Managing leases

The Government Property Portal

Use the Government Property Portal (GPP) to:

• monitor your lease obligations and key dates
• store all lease-related information, including records of written correspondence, phone conversations and meetings related to the lease
• run rent review and lease expiry reports
• keep track of key actions and events, and the status of these.

Keeping the portal accurate and up-to-date helps both your agency and GPG to maintain a single source of truth. This will assist with planning and decision-making on wider government property initiatives.

Lease renewals

Mandated agencies need written approval from GPG before confirming to your landlord whether or not you will be renewing your lease.

Lease approval process

Plan ahead

• If you are not planning to renew your lease, landlords can often require 12 months' notice in writing. Check your current lease to make sure.
• If you are planning to renew your lease, the timeframe for written notification is usually between 3 and 12 months. Remember to take into account the time required to complete a NABERSNZ assessment, as complying with these standards is required for lease renewal.

Energy efficiency standards

Amending lease provisions

Lease renewal can be a good time to:

• ask the landlord to amend existing lease provisions
• raise any issues relating to service or maintenance
• seek improvements, like new carpet.

Raising issues at lease renewal time can give you extra leverage. For example, if you request an amendment or a more stringent provision for seismic issues, you can choose not to renew the lease if the landlord does not agree.

Rent reviews

If you have a pre-agreed fixed rate rental review in place (like a consumer price index (CPI) adjustment or stipulated percentage increase), this will always happen as set out in the lease.

If you don't have a fixed agreement in place, you must get an independent rental market valuation from a registered valuer before agreeing to any variation.

Valuation reports

Any valuation report should be compliant with the New Zealand Institute of Valuers Valuation Standards and include:

• market rental
• evidence of comparable rents and analysis and reconciliation of the evidence to the market rent for the premises (and car parks if any)
• copies of any specialist technical advice (like engineering reports) referred to during the valuation process
• details of which improvements are included or excluded in the determination of the market rental.

If you have any queries about rental valuations, contact us. We may be able to provide information from other recent valuations of a similar type.

Falling markets

In a falling market, a landlord may not instigate a rental review unless they have to. In these cases, agencies should get a valuation report and instigate the rental review if the valuation shows a decreased rent.

Ratchet clauses

If a lease has a ratchet clause, understand whether it is:

• a soft ratchet clause, which means the rental figure will never drop to less than the original sum agreed between the landlord and the tenant, or
• a hard ratchet clause, which means the rental figure will never drop to less than the last rental figure agreed at the previous rental review.

Ensure you understand and stick to any clauses that refer to ‘time being of the essence’.

Lease expiry and disposal

You need to know well in advance when your lease is due to expire – landlords often require 12 months' notice if you are not intending to renew. If you use GPP to manage your lease, you can set up automatic notifications for key dates.

Lease disposal 

If you are disposing of a lease, you'll need to follow our approval process and complete the lease disposal approval form.

Lease approval process

Make-good clauses

Ideally, lease agreements using our templates should not have a make-good clause in them. If you have an older lease agreement with a make-good clause:

• check your lease to be clear on what you're obligated to reinstate
• speak to us early on – we may know of another agency that could use the space, which could reduce or remove your make-good obligations
• get an estimate from a quantity surveyor or a quote from a contractor to understand the costs involved in reinstating the premises, including costs that may come from removing fixtures, fittings and equipment. Check with your finance team to see what provisions were made for any make-good clauses when the lease was executed.

Maintenance obligations

Create a clear schedule of maintenance obligations, such as maintaining lifts or air conditioning, defining for each obligation:

• who is responsible (landlord or agency)
• when it needs to be done.

Use our template as a starting point:

Facilities management

Building additions and alterations

If you need to alter the leased space during your lease term, check the lease to confirm whether you:

• need prior written approval from the landlord
• will need to return the property to the original state at the end of the lease
• need consent from any local authorities.

Managing a design and fit-out project