Emily Merrill

Qualifications

LLB (First Class Honours), BCS (majoring in Marketing) University of Waikato 2017
Admitted to the Bar in New Zealand 2018

Contact

DDI: +64 7 571 3838
M: +64 22 188 3970
E: emily.merrill@hobec.co.nz

Emily is a senior solicitor working in the Commercial and Property team with Joel Murphy.

Emily was born and lived in California until 2007 when she moved to Tauranga to complete her secondary schooling. Emily completed her Bachelor of Laws with First Class Honours and a Bachelor of Communication Studies (majoring in Marketing) through the University of Waikato.

Emily has experience in a wide range of property and commercial matters including subdivisions, townhouse developments, sale and purchase of residential, commercial and rural properties, refinancing arrangements, building contracts and commercial leasing.

Emily also has experience with the buying and selling of kiwifruit orchards and forestry assets as well as advising both landowners and developers on large scale solar projects throughout New Zealand.

Outside of work Emily loves to travel and spend time outdoors hiking, snow skiing and playing tennis.

Emily Merrill's Expertise

Renewable Energy & Climate Change

Rural & Agribusiness

Property Law

Commercial Law

Emily Merrill's News & Resources

Solar Development – documenting land rights

The market for solar farms is continuing to grow in New Zealand with an increasing number of landowners being approached by solar developers. It is interesting to see the various approaches being taken by solar developers when it comes to documenting land rights with landowners (i.e. option agreement, lease and/or easement). The process for documenting a solar development stems from a Letter of Intent / Heads of Terms, to more formal binding agreements such as an Investigation License, Option to Lease and ends with a Lease or Easement. We have provided a brief summary for each document as follows: Letter of Intent (“LOI”) / Heads of Terms (“HOT”) This document sets out the key commercial terms that will form the basis of the Investigation Licence/ Option to Lease and the Lease or Easement. Generally the only binding terms of this document are terms regarding exclusivity and confidentiality. This means that the landowner cannot disclose the proposed commercial terms of the project to a third party (except for your professional advisors). The Landowner will also be prohibited to deal with any other solar developer named on the LOI / HOT for the term of the exclusivity. Investigation Licence / Option to Lease The Investigation Licence (also referred to as an Option to Lease) grants the developer a timeframe to investigate the land, carry out their due diligence, secure finance to fund the solar project, obtain resource consent and any other required consents and obtain Overseas Investment Office approval (if applicable). Typically the Investigation Licence is granted for 3 - 4 years and the developer will pay the landowner an upfront compensation payment (in the form of a licence fee, signing bonus or other) for the right to tie up the landowners land for this period of time. The Investigation Licence will annex the form of lease which the parties will be bound by should the developer exercise an Option Notice. If the developer exercises their right to lease the land the developer will issue an ‘Option Notice’. The parties will then enter into a Lease to govern the relationship from the Lease commencement date onwards, with the developer being the tenant and the landowner being the landlord. Careful consideration needs to be taken by landowners to ensure not only legal aspects are covered but also just as important, the practical factors (ie. crop / stock compensation, access to land during calving etc). Lease The terms for the Lease are substantially, if not completely, agreed to at the time that the Investigation Licence is entered into by the parties. The Lease will not only set out the rights and obligations of the parties relating to the land which the developer exercises its Option Notice over but it should also address the rights and obligations of the parties over the balance of the landowner’s land not subject to the Lease. These rights include whether any easements for electricity and access are required to be granted over the balance of the land for the operation of the solar development. The Lease will also likely include a clause for requiring the landowner to enter into a Tripartite Agreement (discussed further below), a CPI rent review mechanism, whether any grazing licences are to be granted over the leased area, decommission of the project, assignment and many more important provisions. Any reinstatement obligations that the developer (as tenant) is required to comply with once the Lease has ended should also be addressed within the Lease. Contrary to the above, we have seen some solar developers in New Zealand document the rights and obligations of the parties within an easement. These interests are exempt under the Overseas Investment Act 2005 if they meet the Overseas Investment Office’s (“OIO”) criteria of an easement arrangement. However the OIO has indicated that easements are not an appropriate arrangement to be used for solar farms. Tripartite Agreement One notable feature that we are increasingly seeing in solar farm leases (and sometimes even in the Investigation Licences) is the requirement for the landowner to enter into a Tripartite Agreement, also known as a Direct Agreement. These agreements involve three parties in the context of a solar farm lease, being the landowner, the developer and the developer\'s financier. The purpose of a Tripartite Agreement is to regulate the three parties in respect of the solar farm lease and record certain arrangements between them, including but not limited to the process in the event of a default under the Lease. Generally a Tripartite Agreement is a developer financier driven agreement which grants the developer\'s financier the right to step into the shoes of the developer (as tenant) and become a party to the Lease in place of the developer (as tenant). Usually this would only be in a situation when the tenant is in financial trouble or has failed to remedy a breach. The developer’s financier thereby assumes some or all of the rights and obligations under the Lease as if it were the developer. This provides security to both the landlord and the financier to the extent that in the event of a developer (as tenant) default (i.e. does not pay rent), the financier has the right to step in and remedy the breach (i.e. pay the rent) to ensure the landlord does not terminate the Lease resulting in the financier losing its significant investment in the solar development. However, the Tripartite Agreement also includes additional onerous provisions which often supersede existing Lease terms which a landlord needs to be aware of. For example the Tripartite Agreement may extend the period of time which a tenant has to remedy any breach (cure period) or prohibit the landlord from being able to terminate the Lease or suspend the performance of any of the landowner’s obligations (as landlord) unless the notice periods and obligations under the Tripartite Agreement are first complied with. If you would like to discuss any solar matters or have been approached by a solar developer please contact us.

