Newsletter Autumn 2016 2017-05-19T12:17:26+00:00

 ARL News

ARL Lawyers ScholarshipDux HVHS Scholarship

ARL Lawyers are delighted to announce that Sofija Cvitanovich was the Hutt Valley High School Year 13 recipient of the ARL Lawyers Scholarship. Sofija will study Law at Otago University in 2016.

Sofija achieved to a high level academically throughout her time at Hutt Valley High School, completing her final year as Dux. Sofija was also involved in numerous extra-curricular activities and tutored maths to intermediate-aged children in her neighbourhood.

Her drive and involvement in her school community, along with her academic results, made Sofija an excellent candidate for our scholarship.

The partners at ARL Lawyers wish Sofija all the best in her future studies.

We welcome Vicki Matias to our Property Law Team 

Vicki MataisVicki Matias (BDes, LLB, GDipCom) has joined our Property Law Team.

Vicki is from Wellington but has a strong Greek heritage. She attended Queen Margaret College and then went on to Massey University to study design.  Following a number of years in the design industry, the desire to continue her education saw her back at University where she gained a Law Degree and a Graduate Diploma in Commerce, graduating in 2015.

A talented young lady, Vicki can speak Greek, French and a smattering of Italian. She is actively involved in the Wellington Greek community and volunteers at Community Law Wellington on the refugee and migrant team.

 

The Health and Safety at Work Act 2015 – In force from 4 April 2016

Health and Safety graphicIn New Zealand, more than one in ten workers claim for a workplace injury each year. To address this, the new Health and Safety at Work Act 2015 (the Act) aims to make New Zealand’s workplaces safer, part of wide Health and Safety reforms ultimately hoping to reduce the workplace injury and death toll by 25 percent by 2020.

What does it mean for workers?

The term ‘worker’ is defined widely. It includes, but is not limited to, employees, contractors and sub-contractors and their employees, labour hire company employees who have been assigned, students and volunteers.

Two key features affect workers:

1.Provisions in the Act protect workers against discrimination and negative actions if they feel the need to raise a health and safety concern.
2.The Act supports more effective engagement and participation with workers. This begins with consultations surrounding policies and extends to practical, company-wide obligations for every worker to abide by regulations and take reasonable care while in the workplace.

What does it mean for business owners?

The Act introduces the term ‘person conducting a business or undertaking’ (PCBU). This is another wide term which is intended to apply to a broad range of business arrangements.

Some key obligations of the PCBU are:

  1. To take ‘reasonably practicable’ steps to ensure the health and safety of workers. These steps include ensuring that risks are minimised throughout the business. This includes the workplace itself, its fixtures, materials, workers and tasks.
  2. To support and encourage worker participation in all aspects of the health and safety policies and their enforcement and – if requested by employees – appoint and train safety representatives. The obligations surrounding representatives will vary based on the size and nature of the business.

There will be a growing focus on enforcement, along with increased penalties for non-compliance. Any insurance that a company may hold against fines will also have no effect. No businesses, regardless of their size or level of risk, are exempt from the obligations in the Act.

What does it mean for Officers of PCBU’s?

An Officer includes but is not limited to directors of a company, partners of a partnership, and any person who is in a position to exercise significant influence over the management of the business.

Officers will now be personally liable for failing to exercise due diligence in ensuring that the business is complying with health and safety regulations even if they were not directly involved in making the decision which contravenes the Act.

Interestingly, Peter Jackson recently resigned as Director of Weta Workshop, apparently due to the level of director involvement that this new Act will encourage. The increased level of personal liability is daunting for those directors who do not, or cannot take a hands-on approach.

When do the changes come into force?

This Act takes effect on the 4th of April 2016. Work Safe New Zealand will provide information on the new legislation to businesses in an attempt to make the transition as seamless as possible.  Call us on 04 5666 777  or email office@arl-lawyers.co.nz  for advice on how these changes will affect your business. We can help you work your way through all your obligations.

 

The Residential Tenancies Amendment Bill – A look at the changes for landlords and tenants

The Residential Tenancies Amendment Bill was introduced to Parliament on 3 December 2015. With it came a number of interesting proposed changes to the Residential Tenancies Act 1986. Two of the main aims of the Bill are to improve the safety of residential rental properties by requiring smoke alarms and insulation in all residential rental properties and to make the process around abandoned rental properties more efficient.

Smoke alarms and insulation requirements

smoke alarmThe proposed Bill would require a landlord to ensure that their residential rental property has working smoke alarms while making the tenant responsible for changing the alarm batteries and notifying the landlord of any faulty alarms.
The proposed Bill would also require underfloor and ceiling insulation. The requirement for insulation splits residential rental properties into two categories—income-related rent tenancies and all other tenancies. An income-related rent tenancy generally refers to a property where the rent is based on the tenant’s income under the Housing Restructuring and Tenancy Matters Act 1992 but excludes boarding houses. For these income-related rent tenancies, insulation is required from 1 July 2016, while all other rental properties require insulation from 1 July 2019.

