New Dam Safety Regulations

Written by Veneeta on . Posted in Commercial Property, Development & Leasing.

By Clare North

19 February 2024

Until this year, New Zealand was one of the few countries in the OECD that did not have a national framework for dam safety. Given the risks posed by New Zealand’s physical geography and the increasingly volatile climate, the Government introduced the Building (Dam Safety) Regulations 2022 in May 2024 to address the risk posed by dams.

The new Regulations apply to dams that are:

  • Four or more metres in height with a storage capacity of 20,000 or more cubic metres of water, or other fluid; or
  • One or more metres in height with a storage capacity of 40,000 or more cubic metres of water, or other fluid.

The owners of these (classifiable) dams will need to familiarise themselves with their responsibilities under the new Regulations and the Building Act 2004. Owners of dams which fall outside these thresholds (for example, small ‘turkey nest’ dams, irrigation races, stock drinking ponds and weirs) will not be affected by the Regulations.

Under the Regulations, the owners of dams that meet the criteria set out above are required to assess the impact the failure of their dam would have on the local community, historical or cultural places, infrastructure and the environment. This assessment will determine the dam’s Potential Impact Classification (PIC), which will be either low, medium, or high. The PIC must be audited by a Recognised Engineer and then submitted to the regional council for approval. 

The owners of dams, which are categorised as medium or high PIC must then complete a Dam Safety Assurance Programme (DSAP), which must be approved by a Recognised Engineer and submitted to the regional council for approval.

Following approval of their DSAP, dam owners must arrange for a Recognised Engineer to complete an annual compliance audit and prepare a compliance certificate. Dam owners must then review their PIC and DSAP at prescribed intervals.

While most small farm dams, ponds and weirs will be excluded from the Regulations, fines for non-compliance are significant and it will be important for property owners to assess any dams situated on their property. Dam owners have until August 2024 or three months after a dam is commissioned (whatever is later) to submit a PIC to the regional Council and between one and two years to complete a DSAP (depending on whether the dam is classified as medium or high impact).

If you would like to know more about the new Dam Safety Regulations, we would be happy to help, please contact us at Pitt & Moore on 03 548 8349.

man writing on paper

New requirements for Terms of Trade and other standard contracts

Written by Veneeta on . Posted in Commercial Property, Development & Leasing.

By Geoff Caradus

16 November 2021

Up until recently businesses have been relatively free to include aggressive and unfair terms and conditions in their terms of trade and standard form contracts used with other businesses. 

Recent amendments to the Fair Trading Act mean that all businesses will now need to review and update their terms of trade and other standard form commercial contracts used with other businesses to ensure they do not include unfair terms.

What types of contracts are caught?

The amendments are targeted at preventing unfair contracts regime in small (i.e. with a contract value of $250,000 or less per annum) standard form business to business (B2B) contracts. All businesses using standard form contracts which have an annual contract value of $250,000 or less should be reviewed. Standard form contracts used with consumers are already subject to the unfair contracts regime and have been for some time.

What is an unfair contract term?

The Commerce Commission has existing guidance available on its website setting out its view as to what amounts to an unfair contractual term in relation to consumer contracts. That guidance is also helpful in relation to B2B contracts. Further guidance is expected to be released soon.

Obvious examples of unfair terms include heavily one sided termination provisions, unilateral variation provisions and limitations and exclusions of liability. The existing guidance suggests that all terms including seemingly innocuous terms have the ability to be unfair.

Factors a court will take into account when determining if a contractual term is unfair include:

  • whether the term would cause a significant imbalance between the parties contractual rights and obligations;
  • whether the contract term is not reasonably necessary to protect a legitimate interest of the person who’s benefit it is for;
  • whether the term would cause detriment.

The extent of transparency and overall terms of the contract are also relevant.

What are the consequences of using an unfair contract term?

From 16 August 2022 any unfair terms in B2B contracts will be in breach of the Fair Trading Act. As with many other offences of the Fair Trading Act, the consequences of conviction are substantial and may result in a fine of up to $200,000 for an individual, or up to $600,000 for a business.

Key takeaways

Businesses need to ensure their existing terms of trade comply with the new regime. Because of the tight timeframes and volume of work the amendments have created we recommend instructing a specialist commercial lawyer to review your terms of trade as soon as possible.

Because the new requirements significantly curtail the ability of businesses to protect themselves through one-sided contractual terms, we also recommend speaking to your insurance broker or insurer to ensure your existing levels of insurance cover are adequate.

