Commercial Property Newsletter - October 2017 Our commercial property experts; (front row) Stephen Brent, Janine Ballinger, Emma Turner, Ann Maria Buckley, Emily Nind and Lauren Jerard. (back row) Mike Parker, David Fitchett, Elliot Scott, Jeroen Vink and Tim Stevens. An update on the Land Transfer Act 1952 Written by Emily Nind - Senior Associate(Property) We recently attended an update from Robbie Muir, Registrar-General, Land Information New Zealand. While there were many other updates that will affect our practice, one of his focusses was the update to the Land Transfer Act 1952. The Law Commission completed a report in 2010 on a number of provisions to modernise the 1952 Act and the updated Act received assent through Parliament in July of this year. The new Act is expected to come into force in November 2018. We summarise a few of the updates we see being beneficial to our clients: Covenants in gross One of the updates we see as an improvement is the ability for developers (in particular) to note covenants in gross on the title to properties (by way of an update to the Property Law Act 2007). At present land covenants are recorded on property titles as easement instruments, where the instrument creating the easement grants a right over another person’s land given to a land owner which is additional to their basic property rights. Standard easements identify the land having the benefit of the easement and the land subject to the easement. A covenant is an obligation contained in a deed, and these are recorded so that the obligations bind present owners of land as well as subsequent owners. The obligations can be positive (in that they require the landowner to do a certain thing) or restrictive (where they require the landowner not to do certain things). In terms of easements, you are also able to record an easement in gross which allows for a benefit to be held by a person or corporate entity rather than attaching to land. However, land covenants can only be recorded, under the 1952 Act, where they benefit land. This can raise issues where an obligation is owed to party that does not retain any land…For example, a developer, an individual or a corporation who does not own land in the vicinity. While this may not appear to be a problem that requires fixing, currently what has been a common practice is securing these “covenants in gross” via a registered encumbrance. For example, a developer requires land owners in a development to be members of a club which imposes certain conditions or obligations is secured by a registered encumbrance where if you do not comply you are charged an annual rent charge as a penalty for not complying. An encumbrance is recognised as a charge over the land (like a mortgage) and wasn’t really intended to secure this sort of obligation. The use of encumbrances has resulted in a lack of clarity as to the encumbrance mechanism and what it is used for. Going forward these obligations will be able to be recorded on the title as a land covenant as they relate to the use of the land even where the obligation is owed to someone who does not retain ownership of any land. Compensation Another update we see benefitting the landowner is to the compensation regime under the 1952 Act. The grounds for compensation (fraud and error on the land register) remain unchanged but how compensation is calculated has been updated. Currently, compensation is on the value at the date of the loss to the landowner (which can be some time before compensation is payable). Under the new Act compensation can be valued at the date the loss is discovered or should’ve been reasonably discovered by the landowner. There will be discretion to reduce the amount of compensation where a landowner has not taken care but in general this should be fairer for land owners requiring compensation under this regime. Privacy The land register in New Zealand is a public record and as a result it can be quite simple to find where people live or own property. Under the new Act, the Registrar-General will have more power to withhold ownership information in the interests of personal safety. There is already a power to do so under the Domestic Violence Act 1995 but this will extend the powers to other circumstances where this may be in the landowner’s interest. We would expect there would need to be a very good reason for the Registrar-General to use this power. Should you require any further information about the updates to the Land Transfer Act 1952 please contact us to discuss. The breakdown - behind the scenes of a major sporting event Written by Emma Turner - Associate (Property) As with any commercial enterprise, major sporting events involve a number of important commercial relationships and require agreements to be put in place in order to operate successfully while minimising risks for those organising and participating in the event. This article touches briefly on some of the key legal commercial considerations an event organiser will need to turn their mind to. This is a non-exhaustive list. Sanctioned Events / Promoter Agreement While some sporting events stand alone, most will be a part of a wider competition, series or tour and/or will be sanctioned by the national or international governing body of their relevant sport. By way of example, the Australian Open is one of the ATP Tour’s grand slam events and there will be a sanction/promoter agreement in place between the organiser of the Australian Open and the Association of Tennis Professionals governing the terms of that relationship. An event sanctioned by the sport’s relevant federation or other governing body gives the event immediate legitimacy. The New Zealand Rally is fighting hard to regain the sanctioned status that it previously enjoyed in 2012 as a round of the FIA World Rally Championship (WRC). Their campaign to be a round on the WRC in 2018, and now 2019 illustrates the significance that the affiliation and global exposure of the WRC as a whole has to the NZ event. Meet two members of our commercial property team:
Emily Nind - Senior Associate Emily has experience in a wide range of property matters including the sale and purchase of residential and commercial property, subdivisions and general matters arising from the Canterbury earthquakes. A current focus is on subdivision in all forms and Emily has recently acted for developers completing residential subdivisions, Unit Title developments and for clients wishing to freehold existing cross-lease properties. Jeroen Vink - Associate Jeroen is a member of the Property Team and acts on a broad range of property matters. His specialist areas of practice include construction and property development, the sale and purchase of commercial and industrial property, leasing (acting for both landlord and tenant), property financing and residential property. Jeroen’s clients appreciate his straightforward manner, accessibility and dedication to every matter. He is committed to achieving practical and effective results for his clients. |