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LETS GET DOWN TO BUSINESS.

Question :
Any ideas if the government will provide financial support/assistance to tenants to assist them with meeting rental/opex payments during the period of the shutdown?  Our landlorad has not given us any breaks at all and is pushing to increase rents and the only thing the landlord has said is that in the event of non-payment should government give support the entirety of that support will need to transferred to them.  Just want to hear from anyone about what assistance tenants can take advantage of.

Question submitted 23/04/20 @ 02:44pm
Industry: Tourism
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  • There has been no commitment from the government to assist with commercial rents. There is plenty of advice around and some good articles in the news, e.g. this one:

    https://www.newsroom.co.nz/2020/04/21/1137725/does-clause-275-apply-in-level-3

    My advice: talk to your lawyer, talk to your landlord, and don’t agree to anything.

    Stay safe.
    Matt

    Hi there. Matt’s advice is sound. The Government has been lobbied by various industry participants to provide some sort of rental subsidy for tenants in this situation, but it has to date only said it is “considering the options”. If you have a right in your lease to a rent and opex abatement, then I suggest having another conversation with your landlord and seeking legal advice if they refuse to engage. If you have not got such a right in your lease, then you are relying on the good faith and will of your landlord. We find that a tenant’s best chance of success is to approach the landlord with a “we’re all in this together” approach rather than taking a hard-line stance and/or demanding an abatement. I am not sure what kind of business you are and what kind of premises you are in, but the landlord may not find it easy to get another tenant in, and for some landlords this is a good motivator to coming to an arrangement with their tenants during Level 4 and 3. We are seeing many landlords agreeing to defer rent (in situations where the tenant does not have a right to claim rent abatement). This will not make the obligation to pay go away but may give you some breathing room in the interim. Take care.

    Hey there – I am sure we can get one of our lawyers to have a look at your lease agreement, pro-bono if that helps – it does however not feel great the way the relatoinship sounds – your landlord should be a partner in your business, and rise and fall with you when things are good, and when they are tough they should be there for you – other advisors on the platform have had some ideas for other tenants in this situation ie stopping payments – but it all starts with what your lease terms are.

    Thank you for your help

    @andyadmin thank you for your offer to have a look at the lease pro-bono. Our lease is the 2008 version of ALDS and does not have the 27.5 clause and is a nett nett lease. Hence the dilemma. Would appreciate any help in this matter. Thank you

    Hi. As Andy says, although it sounds like your relationship with your landlord is not good, it may be worth approaching him/her again. Provided the landlord’s intention is to continue leasing the property, it is in their interests to do what they can to assist you through this. But there are also other potential options for you to consider, depending on certain details relating to your lease. I would be happy to talk to you about the options – please email me directly at amanda.spratt@minterellison.co.nz and I can assist further.

    Hi there hope that has helped you – and thanks Amanda for offering to help. Andy

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