Business and Company Law Advice

Linwood Law advise a number of small and large businesses on commercial issues, including the structuring of a business, the buying and selling of businesses and commercial property.

Our services also include leasing, franchising, terms of trade and supply and finance including lending and security documentation.

COVID-19 and Commercial Leases

Recently, the Government has introduced some changes regarding commercial leases. Though these interventions are less drastic than many were expecting, they will still have a significant impact on many businesses.

The crucial changes are summarised below:
Previously, landlords could cancel leases after these conditions had been satisfied:

  • The tenant had failed to pay rent for 10 working days. This period has been extended to 30 working days; and
  • The tenant had been served noticed of this breach by the landlord for 10 working days. This period has also been extended to 30 working days; and
  • The tenant had failed to remedy the situation.

Apart from the altered deadlines, then, the conditions for the cancellation of leases remain the same.

It is important to note that landlords are permitted by law to serve a tenant a default notice before the tenant has been in default for 30 working days. As a result, it is possible for the default and notice periods to be concurrent rather than consecutive.

These changes apply retrospectively to all lease cancellation notices served on or after 8 April 2020.

It is the New Zealand Government’s intentions that these extensions will enable productive negotiation between landlords and tenants with respect to any difficulties that arise, or have arisen, as a result of COVID-19. However, we understand that uncertainties remain for many commercial landlords and tenants

If you have any questions about how these changes might affect you and want legal advice from one of our team, feel free to call us on 03 3892121 or contact a member of our Business Law team below.

NB: Please note that the above is a general overview of the topic and is not advice. Every situation is different and would require advice tailored to the individual.

specialist team members

Jerome Williamson

Director

Email Jerome

Paulette Cavanagh

Director

Email Paulette

Peter Richardson

Consultant

Email Peter