable of course!).

I’ve completed my pre-settlement inspection, and I have an issue, what should I do?

You should contact your lawyer immediately. They will be able to work with you to use the rights available in the sale and purchase agreement to rectify the issue or issues.

What remedies do I have available to me?

Generally, if there is an issue raised from the pre-settlement inspection, this does not give you a right to cancel the agreement. However, it can give you a ‘right to compensation.’

The following remedies may be available to you:

1. Asking the vendor to remedy the issue before settlement at their cost; or
2. Asking to reduce the purchase price to enable you to remedy the issues after settlement yourself; or
3. An agreed amount is retained on settlement until the issues have been resolved.

What if I find an issue after settlement has been completed?

It is much harder to get a vendor to engage once they have money in hand. However, if you do notice an issue post-settlement, you can get in touch with us to discuss your potential options.

If you have any questions about pre-settlement inspections, please feel free to get in touch with our friendly property team.

Properties with shared driveways are extremely common in New Zealand’s real estate market.  While some buyers look at them and appreciate the added privacy and control, others see the potential for issues to brew with their neighbours.  No matter which category you fit into, you may have questions about how exactly things will work after you purchase your new property.

Shared driveways can take different forms for different types of property.

Fee Simple – Right of way easements

One of the most common methods of creating a shared driveway over fee simple property is to register a right of way easement against the title. If your property has an associated right of way, it will include a notation along the following lines:

Appurtenant to Lot X DP XXXXXX is a right of way created by Easement Instrument XXXXXXX.X – DATE at TIME

Subject to a right of way marked X on DP XXXXXXX created by Easement Instrument XXXXXXX.X – DATE at TIME

For a crash course in easement terminology, “appurtenant to” means that the property has the benefit of an easement registered over another piece of land, and “subject to” means that the property has an easement registered over it, that other people or landowners are entitled to use.  If your property is shown on an easement instrument as being the “benefited land”, it gets the right to use the easement, and if your property is shown on an easement instrument as being the “burdened land”, it has the easement area on it.  The owner of the benefited land is known as the “grantee”, and the owner of the burdened land is known as the “grantor”.

The easement area itself is usually described as an area letter on a deposited plan.  Sometimes the relevant plan will be attached to the back of the record of title, and other times you, or your lawyer, will need to request a copy of the plan from Land Information New Zealand to see the exact location of the easement.

During your due diligence, you should always make sure to read the terms of the registered easement instrument to work out exactly what is and is not permitted.  Much of the time though, these terms will be light on detail and the easement will have the following notation:

Unless otherwise provided below, the rights and powers implied in specified classes of easement are those prescribed by the Land Transfer Regulations 2018 and/or Schedule 5 of the Property Law Act 2007.

To summarise right of way terms in plain English:

• Both the grantee and the grantor have the right to travel along the right of way, and can, by default, bring any vehicles, machinery, equipment, or animals along that right of way with them.
• The right of way area must be kept clear and cannot be blocked by parked cars, locked gates, items left behind or anything else that could get in the way of either parties’ use (at any time of the day).
• The only time the right of way does not have to be kept clear is where the parties are repairing or maintaining it.
• The grantee can repair and maintain the right of way as required, and can construct a right of way/driveway in the area if one does not already exist.
• If you share the benefit of the right of way, each person that has the benefit is equally responsible for sharing the costs of the right of way, except for where those costs are caused because of the actions of one party. So, for example:
  1. If all parties are using the right of way and it develops damage due to regular use, all parties must share the costs.
  2. If all parties are using the right of way, and one person causes damage by, say, dropping something heavy on the concrete, or spilling a large amount of oil on it, that party will be responsible for the repairs.
  3. If all parties are using the right of way, and one person is causing more wear and tear than the others, say, by driving a very heavy vehicle over the driveway daily, and a portion of the wear and tear can be attributed to that person, that person will be responsible for a greater share of the repairs and maintenance, with the balance to be split equally.
• If a party breaches their obligations, the other party/ies can serve notice, and if that default is not fixed within 10 working days, the non-defaulting party can fix the problem at the defaulting party’s cost. This means that in situation 2) above, the other parties could step in to fix the driveway and charge that owner for the costs of doing so.
• There is also a statutory process for dealing with disputes if the parties cannot do so themselves (via formal arbitration).

