New Deed of Lease

From WikiProperty

New Zealand Propertyreturns members will probably be aware that the Auckland District Law Society lease form is commonly used throughout New Zealand for commercial, industrial and retail premises.

The Auckland District Law Society has recently released a Fourth Edition 2002 version of this lease replacing the Third Edition 1993(2) version. The ADLS commercial deed of lease form was first published as a net rents lease in 1989. There have been some minor amendments since then but the Fourth Edition 2002 version is the result of the first full review.

Many of the changes are minor, reflecting changes in legislation or changes in market practice. However, Propertyreturns members should be aware that the provisions relating to rent reviews and renewals of lease have been completely revised.

Also, whereas the previous versions of the lease stated that the “Rent may be reviewed by the landlord as follows:..” the new version allows either the landlord or the tenant to initiate the rent review process. This is because there have been situations in the past where landlords have chosen not to review the rent at times when general rentals have dropped so as to lock in above current market rentals. The new version of the lease now makes it clear that the tenant can initiate the rent review in such a situation. Landlords may think this is a retrograde step but it should be borne in mind that the lease tries to strike a balance between landlords and tenants interests, which is a major factor behind its acceptance in the market place.

Anyone wishing to discuss the new version of the lease is welcome email me at greig.bourke@xtra.co.nz or contact me by telephone 09-303 4439.

Philip Dreadon

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