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Government package for commercial leases too little, too late

Friday 5th June 2020

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“Today’s announcement of a commercial rent dispute process is too little, too late for a majority of landlords and tenants”, says Property Council chief executive Leonie Freeman.

“For many property owners and tenants, this is less a support package and more a dispute resolution option that has come two months too late to have much impact. Our members tell us that over 80% of landlords and tenants have come to an agreement over rent relief, making this proposal largely redundant.

“While the arbitration component may be helpful for those who have not concluded negotiations, in reality this decision has taken far too long and has had little (if any) industry consultation”, says Freeman.

“The devil will be in the detail, with much of the intricacies of this announcement still to be clarified. For example, what constitutes a “small landlord” and does this package include large businesses who have multiple sites with less than 20 full time employees? There are many questions that remain unanswered at this stage.

“The intent of the recommendations to support small businesses is understandable, however, it fails to actually target them. Many larger businesses will be captured under the current proposals as they will often have fewer than 20 FTE’s per site.

“Small businesses need three things: cash, time and certainty. While today’s announcement offers a path to arbitration for those who need it, we still believe that a straight rent relief package such as the one we presented to government in early April would have had greater affect.

“We hope that landlords and tenants now have the certainty needed to settle any remaining negotiations and move on to recovery mode. We’ve been a team of 5 million during lockdown, now that same team of 5 million must band together to support those businesses who have suffered during this period”, says Freeman.

Source: Property Council New Zealand



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