Commercial Leases: Key differences between an Assignment of Lease and a Sublease

Similar to the trend seen overseas, working remotely has become a more common and standard practice, which has impacted the way some businesses now operate in New Zealand. Accordingly, when tenants under commercial leases are reviewing their leasing requirements they may decide that they no longer require the same area of premises. This may lead to a tenant transferring their rights under a commercial lease to another party by way of an assignment or sublease. In order to determine which arrangement is best for your business and circumstances, it is important to understand the differences between the two. A sublease is where the tenant (commonly referred to as the sublandlord) transfers part or all of the tenancy under the sublandlord’s existing lease to a third party. It is important to note that the sublandlord retains an interest in the premises and there is no direct contract between the headlandlord and the subtenant. As a result, the sublandlord is still responsible for all lease obligations but the subtenant pays a contribution for the part of the premises that they sublease from the sublandlord. The subtenant is responsible to the sublandlord for the lease obligations under the sublease. This type of arrangement is particularly common when the sublandlord no longer requires all of the leased premises and wishes to recover some of the costs under the headlease. It is vital to ensure that the timeframe for the sublease arrangement does not extend beyond the term under the headlease. If you are considering subleasing part of your premises, the first step would be reviewing your headlease terms to see if there are any restrictions on the area or any parts within the premises that can or cannot be sublet. An assignment of a lease involves the new tenant (commonly referred to as the assignee) agreeing to take on all of the existing tenant’s (commonly referred to as the assignor) lease obligations. The transfer of the interest is for the remaining duration of the lease. While the assignment of lease terminates the assignor’s right to possession, the assignor’s liability under the lease commonly continues to the expiry of the current lease term unless provisions are included within the Deed of Assignment of Lease or negotiated with the landlord to provide otherwise. This liability also extends to any guarantors provided. However, the standard ADLS Deed of Assignment of Lease includes an indemnity from the assignee in favour of the assignor against any claims the landlord may raise against the assignor or the assignor’s guarantors. Once you have established which option is best suited for your business’s circumstances you need to ensure that the headlease allows for an assignment or a sublease to be granted and approach your landlord for their consent to the assignment or sublease. If you want to assign or sublease your commercial lease or have queries about your lease, please contact us to find out which option is best for you.