Talk to us

If you would like more in-depth advice or further information about the content of this article, please don’t hesitate to contact Rhys Thompson or Mariam Matti from the Commercial Team. They can be contacted on (03) 548 8349 or rhys.thompson@pittandmoore.co.nz or mariam.matti@pittandmoore.co.nz.

Privacy Update: Businesses, it’s time to check your privacy policies

Written by Veneeta on . Posted in Commercial Property, Development & Leasing.

By Rhys Thompson

8 August 2021

In our experience most New Zealand’s businesses are very aware of the need to ensure compliance with their health and safety obligations, but not all are aware of the need to comply with privacy laws.  

All businesses will collect and handle some form of personal information which is subject to New Zealand’s privacy laws and as such need to comply with New Zealand’s privacy laws.

To those not familiar with our privacy laws, the extent of personal information captured is surprisingly broad. It includes personal information collected about people external to the business (e.g. customers) but also people within the business (e.g. employees).  Personal information can take a number of forms and for example may include information held on files, registers, emails, written records and audio and video recordings (including your security cameras).

The types of businesses captured is also very broad and includes most activities undertaken for profit. For example, most mum and dad residential property investors don’t realise that they are subject to and need to comply with privacy laws regarding tenants personal information.

Privacy Officer

The starting point for compliance with privacy laws is appointing a privacy officer. Every business is required by law to have an appointed privacy officer. Your privacy officer can be a person within your business (e.g. a director or senior manager) or an external advisor (e.g. your lawyers). The role of the privacy officer is to encourage and ensure compliance with our privacy laws. In order to meet their obligations the privacy officer will need to be fully engaged with how your businesses collects, uses and disposes of personal information.

If you are looking at appointing an internal privacy officer the Privacy Commissioner has extensive free resources and e-courses available on its website (www.privacy.org.nz).

What’s new

Late last year, the Privacy Act 2020 came into force and made a range of significant updates to New Zealand’s privacy laws. One notable change is a requirement for businesses to notify the Privacy Commissioner where a privacy breach is likely to cause serious harm.

Consequently, it is now recommended that in addition to a privacy policy all businesses have a privacy breach response plan which sets out how you will respond to privacy breaches in a way that complies with New Zealand privacy laws.

What’s at stake?

In terms of legal consequences fines for privacy breaches generally range from around $5,000 to $50,000. However, fines for the most serious of breaches in New Zealand have be known to exceed $150,000. In addition to monetary liability, privacy breaches also have consequences for your business’ reputation.

Governance Responsibilities

If you have an executive or governance function within your organisation you should be asking for a regular privacy reports alongside your health and safety reports. The privacy report should cover a range of matters including your key metrics (privacy disclosure requests, breaches and response and resolution times), details of controls, IT security systems, security audits, timetabling and financing).

Talk to us

If you need advice or assistance with your privacy compliance program get in touch with the team at Pitt and Moore and ask for Rhys Thompson. He can be contacted on (03) 545 7899 or rhys.thompson@pittandmoore.co.nz.

Buying to Build – Tips to Get it Right

Written by Pitt & Moore Admin on . Posted in Commercial Property, Development & Leasing, Residential Property (Buying or Selling a House).

If you’re thinking of building from scratch, either with a house and land package or you’re buying a section, it pays to research and conduct due diligence which could end up saving you time, money, stress and heartache. Whether it’s a dream home you’re planning or a family bach, the details are important to get right before you sign a sale and purchase agreement or builder’s contract. Here are a few areas to consider.

Plans and specifications

You need to give yourself time to properly review the plans and specifications. That means checking the measurements, the materials and products that will be used, as well as the plan itself right down to the number of electrical plugs in each room. If you don’t feel confident about doing this, talk to your lawyer for a recommendation of an external expert to help. Remember the plans you sign up for in the agreement will determine what your future house will look like so it’s important to take the time to check them off against your expectations and make sure it includes everything you discussed with the builder or developing company.

Land that doesn’t have a certificate of title

When a title hasn’t yet been issued, an agreement for sale and purchase will need to include a ‘sunset’ clause that title will be provided within an agreed time frame. This gives the buyer the right to cancel the sale if there are significant delays. Your solicitor will need to review the head title and resource consent for the subdivision as well as the title plan, if available, to determine what easements, land covenants and consent notices will be registered against the new title. As there is no separate title with registered interests for the section that you are purchasing, your solicitor may have to review a large amount of documentation to identify what will and will not be relevant to you.

