TENANTS OF THE CITY.

Dominion, Volume 6, Issue 1680, 21 February 1913, Page 8

TENANTS OF THE CITY.

RENTS & LEASES. * THE DEMAND FOR BETTER TERMS. ' It was mode plain to a reporter who interviewed'a'liumbsr ot' corporation leaseholders yesterday that iis a class they aro determined to;make a big effort to secure better conditions of. tenancy than hre dilated to tlieni at present, Evidently the opinion" is universal amongst the leaseholders that.the corporation is demanding unreasonably high rents and that a tenure under whiclra leswe must either pay the rent demanded nr abandon his-buildings without compensation is absolutely inequitable. The opinion was freely expressed that unless these conditions wero amended the commercial progress of the city would be seriously retarded. "These considerations," one leaseholder remarked, "do' not apply only to tho Wellington Corporation leases, but to those of practically' all tho corporations, harbour boards, and other public bodies of. the Dominion. The leases granted by corporations in general are practically the same as those wo grant under tho Publio Bodies Leading Act of 1908. Tlio main trouble that we have," he continued, "is that supposing tho-rent fixed is too high, you have either got to pay it for the next, fourteen years or elso fliiifj your building away. That is too big a risk. The Court of Appeal lias held that it is tho duty of the arbitrators every fourteen years when they aro assessing rentals, to look at tho land as if there was no building upon it, and then find out -what a prudent man would give for tho term of U years,know- | ing tho terms of the lease. Among tho risks that the lessee has to run is that of losing his improvements.at the end of the H years' term. lie also knows that tho time may come when tho building is unsuitable for tho site. That is to sa'y,:tho corporation may say : 'Yon have got a warehouse, you ought to have offices.' or 'You have offices,'and'ought", to have a shop.' A prudent mau taking up a lease must therefore try to look 14 or 28 years ahead and calculate what expense he may be put to in altering his buildings. Then he has to consider, what ijdditional rent, burdens may bo imposed, what arc going to bo his outgoings,, and what rental .or income lid is going to receive. After taking all these things into consideration, 'he lias to determine what ! rent lie can pay. The arbitrators, however fair they may bo, must necessarily do a great deal of guesswork, and consequently lessees never Knowhow much their rentals will be put up at tho end of any period. , "One of the most important things that wo have to consider is the' question of finance. . Now, the financial institutions, like tho lessees, are beginning: to find out what these leases are, and they will be very chary about lending unless the Iwrrowers themselves aro particularly .'good' people. Unless you can get leases .on fair terms as between landlord and tenant, the city must go back." Various other points' wero raised by leaseholders who were approached. It was pointed out that the leases. were based .upon'a tenanre which answers 'rcry well in citic-s in the Old Coimtry, where <values and conditions generally are.'settled. Here, on the other hand, it was contended, values to an extent/ at anv •rate,' are fictitious. . Isolated freehold sections in leasehold areas' have realised fancy prices in .recent years, and it is claimed by ; tho leaseholders that a few sales of this character have influenced th.« valuers appointed to deal with leasehold areas'falling in. This is considered absolutely wrong. Here : and there a firm cnu afford to pay a big price, for a freehold!: Site. . The. nature of ifsbusfnoss may enable it - to-do'so in' the first instance,; and in addition the freehold has a prospective value which dops iiot attach to a leasehold. ! The freeholder ospanes the, iiiipo'ritipn of fnthrg .financial burdeiis '■ in .the ; shape of ground rent,, and benefits . by l nny,' increase in value, Tho leaseholder can look'to no such exemptionl! or benefit because he has an i.nnrenseil around rent in prospect., •Aonrt jfrbiri the. question" iof" 'rpnts in' aspect; fill are insistent'.)#' rhojr; "demand tion for imp;oveihents'as an alternative to paying the-rent dcinnnded by the corporation after a revaluation.

. Numbers of the city tenants, it is froely stated, a-e losing large smns on their buildings. That is to fay, oftfr taking .account of the sums they receive from sub-teniiit>?, and estimating whnt they would havo to pay at ■any. given time foi accommodation 'similar'fo that which they occupy, they find that the annual ground ■ rent which they havo to pay. plus 'reasonable 'interest'on the cost of their buildings;'to the,corporation is considerably., in., excess of: theso amounts combined. : : • . .