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LETS GET DOWN TO BUSINESS.

Question :
Good morningi work in Wellington for the NZ Red Cross for a small team called Pathways to Employment, supporting former refugees to get into employment.I’m writing on behalf of a client of mine (with his permission), who began a small food business on the Terrace in August 2019. He has remained on a partial benefit, as he was only covering his costs, but hoped to become fully independent this year. He was able to employ a part-time staff member, and applied for, and received the wage subsidy for her. His issue, as with many others, is continuing to pay his rent. He has contacted his landlord, who has offered him a 50% reduction during the lock down period, and managed to scrape together enough to pay his rent for this month, but won’t be able to continue .He has sent me a copy of his lease but it doesn’t have the clause (27.5) about his inability to access his property that I’ve seen discussed in the media. His lease is with the Radnor group,and includes the contact details of his landlord.  I have suggested he contact his lawyer, but he is worried about the costs he might incur, and as English is not his first language, the finer points of legal advice are difficult for him to comprehend.He has worked incredibly hard to bring his dream to fruition, so any suggestions you have to help him would be gratefully received.Thank youMarian Petrie

Question submitted 06/04/20 @ 09:30am
Industry: Food & Beverage
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  • There are other business support mechanisms avail from govt -check out the small business loan programme (via the Covid-19 site)

    On legal, would be worth quick consult with someone at Simmonds Stewart or Avid legal (Bruno Bordignon)

    Ultimately he will need to agree solution with landlord, and helpful to have legal advice and other resources in your corner as you negotiate with landlord

    Hello Marian, this is not an isolated case and all retailers on a lease will be having similar concerns. The reality is, is that landlords will continue to need tenants when the crisis has passed. It is far more efficient for landlords to hold onto current tenants than look to find new ones. Hence your client is perhaps not in as bad a situation as she/he thinks. In the initial instance I would recommend your client continues to discuss the situation with their landlord and seek a further lease holiday. Radnor may come back and agree to this on the basis that your client pays an increased leased in the future when the business is back on their feet.

    As an aside, it is starting to appear we are getting on top of CV19 and it may be just a matter of weeks now before level 4 is lifted so encourage your client to hang in there and reach out to MBIE to understand other ways they maybe supporting businesses.

    Good luck

    Happy to have a look at the lease on a pro-bono basis to see if there is any room to move. Based on the above, my suspicion is not (but happy to check). Agree with all the comments above – the best solution is likely to be a commercial one. Many landlords have accepted a deferral of rent (i.e. he pays nominal rent for a period, and then makes it up once lock down eases). Could that be an option here?

    Hi Marian. So good of you to be offering this help and taking such an interest in one of your clients. In addition to all the points above, can you let us know the size of the problem. What is rental commitment?

    Evening Marian… also further to the above… how big are the premises? what is he currently manufacturing and % utilisation of the space? Ie. what time of day and week is he using the space exclusively? Keen to understand if he could potentially collaborate and sub lease with someone? CC

    Marian,

    Your programme is fantastic and well done to you and your team in supporting amazing new businesses like your clients. I know his place on The Terrace and I really hope that he will be able to continue post Covid-19.

    This situation is a really familiar one, with even new rental agreements not having the non-access clause in them. I agree with the other advice given above and would also add to tell your client to explain to his landlord the impact of his business, if he has not already. Can he think about offering something in kindness to the landlord, post lockdown?

    Also, there is a great new site supporting Wellington small businesses during lock-down. Check out https://www.indiewellington.com/ and maybe help your client register on the site. Let us at Ākina know and we can share the link on social media as well!

    I really hope your client gets through these tough times.

    Ngā mihi nui,

    Louise

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