W11, L1

Workshop Logistics and Client Counseling Simulations

  • Workshop Schedules and Flexibility
    • The current workshop period focuses on Landlord and Tenant law.
    • Students are required to attend their allocated workshop times due to limited room capacities. However, if a student is unable to attend (e.g., due to illness), they must message the instructor to arrange an alternative session.
  • The Workshop Scenario Design
    • The scenarios presented in tutorials/workshops are intentionally written to be more vague than traditional exam or test questions.
    • Purpose of Vagueness: The exercise is designed to simulate a client interview. In real-world practice, clients often provide a "shotgun" of information—some relevant, some irrelevant, and much of it incomplete.
    • Analytical Task: Students must identify gaps in the information provided and determine what specific details would be necessary to advise the client, while still making determinations based on the facts currently available.

Review Sessions and Course Timeline

  • Upcoming Review Sessions
    • Review sessions are scheduled for next week, occurring in either the Thursday or Friday lecture slot.
    • If student demand is high (determined by a vote), the instructor is available to conduct two review sessions.
  • Course Progress
    • The term is in Week 5, nearing the end of the semester. Lectures will conclude by the end of next week.

Fundamental Rights and Obligations: Quiet Enjoyment

  • Concept Overview
    • Rights and obligations are "two sides of the same coin": the rights of the lessee represent the obligations of the lessor, and vice-versa.
  • The Right to Quiet Enjoyment
    • This is the primary right enjoyed by a lessee. It is not merely about physical peace or serenity.
    • Definition: Securing the lessee against interruption in their possession of the property.
    • Broad Interpretation: Possession is viewed through a wide lens, encompassing not just physical presence but freedom from interference (e.g., detailed or invasive supervision by the lessor).
  • Case Study: Norden v Blueport Enterprises Ltd
    • This case illustrated the expansion of quiet enjoyment in New Zealand law.
    • It involved two distinct types of lessees under one lessor (the case involved a brothel operating near another business).
    • Legal Principle: A lessor can be held responsible for a breach of quiet enjoyment if they are aware of problematic behavior by one tenant that impedes the rights of another, provided the lessor has sufficient control over the situation. This expands liability to include the actions of other lessees or third parties.

Non-Derogation from Grant

  • Definition
    • Non-derogation from grant means the lessor must not prejudice the successful fulfillment of the purpose for which the lease was granted.
  • Overlap with Quiet Enjoyment
    • While similar to quiet enjoyment, non-derogation focuses specifically on the intended purpose of the lease.
  • Case Study: Mount Cook National Park Board v Mount Cook Motels Ltd
    • The Board acted as both the lessor of the land and the licensor for the business operation within the national park. The lease was contingent upon holding the license.
    • The Board significantly increased the license cost in subsequent years, making it financially impossible for the motel to operate.
    • Court Finding: This constituted a derogation from grant. By making the license unaffordable, the Board effectively prevented the fulfillment of the lease's purpose (operating a motel).
  • Distinguishing Factors
    • Physical Interference Not Required: Unlike many quiet enjoyment claims, non-derogation does not require physical entry or interference with title. In Mount Cook, the interference was purely financial/administrative (manipulating numbers).
    • Fact and Degree: Whether an action constitutes derogation depends heavily on the specific circumstances and the severity of the behavior.

Suitability of Premises and Statutory Differences

  • General Principle for Non-Residential Leases
    • There is no general implied principle or contractual term that premises must be suitable for the specific purpose for which they are leased.
    • Responsibility: It is the lessee's responsibility to ensure the land meets their needs. For example, if a lessee rents a farm to host a music festival, they are responsible for obtaining resource consents and ensuring zoning compliance; the lessor has no obligation to provide a property "fit for a festival."
  • The Residential Distinction
    • Residential Tenancy Act (RTA): Unlike commercial/non-residential leases, residential properties have statutory habitability requirements. In New Zealand, this includes the Healthy Home Standards (covering insulation, heating, and smoke alarms).

