last updated 10/05/2020
PM promises action on commercial rents
last updated 10/05/2020
29 April 2020 – Jacinda Ardern has responded to requests from business and industry groups for Government action to bring landlords to the negotiating table
Last week, eight industry groups representing business joined forces to call on the Government to urgently increase protection for commercial tenants in the face of rents that are now completely unaffordable under the COVID-19 lockdown and now pose a serious threat of causing business failures and job losses. Today, in her daily press conference, the Prime Minister promised action and referenced the Code of Conduct that was introduced in Australia to address similar concerns over the Tasman.
Jacinda Ardern’s full statement was:
‘I want to talk about NZ’s small businesses, many of whom will now be back at work but some who will not. We have already put in place the wage subsidy scheme to help with what is usually a firm’s largest costs – wages – and today I can share news of further work that we are doing to help with commercial rents.’
‘As many of you will know, we have already agreed to push out deadlines on lease terminations when someone moves into arrears, but it is clear that this alone would not be enough for many businesses so we need to provide more reassurance – as much as we are able to within the law.’
‘Although we cannot currently impose a commercial rent reduction, we have asked commercial tenants and landlords to work together to reach a fair agreement. However, some parties on both sides of the contract appear unwilling to renegotiate payment terms, with officials advising that some landlords are demanding full rent from tenants who have been unable to trade for several weeks and cannot afford it, while some well-resourced tenants have written to landlords declaring that they refuse to pay their rent for several months.’
‘Minister Little discussed options with other ministers at cabinet committee this morning. I can confirm that we are actively working on measures under which 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 business.’
‘We’ve heard the call from small business owners over and above that already provided by the wage subsidy and tax measures and we are working actively to resolve that. So in principle we have supported the work Minister Little is doing. We expect papers to come shortly and as soon as those final decisions and work has been completed by the Ministry of Justice has been completed we will be sharing it. ‘
‘I do want to acknowledge that something similar has been worked out in Australia. That Code of Conduct as I understand it hasn’t been legislated, that needs to happen at a State level, so we are working looking at some of the similarities of what they have done here and what will be workable under our Property Act in NZ.’
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