Government sets aside $40m to support commercial rent dispute resolution

The New Zealand government has set aside $40m to support commercial rent dispute resolution, Justice Minister Andrew Little announced on 30 July.

The government had announced its plan to allocate a funding package back in June. The funds will be used to help local businesses and landlords with mediation and arbitration expenses as a result of COVID-19-related rent adjustment disputes, improving access to arbitration.

“It is critical that businesses who have not reached an agreement be assisted to find a solution that will help New Zealand recover from the economic impacts of COVID-19,” he said.

Little said that the funding also covers mediation for “commercial landlords and tenants whose leases do not provide for a reduction of rent in the event of an emergency.” It can also be applied to “arbitration on existing contractual terms, or to access subsidised mediation.”

“This funding will ensure that tenants and landlords, even if financially constrained, will be able to access dispute resolution services,” he said.

Little acknowledged that New Zealand First did not support the government’s proposed legislation or its action.

“However, I think we have reached a good solution that will be of assistance to many small businesses across NZ as they face the ongoing economic effects of COVID-19,” he said.

The government will be able to serve applicants in eight weeks’ time, with more details on eligibility and subsidy availability to be provided on the Ministry of Justice website.

“I continue to encourage businesses and landlords to work towards reaching a fair agreement on the payment of rent and using this funding to access mediation and arbitration services if that helps,” Little said.

In June, the government had implemented a change to Property Law Act that requires a fair reduction in rent to be made if a business has lost revenue due to the COVID-19 pandemic.