The Property Law Act 2007 – for landlords and tenants

If your business leases land, either as a landlord or tenant, you also need to be familiar with The Property Law Act 2007 (the PLA). The PLA has updated a number of technical legal rules relating to property.

The most significant provisions of the PLA for most New Zealand businesses are the changes relating to property leases. These changes are:

• Short-term leases (i.e. leases for one year or less) have greater legal recognition;
• If a tenant leases a property that is not in good condition, it is not required to put the property into good condition at the end of the lease term (as was sometimes required before the PLA became law);
• Landlords have no right to “distrain” – that is, landlords can no longer take possession of a tenant’s chattels and sell them to cover outstanding rent payments; and
• Landlords have also lost their right to terminate a lease immediately if a tenant fails to pay their rent; under the PLA a landlord must give a tenant 15 working days’ notice before terminating the tenant’s lease for failure to pay rent.

The PLA also changed a number of the forms which must be used in the event of a dispute between a landlord and tenant and the time limits which apply before action can be taken. Consequently, if you are involved with any dispute involving land, particularly a landlord/tenant dispute, contact us to ensure that you meet your obligations under the PLA.