There are no winners in the commercial rent scenario, the tenants many of which have had to shut the doors nor the owners who have a loan and outgoings to pay. The federal government outlined what they expected was the right thing to do in a media release. Later they tied it to the JobKeeper eligibility requirements yet left it to each state to mandate.
We now have a Code of Conduct – https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf
The objective of the Code is to share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to appropriately balance the interests of tenants and landlords. So what does this mean?
- Landlords can’t terminate your lease
- New agreements to rent payable is proportionate to the downturn of the tenant
- Reductions in rent payable can be in the form of waivers (minimum 50%) and deferrals
- Payment of rental deferrals by the tenant must be amortised over the balance of the lease term and for a period of no less than 24 months
- No fees, interest or other charges should be applied with respect to rent waived
Good luck in your negotiations
