ExerciseNZ regrets New Zealand Government's failure to pass commercial rent laws

The Exercise Association of New Zealand (ExerciseNZ) has expressed its concern that with proposed rent laws having not been passed as legislation by Parliament there has been no help for commercial property tenants since they were hit by the Coronavirus pandemic.

With gyms and fitness facilities across New Zealand have faced extreme financial pressures during COVID-19, in part because of no rent relief when they have been closed weeks on end, ExerciseNZ Chief Executive, Richard Beddie has today highlighted one Auckland landlord who has tried to impose a 51% increase in a fitness facility’s rent since the pandemic hit.

Stating that such action is “unacceptable”, Beddie advises “I challenge any government minister to debate the issue. The situation for commercial tenants does not work and it means many small businesses will go under because of the lack of action from government. This is particularly the case for businesses like gyms that have to fully close at alert level three.

“The case of the 51% rent hike is unreasonable and predatory behaviour in the current economic climate.

“If a landlord doesn’t agree to rent waivers to assist businesses and the business doesn’t pay full rent, the landlord can issue notice for the tenant to be removed.

“None of this can be stopped unless the government legislates, so any talk about what commercial landlords can to do to help tenants is toothless.”

The case of the Auckland gym has been difficult as it was closed for seven weeks in April and May and is closed again, until Alert Level 3 is lifted. Their revenue has been well down since 1st March, mainly due to members cancelling.

Beddie says their landlord issued the notice of a 51% rent increase at the end of April, during the first lockdown while the business was closed.

Expressing concern that the New Zealand Government’s announcement on 3rd June of support for businesses has not happened that set out “to resolve rent disputes, ensuring there is appropriate rent relief with burden shared by landlords and tenants”, Beddie added “the proposed amendment to the Property Law Act required a fair reduction in rent where a business has suffered a loss of revenue because of COVID.

"We will now make it a very clear and expressed intention that, if fitness facility tenants identify a downturn in their capacity and turnover, then they should fairly expect that to be reflected in rent relief."

He cites that in the Australian state of Victoria, nearly 26,000 agreements for reduced rent have been registered with Consumer Affairs Victoria in the past four months.

Beddie went on to say “before COVID, this particular Auckland gym facing a 51% rent hike was a strong business. There are probably some other situations across New Zealand but there needs to be equity and fairness. The Government must right this for the benefit of all Kiwi commercial tenants.”