The Government is changing the law to help commercial tenants affected by the Government’s response to Covid-19.
The Government will amend the Property Law Act to give all commercial tenants rent relief during lockdowns. Landlords and tenants must refer disputes about rent relief to arbitration.
Many commercial leases have clauses that give tenants the right to rent relief if tenants cannot use the premises because of emergencies such as disasters (natural or otherwise) and epidemics.
These are called “no access clauses”.
The law change does not apply to leases that have “no access clauses”. If your lease has a “no access clause”, then the terms of that clause continue to apply as before.
The law change only applies if your lease does not have a “no access clause”.
The law change applies to lockdowns as a result of epidemics. The law change does not apply to lockdowns as a result of natural disasters and other emergencies.
Further, the lockdown must be in effect from 28 September 2021.
- The law change does not give rent relief to tenants during the lockdown outside Auckland from 17 August to 7 September 2021; and
- In Auckland, the law change does not give rent relief to tenants during the period when the lockdown started on 17 August through to 27 September 2021.
Rent relief is not available to fully operational essential services.
Rent relief is only available to tenants who are unable to gain access to all or any part of their premises to fully conduct their operations because of health and safety reasons related to an epidemic.
If the above criteria apply, a fair proportion of the rent normally payable will cease to be payable while tenants are unable to access their premises.
There are several factors to consider when assessing how a fair proportion of the rent might be calculated. Each tenancy is different, so specialist advice should be obtained.
For more information