Commercial Leases

Almost all of our clients who are a landlord or a tenant of a commercial property use the Auckland District Law Society “ADLS” Lease. For those of you whose lease is on the 2012 format clause 27.5 of that lease provides for the right for a tenant to seek a reduction by a “fair proportion” of the rent and outgoings. There is deliberately no definition for what is a fair proportion because that will depend on the circumstances. There has been no case law to provide guidance on the interpretation of this clause in these circumstances for obvious reasons. What is largely agreed by most lawyers and commentators is: that clause 27.5 can apply in the current Covid-19 Level 4 Lockdown (there are interpretations which are not tested on issues like whether the tenant is an essential service or not and whether a tenant truly cannot “access” their premises); the landlord and tenant need to agree what is a fair proportion, neither party can impose their will on the other; if the parties cannot agree the dispute resolution provisions of the lease can be used; it is in the interests of the parties to try and agree a fair solution to both since in most circumstances the relationship is likely to continue. The landlord wants a tenant and usually the tenant will want premises to operate their business from when they are able to resume in some manner as we come to grips with Covid-19. The government has announced some intended changes to the Property Law Act (which will act retrospectively) to give tenants some limited relief by extending...

Not-for-Profits’ Obligations under their Constitutions and Statutes and COVID-19

The constitutions of most societies and charitable trusts require the holding of an Annual General Meeting within 3 or 4 months of their balance date (to allow time for accounts to be compiled and in many cases audited).  31 March is the balance date for the majority of societies and charitable trusts, with 31 December being the other most popular date.  After the approval of those accounts there are statutory obligations relating to the filing of annual returns.  Because of the COVID-19-related difficulties associated with travelling to holding meetings, we posted an article on 17 March 2020, “Holding (or not holding) General Meetings of Members in extraordinary circumstances,”.  Copies of that article were sent to the Registrar of Incorporated Societies, Charities Services, and senior staff in the Ministry of Business Innovation and Employment.   Government action On 8 April the COVID-19 Ministerial Group considered a background paper and made a number of decisions that offer societies and charitable trusts some relief from the obligations discussed in our 17 March article.   Compliance with statutes and constitutions The Minutes of the Decision of the COVID-19 Ministerial Group (see ) summarise the relevant decisions as follows: Extending statutory deadlines 8 noted that many statutory deadlines in corporate governance legislation, relating to such matters as holding annual general meetings and filing annual returns should be relaxed because they are unachievable or are relatively unimportant in the current circumstances; 9 noted that there are powers to make exemption notices in relation to statutory obligations under some Acts (e.g. the Financial Markets Conduct Act 2013 and the Charities Act 2005) but not others (e.g. the...