Before You Sign – What to Know About Assigning a Commercial Lease

Significant reforms to New Zealand’s overseas investment regime came into force on 6 March 2026, marking a shift toward a more streamlined, risk‑based approach to overseas investment. The changes are intended to reduce processing times for low‑risk investments, while retaining appropriate scrutiny of transactions that may affect New Zealand’s national interest. Key changes include a revised purpose statement, a new national interest test and consent pathways, and a new ability for certain investor visa holders to purchase high‑value (>$5m) residential property. Revised purpose statement The purpose of the Overseas Investment Act 2005 has been updated to more clearly recognise the role overseas investment can play in increasing economic opportunity in New Zealand, while reaffirming that overseas ownership or control of sensitive New Zealand assets remains a privilege rather than a right. This change signals a more facilitative policy stance, particularly for lower‑risk investments, without reducing the Government’s ability to manage risks to New Zealand’s national interest. $5 million‑plus house pathway for qualifying investor visa holders From 6 March 2026, holders of certain investor‑class residence visas may apply for Overseas Investment Office (OIO) consent to buy or build a single residential property in New Zealand valued at $5 million or more. This pathway is available to holders of: Active Investor Plus visas Investor 1 visas  Investor 2 visas Key features of the pathway include: OIO consent must be obtained before acquiring the property (or the agreement must be conditional on consent). The pathway can only be relied on to acquire one residential property. Eligible visa holders can only purchase land that is categorised as ‘residential’ or ‘lifestyle’ under the district valuation roll, and not ‘sensitive’ for any other reason. This would exclude, for example, rural lifestyle blocks over 5 hectares, residential land on certain islands, or residential land adjoining the foreshore. The Overseas Investment Act does not restrict how the house is used, and it may be lived in, used as a holiday home, or used for business purposes. The property may be purchased through a company or a trust, but there are limits on who can hold ownership or control interests. Applications will be assessed under a streamlined process, and LINZ aims to assess most low‑risk applications within 5 working days. Application fees are inexpensive, currently ranging from $2,040 to $3,500 (depending on whether you buy existing or build new). This change represents a targeted easing of the foreign buyer restrictions for investors who commit significant capital to New Zealand. Primary consent pathway and the new three‑stage national interest process A central feature of the reforms is the introduction of a single national interest test, replacing the previous combination of the ‘benefit to New Zealand’, ‘investor’, and national interest tests for most overseas investments. Most applications will now proceed under the Primary Consent Pathway, which applies to significant business assets and most categories of sensitive land (excluding residential land and farmland). The new process operates as a three‑stage, risk‑based assessment: Risk identification stage: the OIO assesses whether the investment gives rise to national interest risks. If no risks are identified, consent will be granted at this stage. The statutory timeframe for decisions under this stage is 15 working days, but the OIO has indicated it aims to assess most low‑risk applications in around 5 working days in practice. Risk assessment stage: if risks are identified, a more detailed assessment is undertaken and consent may be granted with conditions. If the OIO have reasonable grounds to consider that a transaction may be contrary to New Zealand’s national interest, it will refer the application to the Minister of Finance for a decision. Where this stage applies, the timeframe for review increases by 55 working days. Under the current Ministerial Directive Letter, the OIO is expected to complete 80% of applications within half this time. Ministerial decision stage: only the Minister may decline consent, and only where the Minister considers the transaction is contrary to New Zealand’s national interest. The Minister may exercise judgment in this regard but must consider certain factors. The Minister may impose conditions on any consent granted at this stage. There is no fixed statutory timeframe for a Ministerial decision. The current fee for primary consent application is $22,800 for stage one assessment. If the application requires a national interest assessment a further fee of $83,700 applies. Other changes In addition to the headline reforms: New and amended consent pathways have been introduced for different asset types, including a dedicated production forestry pathway. The Overseas Investment Amendment Regulations 2026 support the new regime by defining qualifying investor visas, updating application categories, and making technical amendments to administrative and forestry‑related provisions. A new Ministerial Directive Letter confirms that the OIO must take a risk‑based, proportionate approach, focusing regulatory effort on higher‑risk transactions and aiming for much shorter timeframes than those prescribed for the majority of applications. Important reminders for investors and developers Agreements for sale and purchase involving overseas persons must be expressly conditional on obtaining OIO consent. A general due diligence condition is not sufficient to protect the purchaser and may expose the purchaser to enforcement action or penalties. While statutory timeframes have been reduced and processing is expected to be faster for low‑risk investments, this assumes that applications are complete, accurate, and well‑supported. Incomplete or poorly prepared applications risk rejection, requests for further information, or delays that can undermine transaction timelines. Investors should take legal advice before signing an agreement, submitting a tender or bidding at auction. Land status should be assessed early to avoid unintentional breaches of the regime. Holland Beckett can help with your investment needs including sensitive land assessments and advice on how the overseas investment regime might affect your transaction.

