Source: New Zealand Government
The Government is considering options to support New Zealand businesses with rent payments as they face the economic impacts of COVID-19.
“While 75 per cent of the economy is up and running again under Level 3, we know many businesses, especially our smaller ones, have been hard hit by a drop in revenue and are struggling to meet their fixed costs,” Andrew Little said.
“So, to add to the wage subsidy and other support in place, Cabinet Economic Development Committee ministers today discussed options around changing the Property Law Act to support New Zealand businesses in managing their rent
“This includes 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 COVID-19 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. Landlords need to share the burden of COVID-19 fairly with their tenants,” said Andrew Little.
“We had heard the call to subsidise rent or to freeze rents. However both of these approaches would have meant commercial property owners would have had their income protected at a time when no one else enjoys that privilege,” Andrew Little said.
“The Property Law Act and the Residential Tenancies Act are entirely different pieces of legislation, with different types of rights and case law. We have already announced we will amend the Property Law Act 2007 to push out deadlines on lease terminations, but it is clear from information we have received this alone is not enough in many cases.”