Abatement and Extended Timeframes in Leasing

April 19, 2022

in COVID-19,Litigation & Dispute Resolution,Property

With the challenges of COVID over the last couple of years, there are a lot of tenants in need of help to keep going.

There are others who may not really need the help, but see an opportunity to get a discount on their rent.

And the opposite side of the coin is true for landlords.

Nothing new so far – so what?

It means more risk for landlords in looking to enforce or cancel a lease.

Landlords could find themselves in Court – with all the time, cost, and continuing lost rent that involves – trying to convince a Judge why their statutory demand or notice of intention to cancel should be upheld.

Why?

A legal concept called abatement. Some leases, especially newer ones, provide for it in their terms. There is also a form of the concept that might or might not apply regardless of the lease.

If abatement applies, it has the potential to reduce the rent payable under the lease regardless of what a landlord thinks should happen.

Generally speaking that means you can’t issue a statutory demand because there will be a real dispute about how much rent is payable, and for the same reason you might not be able to rely on a notice of intention to cancel lease (also known as PLA notice) either.

Something else to bear in mind is that the Governments legislation in response to COVID includes expanding the timeframes that landlords have to give their tenants to fix a breach of lease before taking action to cancel a lease. You will need to be careful of those timeframes if you’re looking to cancel a lease.

The same risk applies with the expanded timeframes, as with abatement – that you find yourself dealing with expensive Court proceedings in which your tenant says you have acted improperly and caused them no end of harm as a result.

The short point is that these can be tricky situations to deal with and some time spent speaking with your lawyer is well advised.

If you require any advice or further information on the matters dealt with in this publication, please contact the lawyer at Farry Law who normally advises you, or alternatively contact:

Wallace Revell
wrevell@farry.co.nz
09 353 6672

The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry Law does not accept liability for any errors it may contain. 

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