Under the proposed amendments a landlord is also required to provide information about the insulation of the premises in the tenancy agreement for the property. This will include if there is insulation and if so, the details of that insulation. The Bill proposes that a landlord commits an unlawful act if this information is omitted from the tenancy agreement or if the landlord knows the information is false or misleading.

Overall, the aim of these two requirements is to ensure the health and safety of the occupiers of a residential rental property without imposing excessive costs on a landlord.

The process around abandoned rental properties

A rental property is an ‘abandoned rental property’ if the tenant is in arrears and has left the property with no obvious intention of returning to it.

The current process under the Residential Tenancies Act 1986 for abandoned rental property cases can take up to six weeks. The Bill proposes a process which will take ten working days after an application is filed with the Tenancy Tribunal. Reducing the time to confirm abandonment of a tenancy will enable a landlord to re-tenant their property, which reduces the loss of rental income.

The Bill also proposes giving a landlord the right to enter the rental premises where the rent is at least 14 days in arrears and where the landlord has reasonable cause to believe that the tenant has abandoned the property. The Bill also proposes that a landlord may enter the premises to confirm abandonment if notice has been given to the tenant no less than 24 hours prior to entry.

The Social Services Committee report on the Bill is due on 8 June 2016 and will take into account public submissions about the proposed changes.

 How well do you know your lease?

The majority of lease arrangements are entered into using the Deed of Lease provided by the Auckland District Law Society. Whether you are a business owner and tenant, or a landlord, it is important that you understand your rights and obligations. How well do you know your lease?

Tenants’ right to quiet enjoyment

As a tenant, you will typically hold a right to quiet use and enjoyment of the property. Contrary to the wording, this right does not mean you can pursue the landlord for noisy neighbours. What it means is that the landlord will not interfere with your possession and use of the property. If the landlord were to breach this term, this could give rise to a claim for damages or you could apply for an injunction to stop the interference.

Tenants’ maintenance obligations

Tenants are often responsible for the maintenance and care of the property. Some of the responsibilities that you may not be aware of include:

  • Replace and repair of glass breakages
  • Re-paint and re-decorate the premises when reasonably required (some landlords will often require this near the end of the lease)
  • Replace all worn or damaged floor coverings (carpet) with ones of equal or better quality
  • Maintain any garden and lawn areas to a tidy and cared for condition
  • Make minor repairs to the roof where necessary

Liability on assignment of your lease

Sale and Purchase agreementThere are a number of different reasons that tenants assign their leases, for example, on the sale of a business. An important part of selling your business is ensuring that it is attractive as possible to a potential purchaser. This means making sure that a new tenant can continue to stay in the business premises long term, either by way of a long lease or by providing several rights of renewal. However, what many people do not realise is that the original tenant’s liability does not necessarily end when they assign the lease (and become an ‘assignor’) to a new tenant.

If you enter into a lease you will typically still be liable for the full current term of that lease regardless of whether you assign to a new tenant. If the new tenant breaches any of the conditions of the lease, you could still be liable for that breach. For example, if the new tenant fails to pay rent, the landlord can often pursue you for the loss since after assignment of the lease you can still retain your original contractual obligation to the landlord.

When liability ends

Your liability as assignor will typically end at the expiry of the current lease term, which is in place at the time of assignment. If the purchaser exercises a right to renew after that term has expired, this would effectively be a new lease and you will not be liable for a breach by the new tenant during the new term.

You can limit your risk when assigning your lease by asking the landlord to agree to limit your liability (although they do not have to agree). You could also require the new tenant to provide you with an indemnity. However, this does not prevent the landlord recovering from you for any breach of the lease in the first instance.

Updated agreement for sale and purchase of real estate

Recent changes to the widely used Agreement for Sale and Purchase of Real Estate prepared by the Auckland District Law Society and the Real Estate Institute of New Zealand include:

  • When selling an apartment or other Unit Title property, the vendor warrants (promises) that the information provided in the pre-contract disclosure statement is correct.
  • The vendor also warrants that all plant, equipment, systems or devices which provide any services or amenities to the property (such as security, heating, cooling, or air conditioning) will be delivered to the purchaser in reasonable working order.
  • A breach of warranty can already give rise to compensation. The agreement now clarifies that a claim for compensation must be made on or before the last working day before settlement.
  • The definition of a working day has been extended to allow an additional 10 days for a purchaser to approve a Land Information Memorandum (LIM) if the LIM condition would otherwise have fallen due over the Christmas/New Year period.

Buying a vehicle – is there money owing?

If you are in the process of purchasing a vehicle privately, it is important to check that there is no money owing on it.  This can be done by conducting a search of the Personal Property Securities Register (PPSR), preferably on the day you are going to pay for the car. The PPSR will confirm whether a ‘security interest’ is registered against the vehicle.

If there is a security interest registered, another person or company could seize your vehicle to pay off any debt relating to that security interest. Even if this debt was incurred by a previous owner, you could still lose your vehicle if the previous owner has failed to repay the debt in full before selling to you.
If there is money owing on the vehicle, the PPSR will record the details of the creditor and you should ensure the debt is cleared before you buy. That way you can be sure you are buying your vehicle outright.