QCL Lease Checklist

Premises

Are there any limitations of the liabilities of parties?

2.2

3

The parties are correctly described and have legal capacity.

Parties

The following paragraphs set out a guideline for issues to be considered in the document review.

DEED OF LEASE

2.1

2

1

Issue

Based Documents:

Name of Tenant (s):

Name of Landlord (s):

Date:

Responsibility (indicate individual)

Commercial Lease Checklist

Required Date for Information

TIMETABLE

Report Completion Date

The parking areas are correctly described.

Are there any options available to take further space?

Proper access is available to the premises, common areas and car parks.

3.3

3.4

3.5

Are all necessary consents in place to ensure the permitted use is lawful?

4.3

Is the term less than 1 year? If so, see Short-term lease under Section 209 of the Property Law Act 2007.

Does the lease contain sufficient terms? i.e. rights of renewal/extension and whether these rights have been exercised

Are there any rights of early termination?

What are the dates on which renewal notices must be given?

5.1

5.2

5.3

5.4

Term

Is the landlord able to lease nearby premises to competition?

4.2

5

Is the permitted use adequate? Can the permitted use be changed with consent?

4.1

Use

The common areas are correctly described.

3.2

4

The premises are correctly described.

3.1

Issue

Responsibility (indicate individual)

Required Date for Information

TIMETABLE

Report Completion Date

Is the lease terminable on the happening of a specified event? If so, consider Section of 212 Property Law Act 2007.

Is the rental as specified in the agreement?

Are the rent review provisions acceptable?

5.7

5.8

5.9

6.1

6

5.10

If the lease is a sublease, is the term correctly described and do the renewal provisions work with the superior lease provisions? Is an obligation required on the landlord to renew the superior lease?

5.6

Are there any inappropriate restrictions on assignment or subletting?

Assignment

In a sublease, what is the impact of a review of the superior lease rent?

• Third party independent valuer to assess rent.

• Backdating in the event of a delayed review; or

• Ratchet clause;

• Method of review;

• Frequency;

Consider:

Does the lease amount to a subdivision? If so, has resource consent been obtained?

5.5

Issue

Responsibility (indicate individual)

Required Date for Information

TIMETABLE

Report Completion Date

Are there any anticipated significant outgoings?

Sinking fund –

7.3

7.4

9.1

Are the tenant’s obligations to redecorate on the termination of the lease sufficiently described and acceptable? Do they include an obligation to remove fit-out already in place?

Redecoration on the expiry

Are the maintenance obligations imposed on the landlord acceptable, and are they being met? Are there positive obligations on the landlord to repair where the tenant has no liability to repair?

8.2

9

Are the maintenance obligations imposed on the tenant acceptable?

Maintenance during the term

• If not, on an assignment will the assignee receive a refund of payments made?

• Is the assignee entitled to the benefit of payments made by the assignor?

• What are they to be used for?

• Who holds the funds?

8.1

8

What is the budget of outgoings?

7.2

• If there is a sinking fund, what is its state?

What are the outgoings and who pays for these?

Outgoings

7.1

7

Issue

Responsibility (indicate individual)

Required Date for Information

TIMETABLE

Report Completion Date

Have the specified perils in the landlord’s insurance policy been checked against the lease provisions?

11.3

Who manages the body corporate? Is it effective?

Are the body corporate rules acceptable?

13.3

13.4

Warranties and indemnities in lease

Are there any unusual costs anticipated?

13.2

13.5

Are the premises parts of a body corporate development? If so, a Section 36 certificate is required.

Body Corporate

Does the lease require a guarantee? If so, are the relevant provisions acceptable? Is it limited by time or by amount?

13.1

13

12.1

Guarantee

Does landlord’s insurance policy cover the tenant’s interest?

11.2

12

Are the tenant’s obligations relating to insurance acceptable?

11.1

Insurance

Are the obligations to maintain the landlord’s fixtures, fittings and chattels acceptable?

10.2

11

Are the fixtures and fittings and chattels of the landlord comprehensively described?

Fixtures and fittings

10.1

10

Issue

Responsibility (indicate individual)

Required Date for Information

TIMETABLE

Report Completion Date

www.linz.govt.nz/overseas-investment/ for explanatory notes and guidelines.

(b)

Are all the lease documents available and correctly signed?

Are there any other onerous provisions?

17.2

Miscellaneous

Is the tenant inheriting any unacceptable environmental liability?

Environment liability

Who pays the costs of preparing/negotiating the lease? Is it acceptable?

Costs

Overseas Investment Act 2005.

(a)

Is overseas investment office consent required? See:

OIO

• Does the landlord warrant fitness of the premises for the purpose the purchaser proposes to use the premises?

• In what circumstances does the tenant indemnify the landlord?

• Are the costs of compliance recoverable from the tenant?

• Who warrants compliance with legislation?

Review warranties and indemnities in the lease; i.e. –

17.1

17

16.1

16

15.1

15

14.1

14

13.6

Issue

Responsibility (indicate individual)

Required Date for Information

TIMETABLE

Report Completion Date

17.3

Are the implied covenants applicable or excluded?

Issue

P O Box 6908, Wellesley Street Telephone: 0-9-970 8810 Facsimile: 0-9-970 8820 DX CP24080 marcus@queencitylaw.co.nz john@queencitylaw.co.nz tina@queencitylaw.co.nz joe@queencitylaw.co.nz jan@queencitylaw.co.nz

Queen City Law

Responsibility (indicate individual)

Required Date for Information

TIMETABLE

Report Completion Date