NZ First said to have pulled support for Covid-19 commercial rent legislation

New Zealand First is said to have pulled support for a bill aimed at forcing landlords to negotiate rent relief with tenants hit by the impacts of Covid-19, at least in its current form.

This week Justice Minister Andrew Little was due to bring the Property Law (Leases Affected by Covid-19 Outbreak) Amendment Bill to the House.

The legislation, which would set out the type of relief qualifying businesses which had seen a “material” hit as a result of the Government’s response to Covid-19 could expect from landlords, by inserting an “implied clause” into the Property Law Act.

If a deal could not be agreed, tenants would be able to force landlords into arbitration, which would be subsidised by taxpayers.

But the bill is not on the latest version of Parliament’s Order Paper for Wednesday and multiple sources say NZ First has indicated it will not support the legislation in its current form.

Although negotiations between Labour and New Zealand First leadership were continuing last night – not necessarily on the issue of commercial rent relief – some MPs described the proposal agreed by a Cabinet sub-committee at the start of June as “dead”.

One of NZ First’s major donors, Caniwi Capital executive director Troy Bowker, claimed that the party had won a victory over Labour.

“This proposed legislation would’ve given windfall gains to large multi-national tenants who did not need rent relief at the expense of small, New Zealand landlords.”

Bowker, who claimed NZ First had been “played” by Labour earlier this month in agreeing to Little’s proposals, owns a number of commercial properties.

The origins of the issue date back to April, while New Zealand was still under lockdown and many businesses were unable to operate.

Little announced on April 29 that the Government was looking at “options to support New Zealand businesses with rent payments as they face the economic impacts” of Covid-19.

But the plan hit a block when NZ First indicated it could not support the plan Little circulated to ministers at the start of May, Little would later confirm.

Over weeks, Prime Minister Jacinda Ardern and Finance Minister Grant Robertson continued to promise that an agreement was coming while also suggesting that most leases included provisions which offered relief and even that in some cases landlords were more vulnerable than their tenants.

A deal was eventually thrashed out with help from Stuart Nash, who told NewstalkZB he was working in his capacity as the Minister for Small Business.

The paper Little took to a Cabinet sub-committee would have offered relief to New Zealand-based businesses with no more than 50 employees, with clarity that businesses which had an overseas head office would not qualify.

However for reasons which remain unclear, the decision which came out of the meeting was significantly different, “has 20 or fewer full-time equivalent staff per lease site”.

This appeared to mean many businesses which operated across multiple sites – especially retailers – could potentially qualify.

A consultation draft of the proposed legislation which was circulated to the industry last week could have been even broader, with a review by one lawyer suggesting it could apply to virtually any lease in New Zealand because the wording meant a tenant, however large, could apply for relief if the lessor of the property (the landlord) had no more than 20 staff.

The draft legislation has not been released publicly yet.

No one from New Zealand First or Labour would comment on the situation last night.