The land – are there any covenants?

With land that is being built on for the first time, it’s important to check carefully to see if there are any covenants that may impact on what you want to build. This could be around access, size and style of house and outbuildings, building materials and where the house can be built on the lot, so it’s critical for the design and planning of your property. Similarly, Council consent notices may impose specific geotechnical and foundation requirements that could add significant building costs.

Unforeseen building problems

It’s a regular occurrence that an unforeseen problem like bad weather or an increase in cost of materials impacts on the design, cost and/or time frame of a build. That’s why it needs to be clearly outlined in a written contract with the builder as to what happens in these situations. Often it can be external issues, so the sensible option is that both parties agree, at the outset, how these issues will be handled, what variation in time frames are acceptable, and if things do blow out time or cost-wise how that burden will be distributed.

Timing of payments

The timing of payments under your sale and purchase agreement and building contract are critical and you will need to make sure that you can meet your payment obligations as they come due, especially if you are relying on bank financing. Most standard form building contracts provide for progress payments to be made at each major stage of the build. However, if your build begins before title has been transferred you will not have any mortgage security to offer your bank. It is important that you talk to your bank before confirming your purchase even if you have pre-approval.

Finally, all these issues revolve around the documents – the sale and purchase agreement and any contracts with builders. These are the legal documents that state your rights and obligations and those of the developer and builder. It’s vital that you consult a lawyer to make sure that each agreement meets your specific situation and that in the worst-case scenarios you will be sure of the outcomes.

Talk to us

For more information on this topic please contact:

Adrien Turnage, Solicitor, Pitt & Moore Lawyers
Email: Adrien.Turnage@pittandmoore.co.nz
DDI: 03 545 6706

Property tips for New Zealand home buyers

Written by Pitt & Moore Admin on . Posted in Commercial Property, Development & Leasing, Residential Property (Buying or Selling a House).

For many of us buying a residential property, particularly our first home, can be an impulsive and very much an emotion based decision. With that in mind, we have listed some tips that could help residential property buyers to avoid common pitfalls.

Sort out your financing early on

If applicable, contact your mortgage lender to ensure that you are able to obtain finance for any contemplated purchase. The sooner you do this the better. Many lenders are happy to give buyers pre-approvals.

If you are looking to purchase an investment property, explore and carefully consider any potential tax issues or implications.

Visit the property more than once

Request to arrange a second viewing with a real estate agent outside of the regular open home hours. This will give you a chance to have a good look around the property without other prospective buyers in the way. It is also a good idea to view the property during different times of the day. This can also give you an idea if any traffic outside the property will be of concern in terms of noise and/or privacy.

Always check for maintenance issues

Don’t be afraid to be upfront and ask the real estate agent about any known issues with the property. It is in your interests to ask as many questions as you can. Likewise, consider arranging a separate visit from a trusted and qualified builder to give you their opinion on the condition of the property. We recommend that your offer for purchase has a condition added to reflect obtaining a builder’s report.

From our experience, maintenance issues can result in significant costs. It is always best to check these out so that you don’t get any nasty surprises later on and know exactly what you are signing up for.

Do your research

If making an offer, make sure that your offer is conditional on getting a satisfactory valuation.

Contact an insurer or two to find out whether the property is insurable and to get an idea how much your premiums would be for the property you are interested in.

Call the local council to find out whether any significant works have been approved in the area as that may effect the value and/or live-ability of the property.

Check the property has had no issues recorded on the council’s records (e.g. flooding etc). Obtaining a Land Information Memorandum (LIM) from the council would cover these matters and we recommend this as it provides a more comprehensive review on the property and would provide for any known work that has been completed on it. Again, ensuring you have a condition inserted in your agreement is recommended when making an offer for purchase.

Tax matters

Discuss any sale or purchase you may be contemplating with your accountant or tax advisor. You should be aware of any tax implications before you sign a contract to sell or purchase as this could save you money and complications in the future.

Work out if the Overseas Investment Act applies

From 22 October 2018, anyone buying residential property in New Zealand will have to state whether they are eligible to buy under the Overseas Investment Act 2005. That is New Zealanders, Australians, Singaporeans, and overseas people – everybody.

An eligibility statement will need to be completed by the purchaser and provided to conveyancers, who must retain a copy for at least seven years. There are significant penalties for both for conveyancers who do not comply, and for purchasers who make false statements.

