Changes on the way for commercial lease Covid-19 rent disputes

Author(s): Virginia Bonanni
A woman wearing a mask is sitting at a desk, participating in a video call on her laptop during one of many pandemics lockdowns. The person on the screen is also masked. The desk features potted plants, a notebook, and small decor items, all set in a brightly lit room.

The government has introduced a law change which will imply into commercial leases that don’t have an existing no access in emergency clause, a provision requiring a fair proportion of rent and outgoings to be paid when a tenant has been unable to conduct their business due to the Covid-19 lockdown restrictions. Once the law is passed, it will be backdated to take effect from 28 September 2021.

The law change means that landlords and tenants will need to try to agree on the amount of rent and outgoings that is fair. Parties can also agree that the changes implied by the new law do not apply to them.

If the landlord and tenant cannot agree on what is fair rent and outgoings, any dispute may be referred to arbitration, mediation or expert determination.

The government is no longer funding arbitration or mediation for such disputes, but the New Zealand Dispute Resolution Centre is offering a low cost fixed-fee arbitration and mediation service, and our rules mean that parties will share the costs of the arbitration or mediation service equally.

To find out more about the scheme, FAQs and how to apply, click here.

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