Converting cross lease titles to fee simple

Are there benefits of converting cross lease titles to fee simple?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. Generally the lease contains right 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, sheds or garages 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. 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 also be beneficial to convert your cross lease title to a fee simple title (commonly called freehold) as you will have more autonomy over your property to carry out alterations and additions and not be restricted by the terms within the lease. Due to this autonomy, fee simple titles are often viewed more favourable to prospective purchasers when selling your property and thereby potentially increasing the market appeal and value of the property. If you are interested in converting your cross lease, we recommend that you first discuss this with your neighbouring cross lease owners to see if they would also be interested. 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, which your solicitor will then use 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. If you have any questions or would like any assistance with converting your cross lease, please get in contact with one of our property solicitors.

Health and Safety at Work (Asbestos) Regulations 2016

Health and Safety at Work (Asbestos) Regulations 2016 Asbestos was used in building products up until the 1990s due to its ability to resist heat, electricity and chemical corrosion. However, in New Zealand an estimated 170 people die of asbestos-related diseases each year making it the largest single cause of work related deaths. In response, the Health and Safety at Work (Asbestos) Regulations 2016 (“Regulations”) were introduced and came fully into effect on 4 April 2018. These regulations impose additional duties on Persons Conducting a Business or Undertaking (“PCBU”), including landlords, managers and tenants, in relation to work involving asbestos. This includes the obligation of managing and removal of asbestos risks to ensure the working environment is free of airborne asbestos fibres. Generally, if your building was built prior to 1 January 2000 it is more likely to have asbestos-containing material incorporated within it. Under the Regulations, a PCBU who knows or ought to reasonably know that there is a risk of exposure to respirable asbestos fibres in the workplace must ensure that all asbestos or asbestos containing materials (“ACM”) are identified. An ACM includes items such as concrete, stipple ceiling coatings and window putty. The first step in complying with the Regulations is to identify if asbestos is present within the workplace. Therefore, one should not merely assume that asbestos is not present. Instead to comply with the Regulations, a PCBU should organise an inspection by a suitably qualified consultant to identify whether asbestos or ACM is present within the property. If the survey results show that there is or there is likely to be asbestos, all PCBUs must ensure that a written asbestos management plan is prepared. As property owners we recommend that you drive this process in consultation with your tenant. As per the Health and Safety at Work Act 2015 (“HSWA”), to ensure that their legal obligations are met, a PCBU is obligated to consult, co-operate and co-ordinate so far as reasonably practicable with all other PCBUs who have a duty in relation to the same matter. This means that each PCBU will need a management plan. An asbestos management plan needs to include the identification of asbestos or ACM, the decisions made in relation to the management of the risk arising from asbestos, as well as the reasons for such decisions. The management plan needs to detail the procedure for detailing incidents or emergencies involving asbestos or ACM at the workplace and the workers who are responsible for carrying out work which involves asbestos. In relation to the workers responsible, the plan must also detail any information and training that has been provided to the workers, their responsibilities and role and any health monitoring of the workers that has been undertaken. Under the new Regulations, we recommend when purchasing a property, due diligence investigations include determining whether a survey or management plan has been conducted or put in place for the property. If not the purchaser should arrange an inspection by a suitability qualified consultant to identify whether asbestos or ACM is present within the property. The Regulations also will affect tenancy relationships. Under the HSWA, landlords must ensure that when work is carried out on their property, it is done in a safe manner without endangering workers or others, including tenants. While the obligation to identify and manage asbestos cannot be contracted out of, when leasing a property parties should consider whether the inspection cost is to be allocated to one party or shared. This means that each party should note what the lease obligations are in relation to who is responsible for the costs. PCBU’s must ensure that the asbestos management plan is kept up-to-date. In addition, the management plan needs to be revised if there is a review of a control measure, asbestos is disturbed or removed, the plan is no longer adequate, a workers’ representative requests a review or when five years have passed since the plan was last reviewed. Failure to comply with a review can result in fines upwards of $6,000 for individuals, and $30,000 for companies and other corporates. Therefore, we encourage those who own, occupy or manage a commercial property to ensure they clearly understand their responsibilities under the Regulations.