If you own a commercial property in New Zealand, chances are you’re using the standard lease form prepared by the Law Association of New Zealand.  In November 2024, they released the seventh edition of this lease – and it’s had some important updates.

Because this is the most commonly used lease in the country, it’s a good idea to get familiar with what’s changed. Here’s a quick summary:

1.  Rent Reviews – More Options, More Control

You now have a third choice when setting up rent reviews: fixed increases (e.g. 2% per year).  You can also agree on a maximum and minimum rent, so the rent doesn’t go too high or too low during reviews.

2.  Outgoings – Clearer Breakdown, More Transparency

The list of outgoings (costs the tenant pays on top of rent, like rates and maintenance) has been updated.  Landlords now need to:

• Give tenants a budget of these costs each year before the lease anniversary.
• Provide documents (like council rates or insurance bills) if the tenant asks.

3.  Lease Security – More Choices

There are now different ways for the Landlord to secure rental payments under the lease. The Landlord and Tenant can agree on:

• A bank guarantee
• A rental bond

The landlord also needs to confirm whether their bank (or mortgage holder) needs to give permission for the lease.

4.  Insurance – Higher Excess, New Tenant Responsibilities

• The default insurance excess the tenant pays has gone up to $5,000 (was $2,500).
• If the tenant damages something and the repair cost is less than the excess, they have to cover the full cost themselves.

5.  Seismic Information – Know the Building Rating

Landlords must:

• Share the seismic rating of the building with tenants; and
• Keep tenants updated if new information comes to light

However, landlords don’t have to guarantee the rating is correct.

6.  Health and Safety – Clearer Legal Duties

The lease now spells out that both parties must meet their obligations under the Health and Safety at Work Act 2015.

7.  Emergencies – Default Rent Reduction

If the tenant can’t access the building in an emergency (like during a flood or earthquake), they may get a 50% rent reduction by default.

Alternatively, you can agree upfront on a different amount or a “fair proportion” depending on the situation, rather than the default 50%.

Why This Matters

If you’re signing a new commercial lease, it’s important to understand these updates and make sure the terms fit your situation.

Also keep in mind: even if you only sign an Agreement to Lease, these new terms will still apply — even if you don’t sign a Deed of Lease later.

Need Help?

It is worth having a lawyer look over the lease with you, that way you can make sure you’re getting the right deal and avoiding future surprises.  Feel free to contact CS Law if you would like to know more!