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Spring is here—and hopefully level 1 will be soon enough, too.
To celebrate the season, which is usually a big one for house sales, we’re running a Spring Conveyancing Campaign. You can save 20% on our normal conveyancing prices when buying or selling residential property.
All you have to do is:
It's Wills Month!
We’re coming towards the end of September, but you’ve still got a few days to celebrate one of the most exciting months of the year: Wills Month!
We’re not sure who declared it to be that, but it’s a great idea, as less than 50% of New Zealanders have a will—yet 100% should have one.
A will allows you to say what you want to happen to your property after you die, even though you won’t be there to say it yourself. If you don’t have a will, there are some default rules that apply. But it might be that you’d prefer things didn’t happen that way.
So if you haven’t got around to creating a will, or you haven’t reviewed or updated yours in some time, now’s a great time to act. Contact us to create or review your will.
Buying or selling property during COVID-19
The impact of lockdowns on commercial leases
The return of levels 3 and 4 lockdown restrictions also means the return of questions about things like commercial leases. What happens when a tenant is unable to access their premises?
This is covered by “no access” clauses, the most common of which is clause 27.5 of the standard Auckland District Law society lease document. It provides for a reduction of rent (in part or in total) when a tenant is unable to access their premises in the context of an emergency.
However, just what that reduction should be is not defined. The amount is up for negotiation between the tenant and landlord—along with whether any reduction should apply at all.
And that can cause issues when the parties can’t agree.
This arose in a recent case, SHK Trustee Company Ltd v NZDMG. The tenant had requested a reduction in rent during March 2020, but the parties didn’t reach an agreement. In the meantime, the tenant stopped making payments. A few months later, the landlord cancelled the lease with a Property Law Act notice.
In subsequent legal action, the High Court suggested that the issuing of that notice may have been unlawful. That’s because the notice was for the entire period of April through July 2020, and didn’t consider any rent reduction for lockdown periods.
The effect of that? If a landlord cancels a lease without taking into account any lease clauses relating to rent reduction, their action might be unlawful, and a tenant may be able to claim damages.
Residential rents skyrocketing
New Zealand’s median weekly rent reached an all-time high of $550 in July, according to Trade Me Property’s Rental Price Index. This represented a record-breaking increase of 10 percent since July 2020, the largest growth Trade Me has seen since they started recording rents in 2015.
Rents in Canterbury increased by 7.1 percent for the period.
Nationally, demand still outweighs supply, with the number of rentals available down 8 percent since July 2020. And demand in Canterbury is particularly high—up 26 percent.
How can border reopening proceed?
Like many countries, New Zealand is aiming to vaccinate more and more people with the Pfizer vaccine. It’s the most important component of a successful elimination policy. And as of this email, nearly 3.2 million of us have received at least one dose, with 40.3% of the eligible population being fully vaccinated.
But at what point does that lead to a reopening of borders? From the news this week, it seems likely the vaccination rate will need to be considerably higher. That may lead New Zealand to move from its present elimination strategy in order to introduce a phased border opening, allowing vaccinated travellers from low-risk countries to visit without quarantine.
But we’re also faced with a challenging question: should vaccinations remain voluntary, or should the risk of harming others override individual rights to refuse to be vaccinated? Generally individuals have the right to refuse medical treatment, and at this point the Government has ruled out making vaccination compulsory. That would further suggest a change from the elimination policy will probably be necessary.
One option could see unvaccinated people restricted from entering places like cafes, bars, restaurants and other venues to reduce risk to others. That would mean vaccination would still not be compulsory—but in a practical sense, life without it would be considerably more challenging.
The next few weeks might provide some more answers.
And that's it for September! Last month we hoped this would reach you out of level 4 lockdown. This month we hope the next reaches you at level 1. As always, we’re just an email or phone call away for any questions, help or advice. See you next month.
To celebrate the season, which is usually a big one for house sales, we’re running a Spring Conveyancing Campaign. You can save 20% on our normal conveyancing prices when buying or selling residential property.
All you have to do is:
- register on our website while the offer is active
- sign a sale and/or purchase agreement for residential property any time between now and Christmas
It's Wills Month!
We’re coming towards the end of September, but you’ve still got a few days to celebrate one of the most exciting months of the year: Wills Month!
We’re not sure who declared it to be that, but it’s a great idea, as less than 50% of New Zealanders have a will—yet 100% should have one.
