I'm not really sure where to start! I've tried to contact a couple of lawyers I've dealt with in the past for Urgent

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Customer: I'm not really sure where to start! I've tried to contact a couple of lawyers I've dealt with in the past for Urgent Advice regarding our Deed of Lease for a Building we lease but am unable to get a response at the moment.
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: I have contacted the lawyers via email with information I am requesting information about and sent through a copy of the Deed of Lease and Buisness and Plant lease along with recent email from our Landlord re the current situation with Covid19
JA: Where is the property located?
Customer: Waikaia, New Zealand
JA: Anything else you want the Lawyer to know before I connect you?
Customer: This is what I have requested from lawyersi have currently been trying to contact. I like many other small businesses around New Zealand are finding this situation very daunting with the uncertainty that lies ahead. I have been looking into figures and seeking guidance regarding the current situation with Covid-19 and things are not looking great for our business moving forward. (we will be coming out of this in the final year of the current lease with no intentions of renewing the lease further ). I have attached a letter we received from our Landlords recently which prompted me to also review our Deed of Leases (Also attached to this email). I have found a few things in there I understand to a certain extent regarding our current situation but would really like some clarification from a professional like yourself. What options do we have regarding this Deed of Lease in relation to Clauses 27.5, 27.6 and 47.1 (d)  No Access in Emergency & Definitions and Interpretation. I would really appreciate it if you could let me know asap what options we have regarding the Deed of Leases and future rent payments in the mean time.
Answered by Chris The Lawyer in 6 hours 2 years ago
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Chris The Lawyer, Expert

Hi
I am a New Zealand lawyer based in Wellington and will help you with your question today. Please give me a minute to read your question
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Chris The Lawyer, Expert

I think you asked this twic, but here is the advice agains

COMMERCIAL LEASES AND NO ACCESS DUE TO LOCKDOWN

The standard form 6th edition 2012 (version 5) ADLS lease contains updated (post Christchurch earthquakes) clauses that deal with the situation where a tenant cannot access the leased premises “to fully conduct” the tenants business from those premises for reasons associated with an emergency (clauses are found at clauses 27.5 to 27.6 of the Lease) and not the fault of the landlord or tenant.

Where there is an Emergency that prevents access to the premises (damage or destruction to the building is not required) then there the clause requires a suspension of a proportion of rent and outgoings because the premises are inaccessible due to that “Emergency” event.

Emergency is defined in clause 47.1(d) of the second schedule of the lease and includes natural or unnatural event that is not caused by the landlord or tenant, that causes, or may cause: Loss of life, serious injury, illness; or otherwise endanger the safety of the public or property.

Such an event includes:

1. an Explosion;
2. serious fire;
3. earthquake;
4. eruption;
5. tsunami;
6. flood;
7. tornado;
8. cyclone;or
9. epidemic

In an emergency situation, a fair and reasonable proportion of the rent and outgoings shall cease to be payable from the date the tenant was unable to access the premises.

As such, with a declared state of emergency because of a pandemic and a lockdown in effect from midnight Wednesday 25th March the suspension of a fair proportion of rent and outgoings would apply from midnight Wednesday, 25th March until the “inability [to access the leased premises “to fully conduct” the tenants business] ceases”.

This aspect of the clause is not linked to physical damage to the building.

That there must be a cessation of rent and outgoings seems clear the question is: what is a fair proportion? - prima facie you would say 100%. There are no guidelines in the lease. This could be negotiated.

Some amounts of Opex (outgoings) such as a proportion of rates and perhaps other outgoings such as for insurance premiums may still be reasonably charged. It could be arguable that - for a warehouse for example where the primary use is storage a proportion of the rent also could be reasonably still charged.

Older or non ADLS leases won’t necessarily contain this clause.
But may have other abatement clauses

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