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You are here: Home / Blog / COVID 19 update: body corporates to hold meetings remotely, commercial lease rents can be longer in arrears before cancellation, and mortgagors have longer to remedy defaults

May 25, 2020 by Wolters Kluwer NZ

COVID 19 update: body corporates to hold meetings remotely, commercial lease rents can be longer in arrears before cancellation, and mortgagors have longer to remedy defaults

Temporary changes to allow body corporates to hold meetings remotely

The COVID-19 Response (Further Management Measures) Legislation Act 2020 (the Response Act) makes temporary changes to the Unit Titles Act 2010 to allow body corporates to hold meetings remotely. Before the amendments it was unclear whether members of a body corporate could attend body corporate meetings by audio link or audiovisual link (or whether they had to attend in person).

Sections 88(3-5) were inserted in Unit titles Act and apply retrospectively from 25 March, to protect meetings that have already been run remotely.

Members of a body corporate can attend a general meeting (and members of a body corporate committee can attend a committee meeting) in person, by audio link, or by audiovisual link, despite any limitation or condition on the use of such links in the body corporate operational rules or anything to the contrary in the Act or the regulations.

The sections will be repealed 12 weeks after the Epidemic Notice expires or is revoked.

Temporary Property Law Act sections affect leases

The Response Act inserts new sections into the Property Law Act 2007. They apply to leases in operation during the COVID-19 period. The COVID-19 period begins on 1 April 2020 and ends six months after the Epidemic Notice expires or is revoked.

During the COVID-19 period, leases cannot be cancelled for non-payment of rent unless the rent has been in arrears for not less than 30 working days (up from 10 working days), and the breach has not been remedied in accordance with notice given under s 245 of the Act.

This notice must include a period of not less than 30 working days after the date of service of the notice (up from 10 working days) for the tenant to remedy the default.

The extended periods apply retrospectively to notices served on or after 1 April 2020. There are consequential restrictions on relevant enforcement action and proceedings.

The sections, ss 245A-E of the Property Law Act 2007, will be repealed six months after the Epidemic Notice expires or is revoked.

Mortgages of Land

The Response Act inserts temporary sections in the Property Law Act 2007 apply to mortgages in operation during the COVID-19 period. The COVID-19 period begins on 1 April 2020 and ends six months after the Epidemic Notice expires or is revoked.

Notices given under s119 of the Property Law Act by mortgagees to current mortgagors of mortgaged land must now include a period of not less than 40 working days (up from 20 working days) for remedying the default where the mortgagor has been in default in the Covid-19 period.

The 40 working-day period applies retrospectively to notices served on or after 1 April 2020. There are consequential restrictions on relevant enforcement action and proceedings.

The temporary sections ss 120A-E of the Property Law Act will be repealed six months after the Epidemic Notice expires or is revoked.

Mortgage of Goods

Default notices given under s 128 of the Property Law Act by mortgagees to current mortgagors of mortgaged goods must now include a period of not less than 30 working days (up from 10 working days) for remedying the default where the mortgagor has been in default in the Covid-19 period.

The extended period applies retrospectively to notices served on or after 1 April 2020. There are consequential restrictions on relevant enforcement action and proceedings.

The temporary sections, ss 129A-E of the Property Law Act, inserted by the Response Act, will be repealed six months after the Epidemic Notice expires or is revoked.

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