A will allows you to say what you want to happen to your property after you die, even though you won’t be there to say it yourself. If you don’t have a will, there are some default rules that apply. But it might be that you’d prefer things didn’t happen that way.
So if you haven’t got around to creating a will, or you haven’t reviewed or updated yours in some time, now’s a great time to act. Contact us to create or review your will.
Buying or selling property during COVID-19
While COVID and lockdowns can stop plenty of things, they don’t stop property sales and purchases.
However, they can limit things. For example:
- At level 4, you’re unable to move house, except under extreme circumstances. Conveyancing and real estate work can only happen remotely.
- At level 3, viewings and inspections can only happen in certain conditions. Conveyancing work can only happen remotely.
- At level 2, open homes and auctions are subject to physical distancing requirements.
For a full rundown of limitations and other issues, see the Ministry of Justice’s Guidance for property sales and settlements during COVID 19.
Because of these limitations, we recommend you take extra care with agreements for sale and purchase. If, for example, you sign one during level 2 and we move to level 4 before the settlement date, it might affect your ability to inspect the property, or to move on time.
To help out, we've provided a clause your real estate can insert into your agreement for sale and purchase. It means that should alert levels change during the buying or selling process, settlement will be deferred until five working days after we move into an alert level where settlement can take place safely. Find it on our website here.
The impact of lockdowns on commercial leases
The return of levels 3 and 4 lockdown restrictions also means the return of questions about things like commercial leases. What happens when a tenant is unable to access their premises?
This is covered by “no access” clauses, the most common of which is clause 27.5 of the standard Auckland District Law society lease document. It provides for a reduction of rent (in part or in total) when a tenant is unable to access their premises in the context of an emergency.
However, just what that reduction should be is not defined. The amount is up for negotiation between the tenant and landlord—along with whether any reduction should apply at all.
And that can cause issues when the parties can’t agree.
This arose in a recent case, SHK Trustee Company Ltd v NZDMG. The tenant had requested a reduction in rent during March 2020, but the parties didn’t reach an agreement. In the meantime, the tenant stopped making payments. A few months later, the landlord cancelled the lease with a Property Law Act notice.
In subsequent legal action, the High Court suggested that the issuing of that notice may have been unlawful. That’s because the notice was for the entire period of April through July 2020, and didn’t consider any rent reduction for lockdown periods.
The effect of that? If a landlord cancels a lease without taking into account any lease clauses relating to rent reduction, their action might be unlawful, and a tenant may be able to claim damages.
Residential rents skyrocketing
New Zealand’s median weekly rent reached an all-time high of $550 in July, according to Trade Me Property’s Rental Price Index. This represented a record-breaking increase of 10 percent since July 2020, the largest growth Trade Me has seen since they started recording rents in 2015.
Rents in Canterbury increased by 7.1 percent for the period.
Nationally, demand still outweighs supply, with the number of rentals available down 8 percent since July 2020. And demand in Canterbury is particularly high—up 26 percent.
How can border reopening proceed?
Like many countries, New Zealand is aiming to vaccinate more and more people with the Pfizer vaccine. It’s the most important component of a successful elimination policy. And as of this email, nearly 3.2 million of us have received at least one dose, with 40.3% of the eligible population being fully vaccinated.
But at what point does that lead to a reopening of borders? From the news this week, it seems likely the vaccination rate will need to be considerably higher. That may lead New Zealand to move from its present elimination strategy in order to introduce a phased border opening, allowing vaccinated travellers from low-risk countries to visit without quarantine.
But we’re also faced with a challenging question: should vaccinations remain voluntary, or should the risk of harming others override individual rights to refuse to be vaccinated? Generally individuals have the right to refuse medical treatment, and at this point the Government has ruled out making vaccination compulsory. That would further suggest a change from the elimination policy will probably be necessary.
One option could see unvaccinated people restricted from entering places like cafes, bars, restaurants and other venues to reduce risk to others. That would mean vaccination would still not be compulsory—but in a practical sense, life without it would be considerably more challenging.
The next few weeks might provide some more answers.
And that's it for September! Last month we hoped this would reach you out of level 4 lockdown. This month we hope the next reaches you at level 1. As always, we’re just an email or phone call away for any questions, help or advice. See you next month.
Regards,
Clive, Grant and the Team at Canterbury Legal
