Commercial Tenancy Disputes: Complete Guide

The Residential Tenancies Act 1986 does not apply to commercial leases. There is no Tenancy Tribunal for commercial disputes, no prescribed notice periods, and no statutory rent increase formula. The rights and obligations of landlord and tenant are determined almost entirely by the lease document.

Most commercial leases in New Zealand use the ADLS lease form (Auckland District Law Society), which is a standard template negotiated between the parties with bespoke additions. Understanding what the ADLS form says by default — and where your lease departs from it — is essential context for any dispute.

Rent Review Disputes

Commercial leases typically include periodic rent reviews — to market rent, CPI, or fixed increases. Disputes arise when landlord and tenant disagree on the market rent or when one party believes the review mechanism was not followed correctly. Most ADLS leases have a formal dispute process for rent reviews, often including independent valuation.

Lease Renewal Disputes

Tenants with a right of renewal must exercise it correctly and within the timeframes specified in the lease. Disputes arise when a tenant misses a notice period, or when a landlord refuses to honour a renewal right the tenant believes was properly exercised.

Breach of Lease

Either party may breach the lease — a tenant by failing to pay rent or maintain the premises; a landlord by failing to maintain the building or interfering with the tenant's quiet enjoyment. The appropriate remedy depends on whether the breach is remedied, the severity, and the lease terms.

Dilapidations at End of Lease

At the end of a commercial lease, the tenant is typically required to return the premises in a specified condition. Landlords often claim for reinstatement works or cleaning; tenants dispute the scope or cost. These end-of-lease disputes are among the most common in commercial tenancy law.

Commercial tenancy disputes follow the dispute resolution mechanism in the lease, which typically follows this path:

When a tenant breaches a commercial lease — most commonly by failing to pay rent — the landlord has several options. The Property Law Act 2007 governs the exercise of most landlord remedies and imposes procedural requirements that must be followed to avoid the remedy being invalidated.

Options include: issuing a notice to remedy specifying the breach and giving the tenant time to fix it; re-entry and termination of the lease (subject to strict procedural requirements); or pursuing the tenant for unpaid rent or damages without terminating. Many landlords prefer to pursue unpaid rent rather than terminate, particularly where the tenant's business has value and the lease is otherwise performing.

Commercial tenants have fewer automatic protections than residential tenants, but important rights nonetheless. A tenant whose landlord interferes with quiet enjoyment — by accessing the premises without notice, disrupting services, or failing to maintain the building — has a claim in breach of contract and potentially in tort.

Tenants facing a notice to remedy or a threatened termination should take legal advice immediately. The Property Law Act gives tenants the right to apply to court for relief against forfeiture, even after re-entry, in certain circumstances. Acting quickly is essential — delaying legal advice after receiving a notice significantly limits the options available.