Government working on commercial lease negotiations
THE Government is working urgently to force commercial landlords and tenants to negotiate rent relief during the Covid19 restrictions, in cases where they are refusing to do so.
A Cabinet committee yesterday morning discussed options tabled by Justice Minister Andrew Little and policy announcements are expected.
Prime Minister Jacinda Ardern reiterated the Government was not able legally to impose commercial rent relief. However, persistent reports of some commercial landlords refusing to lower rents and some tenants withholding all commercial rent payments was prompting a policy response.
‘‘We are working on measure under which parties to a commercial lease would be expected to consider rent concessions. We have heard the call of small and mediumsized businesses and we are working to actively resolve that,’’ Ms Ardern said.
The Government had extended deadlines in leases to allow more time for landlords and tenants to negotiate an outcome and had hoped no further action would be required.
Large numbers of commercial landlords and tenants have already reached agreements, many of them guided by lease provisions created after the Canterbury earthquakes that require a ‘‘fair’’ rent reduction in certain uncontrollable circumstances, which include a government order not to go to work because of an epidemic.
Ms Ardern said the Government was looking to Australia, where states were enacting similar measures.
In a statement, Mr Little said the changes would be enacted through changes to the Property Law Act, including ‘‘how parties to a commercial lease would be expected to consider rent concessions in whole or in part for a period where the response to Covid19 has had a material impact on a business’’.
‘‘The lockdown has affected businesses in different ways and it wouldn’t be fair to have one solution — like a rent freeze — for every situation, especially when in many situations landlords have already agreed to rent reductions,’’ Mr Little said. — BusinessDesk