- COVID-19 Funding & Support
- Is it possible to terminate a commercial lease in light of the significant impact that covid 19 will impact on my retail business, I have personal guarantees and a remaining term.
- Reply To: Is it possible to terminate a commercial lease in light of the significant impact that covid 19 will impact on my retail business, I have personal guarantees and a remaining term.
Reply submitted 16/04/20 @ 12:01pm::
Further information; we are on a bulk retail Property Council type lease, no force Marjeur clause but the ADLS no access clause is added and although we asked at start we only managed to get 9 months no access. The reality is we have negotiated for the next two month through and paid that amount but longer term there will be such a significant reduction in our core retail customers and offering it will mean a sales decline of say 70% for at least the next 12 months. SO we are looking to pivot substantially into more online offerings etc, the bulk retail purpose of the site is not required nor realistic for the foreseeable future. I know we could talk of frustration of contract or the 9 months no access (argument would be no access for what the site is designed). I also understand the landlords situation in NZ too but the rents for existing tenants will not be able to be adjusted faster enough for most tenants; and the reality is small businesses like us will go under with the burden of leases coupled with the obligation of personal guarantees. I note in Australia in some states they have enacted the option for commercial tenants to cancel there lease, is there a chance that would come here? I know this is detrimental to landlords but obviously I’m being selfish and thinking of my business, family and employees in this instance. It would also allow for a stronger bargaining position for tenants versus landlords as right now the landlord has all the power in most cases especially where they have a PG on the lease, very interested in thoughts and then once I get some feedback I will be interested in a more formal chat with a lawyer to work through.
Thanks in advance and for comments already, just wanting to gauge general feedback.