As New Zealand’s towns and cities grow and land becomes scarce, infill housing is an obvious solution to meet demand. Infill development encourages vibrant and inclusive communities by offering a range of housing choices, like duplexes, townhouses or apartments, close to existing amenities and public transport. It makes use of established infrastructure, helping to maintain and upgrade facilities, strengthening the neighbourhoods already in place. However, thoughtful design is key. New developments need to respect the look and feel of the area, be well connected and include private and shared outdoor spaces. Safety and privacy can be provided with smart layouts, noise control and good lighting. The consenting processes across the country all emphasise these principles, and planning rules are increasingly focused on ensuring new homes contribute positively to the surrounding environment. Ownership structure also matters when planning an infill project. There is often a strong preference for freehold titles because they provide a high degree of control and work well for standalone homes with private yards and driveways. Unit titles (or strata ownership) are commonly used for higher-density developments with shared spaces. However, either option can be made to work well in an infill context - it depends on the site, the design and the target market. Beyond design and ownership, the long-term success and value of infill housing developments often comes down to the legal frameworks established during the development process. These include land covenants, body corporate rules and residents’ societies, which govern how shared spaces are managed and how people live alongside one another. Well-drafted rules help prevent disputes, ensure maintenance is carried out and support a sense of community. Legislation has a key role to play in making better use of land for housing. In many areas, old land covenants (private rules between property owners, separate from council planning) are quietly stopping development. Removing these covenants is expensive and unpredictable. Either every affected owner has to agree (which is rarely practical), or you have to go to court and prove the covenant no longer makes sense. Policymakers need to consider a better way forward, such as imposing a time limit on covenants, or flipping the current legal process on its head: instead of proving a covenant is outdated, those who benefit from it would need to show that the covenants still serve the neighbourhood meaningfully. Doing so could unlock a surprising amount of land for new housing without putting genuine neighbourhood protections at risk. Done well, infill housing offers a practical, affordable and sustainable way to meet New Zealand’s housing needs. Whether you’re a homeowner with a large backyard or a landowner with a subdividable site, infill housing could be a smart way to unlock value. With expert legal and planning advice, and the right structure and support, you could turn unused space into valuable housing - and help your hometown grow responsibly. Thinking about developing your property? Hilary Anderson is a Partner at Holland Beckett, specialising in urban development and infill housing. This article was first published in the New Zealand Herald and Bay of Plenty Times, October 2025.

If you own land or are considering purchasing it, understanding the type of ownership is essential. Different estates come with unique characteristics that can affect how you use and manage the property. In New Zealand, there are several different land estates, each with its own advantages and disadvantages. Two common forms are fee simple (also known as freehold) and cross lease. Fee Simple (Freehold) Fee simple land is generally the simplest form of property estate in New Zealand. Owning a fee simple title means you have complete ownership of the land. This gives you flexibility to build or make changes without needing consent from other owners, unlike cross lease arrangements. However, your property is still subject to council regulations and any registered interests on the title, such as easements or land covenants, which may affect what you can do. Fee simple titles are often viewed more favourable to prospective purchasers when selling your property because they offer full ownership, autonomy, and no lease expiry dates and thereby potentially increasing the market appeal and value of the property. Cross Lease Cross leases are a type of title which were favoured in the 1960s by developers as a means to complete a subdivision in a flexible, expedient and less costly manner when compared to fee simple subdivisions. Cross leases are made up of two components. Firstly, the parties to the cross lease all own an undivided share of the underlying land and secondly, a lease for party of the land/building. Each owner of the land may then erect a building on their allocated area/segment of the land. This building will then be leased back to them (often for a term of 999 years) and recorded on the record of title. The lease sets out the rights and responsibilities of each party sharing an undivided share of the underlying land, including a right of exclusive use and enjoyment for each building and usually the yard associated with that building. Restrictions of Cross Lease Titles Generally the lease contains rights and restrictions on what you can and cannot do on your property. The more significant restriction being the requirement to obtain your cross lease owners consent to any additions or alterations on the land and to any dwelling(s) on the property. If consent of the other cross lease owner(s) is granted, you will also need to update the deposited plan / flats plan shown on record of title in order to accurately reflect the dwellings located on the underlying land which can be costly. If consent is not obtained or the flats plan is not updated or obtained prior to carrying out such works on your property, this may result in a dispute between owners or a defective title. This can affect the future on-sale of the property as under the latest ADLS Agreement for Sale and Purchase of Real Estate, a prospective purchaser may request that a new flats plan is deposited or you obtain consent from your neighbours for any unauthorised structures prior to settlement. Benefits of Fee Simple Titles While there are some advantages to maintaining cross leases, including having an element of control over what your neighbour / cross lease owner can and cannot do on their property, it may be beneficial to convert your cross lease title to a fee simple title. Full ownership then gives you the freedom to build, renovate and make changes without requiring consent from other owners. Converting Cross Lease to Fee Simple The first step is to discuss with your neighbouring cross lease owners to see if they are interested in converting to fee simple. If all parties are interested, then converting your cross lease involves the following: Engaging a surveyor who will assess the underlying land as to the services and access to the dwellings. This stage may also include an assessment on whether separate services for sewage, water or drainage are required. A Resource Consent would then need to be applied for from local council. Depending upon the property and area, council may impose conditions and works needing to be undertaken prior to granting consent. Once consent is granted your surveyor will provide the plan to your solicitor. Your solicitor will then use it to draft the relevant documents to complete the cross lease conversion, including obtaining mortgagee consent (if applicable), drafting easements, covenants and preparing all ancillary documents necessary. Once both your surveyor and solicitor have worked together to prepare the relevant documents and obtained the necessary consents, the documents and plans are lodged with Land Information New Zealand for separate fee simple titles to be issued for you and your neighbour. Holland Beckett has a large, experienced property law team who have assisted many clients in converting to fee simple titles. If you would like any assistance with converting your cross lease, please get in contact with one of our property team.