Obligations of the Lessee

  • 1. Obligation to Pay Rent
    • While rent is not an essential element of a lease (a lease can be gratuitous), if a lease includes rent provisions, the lessee is legally obligated to pay.
    • This includes adhering to the specified amount, period, frequency, and method (e.g., bank transfer or cash).
    • This is codified in the Property Law Act (PLA) and was previously implied at common law.
  • 2. Tenant-Like Manner
    • Case Reference: Warren v Keene.
    • This is a common law obligation requiring the tenant to perform "little jobs" a reasonable tenant would do to prevent damage (e.g., cleaning gutters, changing light bulbs).
    • The lessee must not damage the property willfully or negligently and is responsible for repairs if their family or guests cause damage.
    • Difference from Repairing Covenant: A repairing covenant is a more substantial obligation to keep premises in a specific good condition, whereas “tenant-like manner” is about basic maintenance and non-negligence.
  • 3. Yielding Up Possession
    • When the lease is determined (ends), the lessee must provide vacant possession.
    • Requirements: Remove all personal property and return all access devices (keys, garage openers, key cards).
    • Damages: Failure to yield up possession can result in the lessor recovering damages for loss of prospective rent.
  • 4. The Doctrine of Waste
    • Waste is a tort-based claim codified in the PLA for non-residential leases. It involves acts going beyond the “reasonable use” of land that decrease the property's value.
    • Voluntary Waste: Positive acts of the tenant that alter the land, such as cutting down timber or knocking down interior walls. This requires the lessor to spend money to "put it right" at the end of the term.
    • Permissive Waste: Omissions or failures to act, such as allowing a roof leak to persist until the structure collapses.

Statutory Implied Covenants and Powers (Property Law Act)

  • Implied Covenants for Non-Residential Leases
    • Under the PLA, certain covenants are implied in all leases unless expressly excluded:
      • Lessor Obligations: Non-derogation from grant and quiet enjoyment.
      • Lessee Obligations: Pay rent; no alterations without consent (consent not to be unreasonably withheld); no nuisance or waste; keep and yield up premises in existing condition; use premises reasonably.
  • Lessor's Statutory Powers
    • Power of Entry: The lessor may enter the premises at "all reasonable times" to inspect, repair, or ensure regulatory compliance. They must not unreasonably interfere with the lessee’s use.
    • Power of Cancellation: The lessor may cancel the lease if rent remains unpaid for 1515 working days, or if a breach remains unremedied for the same duration. This acts as a "self-help" remedy.
  • Lessee's Statutory Powers
    • Termination: The lessee can terminate the lease if the premises become unusable for the purposes specified in the lease (expressly or by implication).

Express Covenants and Freedom of Contract

  • Contracting Out
    • In non-residential leases, express covenants in a contract can negative, vary, or extend statutory implied covenants. This reflects the principle of Freedom of Contract.
  • Rationale for Difference Between Commercial and Residential
    • Commercial: Merchants are presumed to have equal bargaining power. If they agree to terms, even if they deviate from the PLA, the law generally respects that agreement.
    • Residential: The RTA protects tenants who typically have less bargaining power. Residential tenants rely on the property for the human right to shelter; therefore, certain statutory protections cannot be contracted out of (e.g., a landlord cannot contract out of the duty to provide heating).

Specifics of Rental Covenants

  • Rent as Consideration
    • Rent does not require monetary payment; it can be goods or services (e.g., a Rolex watch or performance of services).
    • Rent does not need to reflect market value; "peppercorn rent" (e.g., 11 dollar per year) is valid.
  • Accrual and Certainty
    • Accrual: Under the PLA, the default is that rent accrues "day by day," but parties usually negotiate monthly or weekly periods.
    • Certainty: The amount must be certain. Variations (rent increases) must be specified in the lease; otherwise, they require a new agreement between parties.
  • Liability
    • Joint Liability: If one co-lessee is released, all are released.
    • Joint and Several Liability: Releasing one co-lessee does not release the others from their obligation to pay the full rent.