Fee Simple – Access lots

The other common way of creating a shared driveway for fee simple property is to have an access lot, which all the parties sharing the driveway have an equal ownership share in.  On the title, this shows as two distinct freehold interests, one of which will show as a fraction ownership, as below:

Sometimes the access lot will also have an easement registered over it.  However, if it does not, section 298 of the Property Law Act 2007 creates an implied vehicular right of way (under Schedule 5 of that Act), over the access lot and in favour of the various owners. While this schedule is less detailed than the easement rights created under the Land Transfer Regulations, it does, in practice,  re-create most of the terms, and provides a sturdy basis for the ongoing relationships between neighbours.

Cross-lease

Under a cross-lease a shared driveway is usually described as “common property” and its use will be subject to the provisions of the particular registered lease.  Your maintenance obligations will also be set out in the registered lease.

You, or your lawyer, will need to obtain a copy of the registered lease to ensure that the shared driveway is located in the right place and that the rules are clear.

Unit Title

For most unit title developments, a shared driveway will also be described as “common property”.  Their use is governed by the body corporate’s rules, whether registered, or implied under the Unit Titles Act 2010.  The body corporate will generally be responsible for the maintenance of the shared driveway and you will contribute towards the costs as part of the body corporate levies.

What does all of this mean for you?

While shared driveways are only one part of the overall picture of a property, they are often misunderstood and can affect both marketability and desirability of a property.  Demystifying those rights empowers all parties to make more informed choices about such properties, and helps to resolve small disputes between neighbours before they become bigger problems.

If you have any questions about rights of way, easements, or other aspects of property due diligence, please feel free to get in touch with our friendly property team.

On 29 May 2018, the Office of the Prime Minister’s Chief Science Advisor produced a report on Methamphetamine Contamination in residential properties.  Most of us will remember the various headlines in the newspaper and on the news and social media; “Meth house contamination debunked by PM’s science advisor” or “The Meth House is a Myth”.

Prior to the report toxicology reports, or “meth tests”, were commonplace and seen as an essential part of any purchaser’s due diligence investigation.  Since the report toxicology reports have fallen out of favour.  We have seen a rapid decline in purchasers opting to select “YES” to make their offer conditional on a toxicology report.

What was in the report?

The report mainly relates to health effects of third hand contamination in properties and compares the contamination levels from smoking meth to those from the manufacture of meth.

The report was produced to create discussion around the methods of testing, to establish more guidelines, and states that there is a clear need for more research.

In particular, the report noted that:

• There is evidence of “adverse physiological and behavioural symptoms associated with third hand exposure to former meth labs”.
• Lower levels of meth contamination do not rule out manufacture, and cleaning down to the former standard of 1.5 µg /100cm² may be necessary if you suspect manufacture within the house. However, it is not possible to conclusively determine whether a property has been used for manufacture or smoking based on the levels of meth found.
• That a level of 15 µg /100cm² may be more realistic, compared to the former guideline of 1.5 µg /100cm².
• Decontamination is only recommended for identified former meth labs or properties where excessive meth use, indicated by high contamination, has been determined.

Our advice

Our advice to you as a landlord, purchaser or homeowner, is to still have the property tested for meth.

You will need to consider:

• The “on sale” aspect of purchasing a contaminated house which may have the stigma of being a “meth house” and could prove harder to sell.
• Your mortgagee/lender and insurance company, and what their requirements are in terms of a contaminated house.
• Whether you (or your tenants) would expect the house to be entirely contamination-free. Occupants with respiratory issues or weakened immunity systems may be more susceptible to health issues associated with meth contamination, even at lower levels.
• If it is an investment property, will a toxicology report be required by your Property Manager?

Putting aside these issues, it may come down to personal choice as to what you would accept as an acceptable standard of contamination, versus what the Ministry of Health guidelines state.  These differences may be vast.

If you are looking at purchasing a house, we suggest that you contact our office so that we can discuss these matters further and if necessary, provide you with a suitable condition to insert in your sale and purchase agreement, to cover your requirements.

Kerri is a Senior Legal Executive in our Property Team and can be contacted on 07 958 7423.