Property owners, managers, and developers willing to share burden
The New Zealand property sector is calling on the government to rethink its amendments to the Property Law Act that would most likely impact landlords and their tenants.
A recent study accompanied a letter to Prime Minister Jacinda Ardern signed by 24 of the country’s largest property owners, managers, and developers in response to the recent announcement proposing the amendment.
It found that some of New Zealand’s largest property owners have helped local businesses by subsidising them to more than $320 million during the COVID-19 lockdowns, which The Property Council of New Zealand (Property Council) said provides evidence of the sector’s willingness to share the burden of the pandemic.
“The fact is the market has already risen to the challenge of COVID, supporting vulnerable tenants and negotiating fairly as we rode this wave of change,” said Property Council chief executive Leonie Freeman.
She also warned that imposing a clause without agreement might only “jeopardise the goodwill that landlords and tenants have created.”
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In the letter, the Property Council indicated that the sector acknowledges the proposal’s intention that the retail and hospitality sectors will receive equitable rental relief from their landlords. As a result, its members have proactively shared that pain by providing rental relief to these sectors.
However, the council warned about the proposal’s significant and widespread application beyond the intended beneficiaries by changing all commercial leases.
“In many cases, the businesses which will benefit have much greater financial strength than the landlords who will be impacted. The proposal, as currently drafted, with its wide application to commercial leases, would entitle the major Australian-owned banks to claim rental relief from their New Zealand landlords, despite the pandemic restrictions having little or no impact on those banks’ profitability,” Freeman said.
“We do not believe this is the government’s intent and call for the proposed legislation to be amended to support those businesses most in need.”
