Higher Rents Expected

Press, Volume CIII, Issue 30541, 9 September 1964, Page 3

Higher Rents Expected

(Parliamentary Reporter) WELLINGTON, September 8. Some business tenants taking advantage of the latest tenancy legislation to secure new leases still expect to pay higher rents. This is because those who are at present protected can have their rent determined by

a court on the “present value.” The Tenancy Amendment (No. 2) Bill, introduced in Parliament today changes the basis of rent determination to open market value, which will, in some cases, be higher. The legislation is aimed at preventing the inclusion of “key money” in the rents of those tenants who have to seek a lease ordered by the Magistrate’s Court. Many tenants, expecting the protection of the law to expire on November 19, have

already concluded new contracts with their landlords and will not be affected by the bill. But it seeks to satisfy those who have not only faced landlords’ demands for marketvalue rents in new leases, but also for substantial “key money” on renewal. This practice, in effect, extracts from tenants their own goodwill and is specifically excluded from the new formula by which courts will fix tenancies. Some business tenants in Auckland have refused to pay what they claim to be extortionate demands by landlords and have been holding out, facing expulsion after November 18. Under existing law, they would have had, until November 18, recourse to a court on a question of rentals of tenure. Now, those expecting eviction can seek an extension of tenure for up to three years. Householders in the few dwellings still subject to fair rents control will remain slightly better off than their business counterparts after November 18. Whereas businessmen will have to pay market value rentals, rent-controlled occupants of dwellings pay on the latest Government valuation, which may be 20 per cent below market value.