Covid 19: Travel agent has to pay $50,000 to be released from lease

Caroline Imrie of World Travellers Milford is devastated she will have to pay $50,000 to get out of her lease. Photo / Dean Purcell

The owner of a travel agency facing shop closure due to Covid-19, claims she has to pay more than $50,000 if she wants to be released from her lease - with no money back if a new tenant is found.

Auckland woman Caroline Imrie said the option from the landlord - a company owned by retired Auckland heart surgeon Dr Albert Ko - had left her devastated.

"I have worked so bloody hard for the past four years to build this business so to watch it go down the toilet because of an unprecedented global event and then be told I have to find $50,000 is heartbreaking," she said.

"Then to find I will get nothing back even if the shop is leased straight away is unbelievable."

It comes as there were no new cases yesterday and the number of active cases in New Zealand remained at 18.

Imrie had run her business World Travellers Milford from the Kitchener Rd building owned by Wing Chuen Investment Properties Ltd, for four years.

The company is owned by Albert Pak Hong Ko and his wife Emily Ko.

Imrie signed the lease through Gary Seekup, a commercial property manager with Barfoot & Thompson who independently manages Ko's properties.

As soon as Covid-19 hit the travel industry, Imrie contacted Dr Ko through Seekup to see what her options were.

After a lot of negotiating, Imrie said she was allowed a short-term reduction but the terms of that agreement were private and confidential.

When it was clear she could not afford the rent, Imrie said she set about finding a new tenant for the property.

Caroline Imrie said with zero income she has no choice but to shut up shop. Photo / Dean Purcell

She said she found a tenant willing to sign a 20-year lease in five-year blocks but the option was rejected by Dr Ko, through Seekup, because it was a food business.

Faced with having to pay the $50,000, Imrie asked if she would be refunded any money if a new tenant was found after she ended the tenancy.

In an email, viewed by the Herald on Sunday, Seekup said the landlord would accept 12 months' rent and operating costs to release her from her lease.

The email stated there would be no money returned.

When approached by the Herald on Sunday, Emily Ko said her husband was not available and there would be no comment.

Seekup said all correspondence between Imrie, himself, and Dr Ko was private and confidential and he could not comment.

In a text message, Seekup said the information provided by World Travellers "was one-sided, incorrect and misleading and in breach of the Privacy Act".

He declined to comment further.

Imrie said there was no confidentiality clause around the lease exit correspondence.

Commercial lawyer Brent Norling from Norling Law said in his opinion not refunding money if a new tenant was found was unusual.

"That would mean the landlord would be being paid twice ... and he can't do that," Norling claimed.

"He has an obligation to mitigate losses so he can't just sit on his hands and leave the building empty either."

Norling said Imrie and others in similar situations could find relief in the Government's new Property Law Act amendment which required a fair reduction in rent when a business has suffered a loss due to Covid-19.​

"There is also a $6000 grant for arbitration for tenants and landlords who could not reach an agreement."

Auckland Business Chamber chief executive Michael Barnett had been supporting World Travellers Milford in the aftermath of Covid-19.

Barnett commended Imrie for trying to save her business and provide "constructive solutions" with the landlord.

"World Travellers Milford identified a tenant who was prepared to sign a five-year lease with rights of renewal," Barnett said.

"They didn't have to do this and the owner turned down the guaranteed income for a decade because he didn't want a food-related tenant."

Barnett said the landlord "might have them by the letter of the law but most would have difficulty accepting his fairness".

Imrie said she was "in tears at least twice a week" and felt helpless as her business was decimated by the impact of the pandemic.

She said at a time of global crisis "when Prime Minister Jacinda Ardern was encouraging kindness" she thought the correspondence she had received "was cold".

"If there had been some understanding or empathy it would have been easier to take," she said.

"I am losing the shop I love and have worked hard to build, and it's heartbreaking to be treated like that."