John Mackay

Holland Beckett Law have completed negotiations with JWL Central Ltd to lease approximately 2000 square metres of space in the Northern Quarter development. Partner John Mackay says that the firm made the decision to move into the CBD in August 2020. “We wanted to have a physical presence in the heart of city and to be part of the revitalisation of the Tauranga CBD. We have 110 people currently working in our Tauranga office and we hope that bringing our people into the CBD will be good news for the business, retail and hospitality sectors. We were looking for a large floor plate that would enable our legal team to work together on one floor. The complex nature of many legal matters often necessitates a collaborative approach, drawing on the expertise of specialists within different practice areas. This is made that much easier when you are within line of sight of the experts you need. We knew that to get the right environment for our business, our people and our clients meant that planning needed to start well before it was time to move. Having signed an agreement to lease is a big milestone for us and the overall project.” Practice Manager Sharline Fitzgerald said “The management team are focused on providing an office that meets the needs and expectations of both clients and staff. With flexible work options now the norm we see benefits in making the office a destination that our people want to come to. As the city grows we are seeing a bigger emphasis on public transport, cycleways and even a ferry service. These services tend to terminate at the CBD so we are looking forward to being able to increase our participation.” Mackay was a new partner when the firm moved to the premises at 525 Cameron Road in 2008 and credits the significant growth the firm has been able to achieve over the last 14 years to the open plan premises. “When we moved in 2008 it was very bold for a law firm to embrace the open plan environment but we knew that it would give us the flexibility we needed to grow the firm. The open plan environment supports better supervision and delegation which are key to developing good lawyers. In 2008 we had 14 lawyers in total and we are now the largest law firm in the region with 52 lawyers in the Tauranga office and a further 12 lawyers in our Rotorua and Whakatane offices. The development team on the Northern Quarter project have presented a quality building that will change the landscape down town and we are excited about our move to The Strand.\"

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.