There are fears more businesses will go under if landlords aren’t more flexible on rent payments this lockdown.
Coffee Club had three of its franchises close last year, after they failed to reach agreements with landlords over rent payments.
“We just couldn't achieve any reasonable support from landlords at all, without going into an extremely lengthy and expensive legal battle,” the Coffee Club’s Brad Jacobs told 1 NEWS.
“There was simply no way to enforce the landlord to provide rent support.”
He says while the company has had some good landlords, offering discounts or deferred payments, many are simply unreasonable.
He’s among a growing number of people calling on the Government to step in and do more to help businesses with rent payments.
National’s shadow treasurer Andrew Bayly is proposing a system where the Government pays 50 per cent of the rent for a business that loses over 40 per cent of its revenue. He also wants compulsory arbitration, saying mediation simply doesn’t work.
Last year, the Government subsidised some mediation between landlords and tenants.
Bayly says rent is the second highest cost for businesses.
Justice Minister Kris Faafoi says the Government prefers tenants and landlords reach an agreement. He says he’s “open” to doing more, but it’s complex and may risk interfering in private contracts.
Business NZ says the Government needs to realise how serious the issue is – and it’s becoming even more of a problem this lockdown.
“Hospitality and retail in particular will really struggle,” Business NZ’s Kirk Hope said.
While the economy has bounced back, retail and hospitality have struggled, particularly outside malls and big box retail areas.
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