It will be important for purchasers to work out whether Overseas Investment Office consent is required at the early stages of a transaction. Obtaining expert advice in this field is highly recommended.

Get legal advice before you sign any agreement

Most importantly, get legal advice before you sign any agreement. It can be very difficult and costly to get out of even conditional agreements.

Talk to us

Contact our Property Team today to discuss how we can assist you.

Tips for buying a commercial property

Written by Pitt & Moore Admin on . Posted in Business Structuring, Advice & Commercial Contracts, Commercial Property, Development & Leasing.

If you’re thinking about buying a commercial property to house your own business, an investment to lease out or a combination of the two, there a number of considerations that may affect your final choice of property.

Whether it’s an office, light industrial unit, retail premises or a part of a larger complex there are some common considerations that apply to commercial properties. Here are some tips to help in your decision-making process.

1.   Structuring the purchase

The options include buying as an individual, as a partnership, through a company or a trust. Your accountant will likely be able to provide guidance on the best form of ownership structure for your individual circumstances. Your accountant and lawyer will also be able to discuss the GST implications of the purchase with you to ensure you are aware of your GST obligations.

2.   Properties that already have tenants

Include a careful review of the existing lease and any renewals or variations. Once the property is transferred to you, you step into the shoes of the outgoing landlord and become bound by the terms of the lease. It is therefore important that you understand and accept the terms of any leases, which are to continue beyond settlement. If you would prefer to buy a particular property without a tenant, you could try to negotiate the surrender of any existing leases. This is where you and the tenant mutually agree to terminate the lease. There is usually some financial compensation required to achieve this.

3.   Finance

As with a residential purchase, ensure that you talk to your bank before you enter into negotiations so you are clear on how much you can borrow and the terms of that borrowing. The process to obtain commercial bank lending is more complex than for residential lending and you should get the process underway as soon as possible to avoid any delays down the track. You should also ensure that the agreement for sale and purchase is signed subject to you obtaining finance, if finance isn’t unconditionally approved before the agreement is signed.

4.   LIM and Building Reports

Given the health and safety obligations on landlords, it is important that you arrange for a qualified person to complete a building inspection of the property as part of your investigations into the property. Your lawyer should also check the property title and a LIM Report for the property to ensure that the property is suitable for your intended use and that there are no underlying issues.

5.   Insurance

Make sure you know what you are in for in terms of premiums before you buy. Also make sure you check with your insurer around what types of insurance you will need e.g. public liability, contents etc. Check zoning around such physical issues such as projected flooding or land stability as well, as this will impact on what insurance you may require and potentially also on whether insurance is available.

6.   Unit titles

If the building or unit you’re buying is this form of ownership, you will become part of a body corporate, which will have its own set of rules and legal obligations, including levies.

7.   Get professional advice

These are just a few areas to consider before entering into the purchase process and the key advice is to get advice. It’s a lot more technical and complicated than buying residential property and purchasing mistakes can be costly, so sound legal advice is essential.

Contact our Commercial Team today to discuss how we can assist you.

Changes Coming for Unit Title Property

Written by Pitt & Moore Admin on . Posted in Commercial Property, Development & Leasing.

Townhouse and apartment living has become more prevalent in New Zealand in recent years, particularly in the larger cities of Auckland and Wellington, with multi-unit developments comprising 40 per cent of new builds in 2016. Growth in this area has put the existing legislation, which governs the ownership and management of Unit Titles, to the test.

The outcome of this has been growing discontent with some aspects of the existing legislation. The rules relating to Unit Titles are now under review and look likely to change in the near future.

The owner of a Unit Title owns part of a building, such as an apartment or unit, a share in the common areas of that building, such as lifts, lobbies or driveways, and an interest in the underlying land. The Unit Titles Act 2010 currently governs the ownership and management of Unit Titles.

In December last year, following receipt of a report prepared by property professionals, the Government released a discussion document around possible reforms aimed at protecting the growing number of apartment and townhouse owners.

The discussion document focuses on how the existing disclosure regime could be improved, how Body Corporate governance could be strengthened, the issues around maintenance planning and how access to the disputes resolution process could be improved.

The Ministry asked for feedback on how issues such as how Government agencies might better provide service for Unit Title holders, including asking if a new separate body needs to be set up to administer this. Importantly, the Ministry is also considering whether smaller complexes should be exempt from, or should be able to opt out of, compliance obligations under the Act.

