Laws not passing no help for commercial tenants

ExerciseNZ chief executive Richard Beddie. Supplied image.

New government proposed rent laws have not been passed so there has been no help for commercial tenants since they were hit by the Covid pandemic, ExerciseNZ chief executive Richard Beddie says.

Some gyms and fitness facilities across New Zealand have faced going under during Covid, in part because of no rent relief when they have been closed weeks on end.

One Auckland landlord is even trying to impose a 51 per cent increase in rent after the pandemic hit which is unacceptable, says Richard.

“I challenge any government minister to debate the issue. The situation for commercial tenants does not work and it means many small businesses will go under because of the lack of action from government. This is particularly the case for businesses like gyms that have to fully close at alert level three.

“The case of the 51 per cent rent hike is unreasonable and predatory behaviour in the current economic climate.

“If a landlord doesn’t agree to rent waivers to assist businesses and the business doesn’t pay full rent, the landlord can issue notice for the tenant to be removed.

“None of this can be stopped unless the government legislates, so any talk about what commercial landlords can to do to help tenants is toothless.”

The case of the Auckland gym has been difficult as it was closed for seven weeks in April and May and is closed again, until level three is lifted on Sunday night. Their revenue has been well down since March 1, mainly due to members cancelling when they lost their job, says Richard.

He says their landlord issued a notice of a 51 percent rent increase at the end of April, during the first lockdown while the business was closed.

The government announcement on June 3 of support for businesses has not happened “to resolve rent disputes, ensuring there is appropriate rent relief with burden shared by landlords and tenants.

“The proposed amendment to the Property Law Act required a fair reduction in rent where a business has suffered a loss of revenue because of Covid.

"We will now make it a very clear and expressed intention that, if fitness facility tenants identify a downturn in their capacity and turnover, then they should fairly expect that to be reflected in rent relief."

In Australia, nearly 26,000 agreements for reduced rent have been registered with Consumer Affairs Victoria in the past four months.

“Before Covid, this particular Auckland gym facing a 51 per cent rent hike was a strong business. There are probably some other situations across New Zealand but there needs to be equity and fairness. The government must right this for the benefit of all Kiwi commercial tenants,” says Richard.

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