Update:
Commercial Tenancies
1 May 2020
Under section 15 of the COVID-19 Omnibus (Emergency Measures) Act 2020, the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 have come into effect today.
The regulations implement the commercial tenancy principles agreed by the National Cabinet.
The Regulations are available here.
A media release which covers the announcement will be circulated when it is issued.
The Commercial Leasing Advisory Group will meet again on Monday 4 May 2020 and we look forward to any questions that you may have. An agenda for the meeting will be distributed shortly.
From the office of the
Hon Adem Somyurek MP
Victorian State Government
7 April 2020
Today, the National Cabinet agreed that states and territories will introduce a mandatory Code of Conduct (the Code) to implement the principles agreed by National Cabinet on 3 April 2020.
The Code builds on the draft codes submitted by landlord and tenant representative bodies in the commercial property sector.
The purpose of the Code is to impose a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, in circumstances where the tenant is a small-medium sized business (annual turnover of up to $50 million) and is an eligible business for the purpose of the Commonwealth Government’s JobKeeper programme.
National Cabinet also agreed that there would be a proportionality to rent reductions based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants.
The Code provides a proportionate and measured burden share between the two parties while still allowing tenants and landlords to agree to tailored, bespoke and appropriate temporary arrangements that take account of their particular circumstances.
Australian and foreign banks along with other financial institutions operating in Australia are expected by National Cabinet to support landlords and tenants with appropriate flexibility as they work to implement the mandatory Code.
The Rent Relief Policy will include a mutual obligation requirement on the small and medium sized enterprises and not-for-profit tenants to continue to engage their employees through the JobKeeper initiative where eligible, and if applicable, provide rent relief to their subtenants.
For more information on the Mandatory Code, click here.
For more information on the JobKeeper Payment, click here.
The Australian Government has also released a Coronavirus app and Whatsapp channel. The App is available on both Android and iPhones. To access the Whatsapp channel, you can go to the website here: aus.gov.au/whatsapp
Generally for more information on Coronavirus and the Government’s response, please visit: www.treasury.gov.au/coronavirus or www.australia.gov.au.
Alternatively you can contact the business.gov.au support line at 13 28 46.
Senator the Hon Michaelia Cash
Minister for Employment, Skills, Small and Family Business
Senator for Western Australia
3 April 2020
National Cabinet has today made further progress on the issue of commercial tenancies.
They have agreed that a mandatory code of conduct guided by certain principles will be developed and subsequently legislated by State and Territory Governments to apply for tenancies where the tenant is eligible for the Commonwealth Government’s JobKeeper assistance and is a small- or medium-sized enterprise (less than $50 million turnover).
The principles that guide the code will be:
- Where it can, rent should continue to be paid, and where there is financial distress as a result of COVID-19 (for example, the tenant is eligible for assistance through the JobKeeper program), tenants and landlords should negotiate a mutually agreed outcome
- There will be a proportionality to rent reductions based on the decline in turnover to ensure that the burden is shared between landlords and tenants
- There will be a prohibition on termination of leases for non-payment of rent (lockouts and eviction)
- There will be a freeze on rent increases (except for turnover leases)
- There will be a prohibition on penalties for tenants who stop trading or reduce opening hours
- There will be a prohibition on landlords passing land tax to tenants (if not already legislated)
- There will be a prohibition on landlords charging interest on unpaid rent
- There will be a prohibition on landlords from making a claim to a bank guarantee or security deposit for non-payment of rent
- Ensure that any legislative barriers or administrative hurdles to lease extensions are removed (so that a tenant and landlord could agree a rent waiver in return for a lease extension)
For landlords and tenants that sign up to the code of conduct, States and Territories have agreed to look at providing the equivalent of at least a three month land tax waiver and three month land tax deferral on application for eligible landowners, with jurisdictions to continue to monitor the situation. Landlords must pass on the benefits of such moves to the tenants.
In cases where parties have signed to the code of conduct, the ability for tenants to terminate leases as mentioned in the National Cabinet Statement on 29 March 2020 will not apply. Mediation will be provided as needed through existing State and Territory mechanisms.
The proposed code of conduct will be discussed at the next meeting of the National Cabinet on Tuesday 7 April.
Senator the Hon Michaelia Cash
Minister for Employment, Skills, Small and Family Business
Senator for Western Australia