The Government’s consultation process closed in early March and the Ministry of Business, Innovation and Employment will now review the submissions and develop proposals for Government approval, with the Government aiming to produce a draft Bill by August this year. The Government’s proposal to review the current Act has been welcomed by many and it is hoped that the reforms will bring the law up to date in an area of the property market where growth looks set to continue in the coming years.

Talk to us

Contact our Commercial Team today to discuss how we can assist you.

Leases – it’s all in the Wording

Written by Pitt & Moore Admin on . Posted in Commercial Property, Development & Leasing, Litigation and Dispute Resolution, Resource Management.

The importance of clear and explicit wording in your contractual arrangements has been confirmed by the recent quashing by the Supreme Court of the Court of Appeal’s judgment against Mobil Oil – Mobil Oil New Zealand Limited v Development Auckland Limited [2016] NZSC 89.

The Court of Appeal – disagreeing with the High Court – found that Mobil had to remediate the land that it had leased from the Auckland Harbour Board (and its successors) and that the natural and ordinary meaning of the words in the lease did mean that the remediation included the sub-soils which had been contaminated over many years prior by its use as a bulk storage of oil.

The lease agreements all contained a repair clause dealing with Mobil’s obligations to keep the land “in good order and clean and tidy” during the term and to deliver it in that condition on termination. The leases permitted the storage, handling and blending of petroleum products but prohibited any noisy or offensive trade or business and required Mobil to comply with all relevant regulatory requirements.

The question for the Court was whether delivery of the land at termination meant remediation of the contamination.

Factually, the key findings were that Mobil’s predecessors had occupied the site since the 1920’s and that the parties knew the land was contaminated from the 1970’s. The relevant leases were entered into between the parties in 1985. At the time the tenancies came to an end in 2011, remediation work costing between $10-50 million (depending on who was doing the work) was required.

Development Auckland said Mobil was to foot the bill under the terms of the lease. Mobil said that the terms of the lease did not require it to foot the bill.

The High Court found in Mobil’s favour and found that having regard to the land’s contamination in the 70’s one would have expected any remediation from contamination to be explicitly addressed in the lease rather than left for inference from the general wording of the clean and tidy clauses.

The Court of Appeal disagreed. It reviewed, at some length, the law of waste, and took the view that permission to use the site for oil storage did not amount to authorisation of incidental contamination. It was of the view that there had been a breach of the covenant not to injure the lessor. The Court saw the clean and tidy obligation as naturally extending to the subsurface and it saw Mobil as coming to the negotiating table in 1985 with an actual or potential liability for its prior contamination. The Court traversed all the correspondence between the parties leading up to the execution of the 1985 leases in order to get to that point and the majority found that all the contamination – not just the contamination caused post-1985 should be remediated by Mobil.

Mobil appealed and were successful. Amongst other things the Supreme Court considered it important that there were multiple causes of the contamination; that contamination was an incident of the permitted use of bulk oil storage; and that there was no claim by Auckland Harbour Board for Mobil to remediate the land when it was surrendered to it in 1985; as relevant. The Supreme Court favoured the High Court’s assessment of the contractual terms and emphasised that the word “keep” in keep tidy, is future looking and not a word which is apt to signify an obligation to effect transformative change (such as extensive and expensive remediation). The Supreme Court rejected that the clean and tidy clause meant that Mobil would be liable for any contamination and also rejected the suggestion that a term be implied into the contract which would require Mobil to prevent contamination – such a term was not necessary to give business efficacy and did not “go without saying”.

In short, be very clear from the outset what each party’s obligations and rights are to be – particularly having regard to the nature of the use of the premises – and ensure they are clearly spelt out in the agreement. In this case, after years of legal flip-flops, Auckland now has to wear the costs of site remediation which would arguably take away any profit to it after all the years of leasing it plus pay costs to Mobil – the ratepayers will not be happy!

Talk to us

Contact our Litigation & Dispute Resolution Team today to discuss how we can assist you.

Nelson

78 Selwyn Place
Nelson 7010
Phone: +64 3 548 8349
Fax: 03 546 9153
Email: mail@pittandmoore.co.nz

Postal address
PO Box 42, Nelson 7040
DX WC70013

Richmond

66 Oxford Street
Richmond 7020
Phone: +64 3 543 9090
Fax: 03 546 9153
Email: mail@pittandmoore.co.nz

Postal address
PO Box 42, Nelson 7040
DX WC70013

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