In a press release earlier today, Australian Prime Minister, Scott Morison, announced some changes to commercial leases for those tenants and landlords in financial hardship as a result of Coronavirus, or COVID-19. This change comes in the form of a mandatory Code of Conduct which will be conducted at a State level.
To be eligible for this code of conduct, either a tenant or landlord must:
This code of conduct outlines some new rules that prevent landlords from evicting tenants or drawing on bonds and will require tenants to also honour their leases.
Where tenants are eligible, landlords will be required to reduce the rent in proportion to the trading reduction in the tenant’s business, through a combination of waivers and deferrals of rent.
Waivers must account for at least 50% of the total reduction in rent payable and deferrals must be covered over the balance of the lease term but for no less than a 12-month period. This means that if a lease ends before the 12-month period has been met, such as a six-month leasing term, the tenant would have a minimum of 12-months after the pandemic period to pay for the deferrals of rent.
This code will be overseen by a binding mediation process run at State and Territory level and banks are expected to support landlords throughout this process.
Watch the live press release HERE
As more on this topic comes to light, the team at Walker Hill will continue inform you as we find out more. However, if you do have any questions or if there is anything else that we can help with, please feel free to contact us by calling our team on 07 3367 3155 or emailing firstname.lastname@example.org.