LEASE UPDATES 2025: KEY CHANGES TO THE LAW ASSOCIATION DEED OF LEASE

Posted by Nadia Ng in News

The Law Association (formerly Auckland District Law Society) has released the seventh edition of its standard form Deed of Lease, marking the first major update since 2012. The new version reflects changes in the commercial leasing market, economic shifts, and legal developments following COVID-19.

Both landlords and tenants should be aware of the updates, new additions, and edits. The changes seek to introduce greater clarity and new protections for both parties. Below are some of the key changes you need to know.

Rent reviews – more flexibility and certainty

The new form of lease includes standard ratchet clauses and offers more options for the parties to choose from. These include:

• Hard ratchet – rent cannot decrease throughout the lease term (including any renewal).
• Soft ratchet – rent cannot fall below the starting rent at the beginning of the lease.
• Semi-soft ratchet – rent cannot fall below the starting rent of the immediately preceding lease term.
• Fixed rent adjustments – rent increases by a predetermined percentage or amount.

These changes reflect what has become standard market practice, as landlords have responded to tenant demands for more certainty in the recent high inflation environment.  

Outgoings

• Landlords must provide tenants an outgoings budget for the upcoming financial year.
• However, landlords no longer need to supply details of the previous year’s actual costs unless the tenant specifically requests them.
• The definition of management expenses has been updated. Tenants are now only responsible for reasonable administrative expenses related to the lease.

Tenant’s fixtures, fittings, and chattels

• The lease clarifies that a tenant’s fixtures, fittings, and chattels are not part of the premises.
• This means tenants do not have to maintain or repair these items under clause eight.
• The tenant’s specified items will not be considered when assessing the market rent at review i.e. tenant’s improvements will not be considered when setting the market rent.

Car parks and floorplans

A new eighth schedule has been introduced. This allows landlords and tenants to attach floorplans of the premises, and any car parking spaces. 

Insurance

Tenants must not do anything that could void the policy or increase premiums. If they do, it will be a breach of the lease, and the tenant must cover any extra costs incurred.

Security

The new form of lease introduces wording for the provision of security. Many landlords require the tenant to provide security as protection if the tenant fails to meet their obligations under the lease. Standard wording is provided for a range of security options, including bank guarantees and/or rental bond. The lease includes optional wording in a standardised form.

Health and Safety

The form of lease now includes updated provisions to address the Health and Safety at Work Act 2015 (HSWA).

There are now explicit obligations on both parties to:

• do “all things reasonably necessary” to comply with the HSWA and any related approved codes of practice, standards or guidelines, and
• consult, cooperate and coordinate with each other in relation to health and safety matters (so far as is reasonably practicable), including informing each other of any notifiable event under the HSWA. 

Both parties are encouraged to work together to keep the premises safe.

Why these changes matter

These updates modernise the Deed of Lease, introducing greater transparency, fairness, and certainty for both landlords and tenants.

Leases are legally binding contracts, and these changes could significantly impact your rights and obligations. If you require advice on how these updates apply to you, contact us today—we’re here to help you navigate these changes and protect your interests.

Nadia Ng | Solicitor | nadia.ng@shieffangland.co.nz