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Unique procedure to resolve rent relief disputes

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Commercial landlords are continuing to suffer the effects of the Government alert level system and restriction on the use of premises.

Many businesses have seen a seen a return to normal levels of trade since moving to level 2, particularly those in the retail sector where pent up consumer demand has been unleashed all at once.

However, the seven weeks spent in levels 4 and 3 have come at a big cost to almost all businesses.
Data indicates April rent collection was down 59% in Bay of Plenty, with May worse still.

Many landlords and tenants have negotiated rent relief, holidays, or deferrals, but for many this has proved too difficult.

In response to demand from clients, Holland Beckett Law has developed an independent, quick, cost effective, and practical procedure to determine fair rent due while tenants were and are unable to fully use their premises. This is relevant for the period from 23 March 2020 until at least transition to level 1.

The streamlined process involves submission of a claim to arbitration, for determination by a member of our panel of expert arbitrators and QCs. We have found that even just initiating the process often breaks the deadlock and results in an agreement being reached and tenants quickly paying overdue rent.

For those that complete the process, the arbitrator’s decision provides certainty of what rent and operating expenses should be paid by a tenant while unable to fully use its premises.

That decision can then be en- forced (if necessary). The process includes legal advice throughout, will resolve a rent dispute between landlord and tenant, and is certain (both in process and cost).

Now that trading has returned to some form of normality, it is the perfect time to renew negotiations with your landlord or tenant, or to break the deadlock by independent assessment.

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