Hon Andrew Little
Minister of Justice

Government to subsidise arbitration and mediation to resolve commercial rent disputes

The Government is allocating $40 million to assist with the cost of mediation and arbitration for New Zealand businesses and landlords to resolve issues about adjusting rent as they face the economic impacts of COVID-19, Justice Minister Andrew Little said.

The Government had previously announced funding to improve access to arbitration in a timely and cost-effective way to support small or medium businesses to reach agreement on a fair rent.

The funding will now also cover mediation for commercial landlords and tenants whose leases do not provide for a reduction of rent in the event of an emergency.

“It is critical that businesses who have not reached an agreement be assisted to find a solution that will help New Zealand recover from the economic impacts of COVID-19,” said Andrew Little.

“This funding will ensure that tenants and landlords, even if financially constrained, will be able to access dispute resolution services.

“New Zealand First do not support the previously proposed legislation and they do not support this action. However I think we have reached a good solution that will be of assistance to many small business across NZ as they face the ongoing economic effects of COVID-19.

“I continue to encourage businesses and landlords to work towards reaching a fair agreement on the payment of rent and using this funding to access mediation and arbitration services if that helps,” Andrew Little said.

Further detail about eligibility for and availability of the subsidy will be made available on the Ministry of Justice website, and the service will be up and running within 8 weeks. This funding can be used for arbitration on existing contractual terms, or to access subsidised mediation.

Notes to editors:

This scheme could be accessed by businesses that met the previously announced terms, that they;

o Have 20 or fewer full-time equivalent staff per lease site

o Are New Zealand based

o Have not already come to agreement with their landlord

As the Government will not be progressing legislative change, this would be a voluntary scheme of subsidised mediation.

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