The Government is proposing new measures under urgency to support both residential and commercial tenants impacted by COVID-19 restrictions.
To help commercial tenants struggling to make rent payments when their sales are hit by forced closures during escalated alert levels, amendments to the Property Law Act are proposed to allow a clause inserted into commercial lease requiring "fair proportion" of rent to be paid instead. It would be on the landlord and tenants to agree on what is considered "fair". Mediation is proposed to deal with disputes.
Once the law is passed, the clause will take effect from 28 September 2021.
Moreover, amendments to the Residential Tenancies Act are proposed to protect residential tenants.
The legislation will allow restrictions against residential tenancy terminations to be turned on and off by Ministerial order in response to Alert Level 4.
This law change is designed to bring clarity and certainty to both landlords and tenants in unusual but difficult COVID-19 conditions.
- Similarly to the rule introduced in 2020, landlords would not be able to terminate tenancies if the restrictions are turned on by Ministerial order (except in limited circumstances).
- Existing ending tenancy notices will not be cancelled but postponed until after the restrictions lift. The notice period will continue to run while restrictions are in place.
- Landlords will still be able to apply to the Tenancy Tribunal to terminate a tenancy for significant anti-social behaviour or substantial damage.
- Rent increase freeze is NOT considered as part of the bill.
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