Frequently asked questions about arbitrating and mediating lockdown related commercial rent and lease disputes.
When is the subsidy period?
The subsidy period applies for six months from 25 September 2020. To access the subsidy a qualifying dispute must have seen the mediation or arbitration process start within the subsidy period.
What is a lockdown period?
A lockdown period is defined as a period when COVID-19 Alert Level 3 or 4 has been declared nationally or in the region where the lease site in dispute is located.
Does my dispute qualify?
During the subsidy period, parties are eligible to receive subsidised arbitration or mediation services if:
The dispute is about:
- the payment of rent and outgoings where the lessee to the lease has experienced a material loss of revenue during a lockdown period because of government restrictions put in place to combat COVID-19; and
- the payment of rent and outgoings during the relevant lockdown period has not previously been the subject of an agreement or arbitral award between the parties to the dispute.
And at least one of the parties meets the eligibility criteria:
- New Zealand based; and
- Have 20 or fewer Full-Time Equivalent staff:
- in the case of the lessee, per lease site;
- in the case of the lessor, in total.
Applicants must not have previously accessed subsidised mediation or arbitration services for the dispute in question.
More information is available on the Ministry of Justice website or you can get in touch with the FairWay team (0800 77 44 08) to find out if you qualify.
What does New Zealand based mean?
This means a business must be registered and operating in New Zealand.
The business must be:
- registered with the New Zealand Companies Office
- physically located in New Zealand, and
- its employees legally work in New Zealand.
Sole traders are not required to be registered with the New Zealand Companies Office, but must have:
- a personal IRD number for paying income tax and GST
- government licences and permits for their business needs, and
- qualifications or registrations for their trade or profession.
Do I need to demonstrate a material loss?
To qualify, you must be able to demonstrate a material loss. This can be demonstrated by, for example, a significant decline in revenue or having received the wage subsidy.
What does Full-Time Equivalent staff mean?
For the purposes of calculating the number of full-time equivalent staff, a full-time employee works an average of 30 hours or more per week and a part-time employee works an average of less than 30 hours per week.
Do I need a lawyer?
You do not need to have a lawyer represent you during arbitration or mediation. However, you may wish to seek your independent legal advice and lawyers are welcome to participate in the process.
There is no cost for mediation. The service is fully-funded for eligible disputes.
Parties can come to their own agreement around sharing the cost of arbitration.
A subsidised service is available as part of the Government’s economic response to the pandemic. The fixed-price for arbitration is $8,000 – with the Government funding $6,000 towards the costs. The remaining balance of $2000 is payable by landlord and tenant, who can come to their own agreement around sharing the cost of arbitration.
Is arbitration binding?
Yes, the arbitrator’s decision is final and binding on the parties.
How quick is it?
A mediator can be appointed quickly, and the mediation session itself is usually scheduled for half a day.
Arbitrations must be completed within 50 business days and can often be completed in a matter of weeks.