Fair relief for commercial tenants sought

The closure of most businesses for a month has raised the issue of how much rent commercial tenants should have to carry on paying.

One commercial landlord in Wanaka is understood to have discounted rents by 10%, which one of the bigger landlords in Otago and Southland — Allan Dippie — suggested was hardly a fair sharing of the pain.

"I think more the policy would be: can you pay rent at all?

"There is no point putting tenants under such pressure that they fail."

Health and safety adviser John Frampton has called for Queenstown landlords to slash rents for the next month, suggesting a 50% reduction as the starting point for negotiations.

Queenstown Lakes Mayor Jim Boult is encouraging all landlords to consider rent holidays or reductions.

"I spoke with one major commercial tenant [on Monday] who expressed that they’d rather give a break to their tenants and allow them to continue without paying rent on the basis they can start their business again and go forward," he said.

A note of caution was added by Otago Property Investors Association president Kathryn Seque.

While she accepted the importance of conversations between landlords and tenants, and negotiations to avert businesses from "going under", there was the issue of the Government-imposed rent freeze to consider.

While the freeze would not prevent landlords reducing rents, landlords were concerned the reduced rents for the lockdown period might become the "new rent for the rent freeze" and the rent freeze "may go on for over a year", Ms Seque said.

The association of 1000 members had yet to receive clarification from the Government.

"I think that’s what a few landlords are a little bit concerned about."

Landlords had their own businesses to take care of, she said.

They were not entitled to the mortgage holiday granted some homeowners, and Ms Seque advised her members to speak to their banks before making decisions about rent.

Mr Dippie, who had tenants whose businesses were considered essential as well as others that had closed down,

said it was "a matter of working through each situation individually".

One of the unknown factors, he said, was how long each business would be affected.

Those in the health sector would not be affected at all, some would be affected for a month but others, like those in the tourism industry, could be affected for many more months.