Green Party proposes rental auctions for vacant commercial spaces

The Green Party has announced a policy to fill vacant city centre shops and lower commercial rents for small businesses. If elected in November, the party intends to allow local councils to auction leases for commercial spaces that have remained empty for more than a year. Under this proposal, landlords would receive an eight-week grace period to find a tenant before the council can step in to auction the lease.

The policy includes a plan to reform market rent reviews for businesses with an annual turnover under $30 million. The Greens aim to remove 'ratchet clauses' that prevent rents from decreasing during reviews. Any new limits on how much a rent can fall must match the limit on how much it can rise. Additionally, the party wants to ban rent reviews that can only be triggered by landlords.

A third part of the proposal involves creating a low-cost pathway for commercial lease disputes. This could involve the Tenancy Tribunal, the Disputes Tribunal, or a new dedicated body. For rent-review disputes, the party suggests using final-offer arbitration where an adjudicator chooses between the figures submitted by each party.

Co-leader Chlöe Swarbrick noted that the policy aims to support vibrancy in cities following years of construction and disruption from the Auckland City Rail Link. Landlords would be permitted to appeal council auctions if they plan to redevelop the premises or intend to occupy them personally.

Where reports differ

• One report notes that Property Council New Zealand's 2025 standard lease includes a hard ratchet for every rent review, while another identifies the ratchet clause as a general feature of many commercial leases

Compiled from reports by Stuff, NZ Herald, The Post and 1News.