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Negotiating the terms of a commercial lease with your tenant can be a lengthy process. To avoid issues down the line, you should record these negotiations in writing with Land Information New Zealand (LINZ). The documents outlining your negotiations become commercial lease records. This article will outline commercial lease records and explore whether they constitute a public record in New Zealand.

What is a Commercial Lease? 

Whether short- or long-term, a commercial lease is a legal document containing clauses you agree upon with your tenant. Generally, if a lease lasts for one year or less, it is a short-term lease. Furthermore, if you want the lease to be legally enforceable regardless of its duration, you should ensure it is in writing and both parties sign it. 

You can agree to a short-term lease orally under the Property Law Act. However, you should ensure you record long-term leases in writing.

The Property Law Act governs commercial leases in New Zealand. This law outlines the critical elements of a lease, which are:

  • the duration of the lease should be clear and specific;
  • the lease must specifically outline the premises;
  • the tenant’s right of exclusive possession of the property (the tenant should have the right to exclude others from their property); and
  • the lease must follow the structure of a legal contract.

When preparing your lease, it is crucial to agree on specific matters with your tenant. Ultimately, your lease should outline issues such as: 

  • the landlord’s right to enter the property for inspections and repairs;
  • rights for renewal;
  • description of premises;
  • parking rights for tenants;
  • ability to cancel the lease due to breach of terms or failure to pay rent;
  • tenant’s right to exclude others from the property; and
  • lease term (how long the lease will last).

Agreement to Lease

An agreement to lease is a legal document that records the offer and acceptance process. It contains the essential information which you and your tenant will agree upon. An agreement to lease allows you to create a commercial lease informally. However, it can still be legally binding if it has the elements of an enforceable contract, such as:

  • an offer to lease that the tenant accepts (they must indicate acceptance through a signature);
  • an exchange of value between you and the tenant;
  • essential terms; and
  • clear intention from you and the tenant to enter into a binding legal relationship.

Deed of Lease

Once both parties sign the agreement to lease, you can start drafting and signing a deed of lease. A solicitor will usually prepare a formal deed of lease which establishes the tenant with an estate. The form you can fill out or modify is the Auckland District Law Society Lease (ADLS Lease). A legally binding deed of lease must:

  • be in writing;
  • include the signatures of both you and your tenant; and 
  • have someone not a party to the deed witness the signatures and deliver the deed.

Recording The Commercial Lease

In New Zealand, LINZ is responsible for recording land title information and determining who owns what private properties. Further, the Land Transfer Act govern the registration process for land ownership in New Zealand. Additionally, it is not compulsory to register the property title and interests with the Land Registry. Although, it will likely be beneficial for you as it will be easier to prove your land ownership and the rights and restrictions that apply to the property, such as the tenant’s interest. 

A legal interest in property means the tenant has the right to possess or use the property. You are still the property owner because you can sell or transfer the rights to the property to someone else if you wish.

You can record or update the lease and property title through LINZ’s registration system. This will update which parties have some involvement with the title of your property. You can either submit your documents online or manually through the post. Furthermore, to record your lease, you will need to:

  • prepare the relevant instruments or documents with LINZ (instruments are necessary to record a lease under the Land Transfer Act);
  • sign the authority and instruction form with the tenant so a solicitor can lodge the dealing with LINZ on your behalf;
  • sign a claimant consent alongside your tenant to create their interest in the land (this allows the solicitor to obtain consent from both parties for the registration);
  • certify and sign instruments; and
  • submit the dealing.

Are Commercial Lease Records Public?

Once you register and record the commercial lease with LINZ, it will be publicly available for anyone who wants to know who owns your property. Additionally, people can order a copy of a title to confirm who owns the land and property if they wish. 

However, the commercial lease itself is a private document. Therefore, it will not be available to the public if you do not register it with LINZ. Although, by not registering the lease with LINZ, you may face potential issues regarding the legal ownership of the property if the lease is unclear. 

Key Takeaways

A commercial lease outlines the terms that you and your tenant agree upon. Often, you can split the lease into an agreement to lease and a deed of lease. Further, you can register your commercial lease with LINZ so that legal ownership and interests in your property can be straightforward for future scenarios. However, the records will be available to the public if you do so. 

If you need legal advice, you can contact our experienced commercial leasing lawyers, who can assist as part of our LegalVision membership. You will have unlimited access to lawyers who can answer your questions and draft and review your documents for a low monthly fee. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

How can I record a commercial lease?

You can record your commercial lease by registering it with LINZ. You will need to submit the relevant instruments, an authorization form, and a consent form to update the title of your property. By recording the commercial lease, you will inform LINZ that the tenant has a legal interest in your land. However, you will still hold ownership rights of the property. 

Is a commercial lease record public?

A commercial lease will be public if you register it with LINZ. It is not compulsory to register, although it is beneficial. Without registering the commercial lease with LINZ, the lease will remain confidential to you and the tenant.

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