Property Council New Zealand (PCNZ) has kicked off 2025 by issuing updated versions of its standard office, industrial, and retail leases, which form the basis of many commercial leases in New Zealand. 

The PCNZ template forms of lease are well-established in the property sector, but have not been as widely used as the ADLS (now Law Association) templates. That may change now though – with PCNZ offering its leases free to its members in a fully editable Word format, we expect a greater uptake in the market.

We set out a summary and observations on the noteworthy amendments below.

Key updates in the PCNZ standard office lease

Previous versions of the PCNZ standard office lease have been more ‘landlord-friendly’ than the ADLS/Law Association deed of lease. While that remains the case in certain areas, PCNZ has made a conscious effort to shift that perception and reflect the needs of all if its members, including:

• More ‘balanced’ terms.

  • More defined landlord maintenance obligations.

  • Changes to the market rent review process and interim rent settings (but the hard ratchet remains).

  • A cap on the insurance excess that is payable by the tenant.

  • Fewer restrictions on the release of any bank guarantee following lease expiry.

• Terms reflecting market changes.

  • Provision for CPI and fixed rent reviews.

  • Removal of the previous seismic warranty in favour of an information sharing regime.

  • Removal of the landlord’s right to supply consumables to the tenant.

  • Removal of a sinking fund contribution in operating expenses.

These updates should reduce the gap between the PCNZ standard office lease and its ADLS/Law Association alternative. However, several differences between the two forms remain, including:

• Sustainability: “Sustainability initiatives” (previously “environmental initiatives”) in the PCNZ lease are extended to include a mutual commitment to promoting sustainability outcomes (including reducing demolition waste arising from lease end works) and co-operating on sustainability initiatives. 

• Damage and destruction: The tenant has termination rights on partial damage and destruction in the PCNZ lease, but the latest updates place new restrictions on those rights and provide for expert determination if the landlord disputes the tenant’s right to terminate.

• Exit obligations: There are detailed exit obligations in the PCNZ lease. The parties can exchange building surveyor reports before lease expiry and trigger a third-party determination process if they disagree on the scope of the work required. Disagreements in relation to lease end reinstatement and/or makegood requirements are a major source of leasing disputes, so this process may help to address those types of disputes.

• Health and safety: The health and safety provisions in the PCNZ lease go beyond the general “compliance with laws” provision found in the ADLS/Law Association alternative.

If you have any queries in relation to these new lease template options, please get in touch with one of our experts.