Resene Colorshop Masterton was one of more than 40 tenants to receive rent relief from landlord Masterton Trust Lands Trust. PHOTO/TOM TAYLOR
While many Wairarapa businesses grappled with reduced income during the lockdown, some commercial landlords gave their tenants rent discounts to help them weather the storm.
A community-owned property investor and two of the region’s councils reinstated packages from last year’s lockdown to provide tenants with rent relief.
Masterton Trust Lands Trust gave more than 40 commercial tenants discounts of up to 50 per cent rent during alert level 4 this year.
According to its 2021 annual report, the trust had provided $230,000 in rent discounts due to last year’s lockdown.
Trust general manager Andrew Croskery estimated that this year’s discounts for the shorter lockdown would cost about $75,000.
“While this does cost the trust in terms of lost revenue, the long-term success of our tenants is our priority and is critical to the long-term success of both the trust and Masterton’s economic recovery,” Croskery said.
At alert level 3, the trust gave some tenants discounts on a case-by-case basis.
“Some of our tenants could return to work, some provided click-and-collect sales, and some fell under the essential category,” Croskery said.
Longstanding trust tenant Resene Colorshop was one of the businesses that benefited from the trust’s rent relief package.
Resene Paints chief financial officer Mike Durkin said when New Zealand entered alert level 4, the trust had reached out to help.
“Andrew [Croskery] offered us support, which we gratefully received because the shop was closed at the time,” Durkin said.
The store on Queen St had received a 50 per cent discount on rent during alert level 4.
Durkin said about half of Resene’s landlords across New Zealand had offered the company’s stores some form of rent relief. He said the trust had taken a different approach in providing support without being asked.
Durkin described the deal as a “gentlemen’s agreement,” given the trust had no obligation to provide the relief.
A “no access” clause in many commercial rental agreements provided a basis for tenants and landlords to negotiate rent payments in the case of an emergency.
The clause had arisen after the Canterbury earthquakes when many businesses were unable to access their premises.
The definition of “emergency” could extend to the covid-19 pandemic if tenants could not operate due to alert level restrictions.
Because many Resene Colorshop tenancies pre-dated the Canterbury earthquakes, its rental agreements did not include the clause.
Other landlords had offered rent relief to their tenants to varying extents.
A South Wairarapa District Council spokesperson said the council had provided support for three of its tenants affected by the lockdown last year and had advised them that they could receive the same support this year.
Tenants who were unable to open their premises due to lockdowns would receive 100 per cent rent relief.
Masterton District Council had no plans to offer rent relief to individuals leasing council premises.
“The lockdown has been much shorter than that of last year, and the council is not a large-scale commercial landlord,” a council spokesperson said. “It has a very small number of commercial leases, and any relief offered would provide little community-wide benefit.”
A spokesperson said MDC remained open to considering requests from tenants who could demonstrate financial hardship for whom Government measures for relief had not been effective.
Carterton District Council was approached for comment.