KiwiRail forced to repay commercial tenant after chasing extra rent during COVID-19 lockdown

The Prime Minister has called for compassion, but a Government landlord has been acting with anything but: KiwiRail has been forced to repay one of their commercial tenants after chasing them for a rent increase during the lockdown.

The Mallia family has been making showers for the better part of 50 years, today employing 30 staff, across three sites around Christchurch. But Nick Mallia is struggling to pay rent with no income stream during the lockdown.

"We're asking for help and we need it as soon as possible," he told Newshub.

But Mallia has received the opposite from his Government landlord.

On March 5, state-owned KiwiRail wrote to Mallia informing him of a routine 2 percent rent increase. On March 23, the Prime Minister announced a lockdown. So, the first thing Mallia did on March 24 was email all three of his landlords to ask for rent relief.

Mallia told Newshub the reason behind his request was "just to make it that much more likely that we'll survive and keep paying the wages for our staff".

His email said, "Our business will be facing severe financial hardship... I am requesting a rent holiday... we hope that you will demonstrate some flexibility and compassion".

His two private landlords stepped up: One offering a month free, while another offered a 50 percent discount for the next two months.

"That's made a huge difference because that saving, in conjunction with the wage subsidy, means that we can keep paying our staff and hopefully means we'll be able to survive."

But there was no budging from KiwiRail.

A week after Mallia asked for help, he was simply told, "KiwiRail is currently reviewing our leases and seeking advice on providing the option of rent relief."

The next day he Mallia paid rent, and three days later he got this: "Please note your rent has increased... can you please pay the arrears of $84.33."

Mallia told Newshub: "We're trying to scrape through here and support our staff and their families so that was a bit of a kick in the teeth, actually."

ACT leader David Seymour said KiwiRail should apologise for "being so far out of spirit".

Prime Minister Jacinda Ardern wants compassion during the lockdown. She said on Tuesday there are "no exceptions for the Government".

Mallia said his definition of compassion is "not reminding a tenant that they've missed $85 from a scheduled rent increase".

KiwiRail responded saying the increase had slipped through the cracks - as had others - but they're now looking to reimburse tenants they charged extra. 

"Our normal process is to notify a month in advance of any change," a statement to Newshub from Kiwirail group Chief Executive Greg Miller said. 

"KiwiRail had at the beginning of March, before the impact of COVID-19 was fully felt, notified some tenants of April 1 increases.

"We are now in the process of identifying those tenants and reversing those rental increases. We are currently aware of a request for a refund of $84 which we will credit to the tenant.

"We are very conscious of the impact that COVID-19 is having on businesses, including our own, and we will play our part in providing support on a case-by-case basis."

KiwiRail told Newshub it would be calling Mallia to apologise.