Support for commercial rent disputes

Many commercial lease arrangements in New Zealand have been affected by the response to COVID-19. Tenants may be unable to pay their rent as their business is not fully operating or generating sufficient income. Landlords may also be unable to meet their mortgage payments.

The Government has taken steps to support those businesses.

In May, some temporary law changes were made to support tenants and landlords:
  • These changes make it easier to retain lease arrangements and get back to business as usual after the epidemic by giving parties more time to fulfil their payment obligations before the other side can take enforcement action.
  • The changes relating to leases apply to commercial tenants and their landlords.
  • The changes relating to mortgages apply to all mortgages, including residential and commercial as well as mortgages relating to goods (such as a business’s assets other than land and buildings).
  • We anticipate that mortgage holidays are likely to be the first port of call for residential borrowers.
In June, further temporary measures were made to specifically support small New Zealand businesses:
  • Parties to many smaller-scale commercial leases will be required to negotiate the payment obligations to ensure a fair rent is agreed.
  • Negotiations can be conducted in any way agreed by the parties, such as through mediation.
  • Remaining disputes must be resolved through arbitration.
  • The Government will subsidise streamlined arbitrations with up to $6,000 including GST per proceeding and up to $40 million in total.
You can learn more here.