​​Formalising the co-location

It’s a good idea to formalise the intent and responsibilities of this partnership before making any leasing decisions. This ensures that both the Crown and the party taking on the role of lead agency is protected against any commercial risk.

There are two government templates available that provide agreements for how the partnership will work – the Memorandum of Understanding (MoU) and the Co-location Agreement. Both of these documents are drafted on the basis that all agencies are entering into a partnership agreement for the fitting out of the premises and the full term of the tenancy. These templates are considered living documents and will be refined over time to reflect feedback and learnings from previous co-locations. Both documents aim to set out, to the greatest extent possible, a neutral position for both parties. GPG is party to both agreements.

We expect that:

• both an MoU and a Co-location Agreement will be signed by those with appropriate delegated authority within your agency, (usually Tier 1 or 2)
• agencies have the necessary approvals to meet the commercial and financial obligations set out in the agreements
• GPG is included in key communications regarding the development of the documents and can be more involved in facilitating the agreement development if required
• the templates will be customised for the specific circumstances of the co-location.

Please email us at info@gpg.govt.nz if you require a copy of the Memorandum of Understanding and Co-location Agreement templates. Our legal team can help with any queries you have around customising the documents, and we can also provide a legal review of completed agreements.

The Memorandum of Understanding (MoU)

The MoU is an initial agreement between all parties, including GPG. It’s designed to document the intent to lease and outlines:

• project parameters, including:
  • expected budgets for capital expenditure
  • operational expenditure
  • lease term expectations, and
  • high level space requirements.
• decision-making processes for standard project decisions, such as design decisions, changes to the project parameters, and operating decisions
• the obligations of the lead agency and participating agencies throughout the project
• exit provisions should one party need to leave the project, but this is subject to obligations being met.

The MoU is put in place once the project is confirmed - ideally before agencies go to market to find a building - and ends when the co-location agreement is signed, or the project is dissolved without entering into a lease.

The co-location agreement

The co-location agreement is essentially a lease agreement between all parties. It’s put in place to coincide with rent starting and ends at the same time as the lease ends.

The co-location agreement mirrors the lease’s commercial terms, and documents:

• cost allocations
• obligations should an agency need to exit the co-location
• processes for new parties to join the co-location
• mechanisms for making decisions during the life of the tenancy
• health and safety responsibilities.

The lease will be attached to the co-location agreement. However, the agreement does highlight areas where there may be limitations placed on occupants, such as building use or activities that need the landlord’s consent.

The commercial terms can be tailored to accommodate more temporary participating agencies. We’d advise that you ensure all occupants of the building agree to any agency joining the co-location on different terms.