Commercial Tenancies

8 April 2020

Important news for any small and medium sized businesses struggling with rent at the current time.

The National Cabinet agreed a series of principles, to be enacted by each state and territory, which seek to maintain existing leases and share the burden between landlord and tenant.

This could assist small-medium sized businesses (up to $50m turnover p.a.) with commercial tenancies, including industrial, office and retail, which are eligible for the Commonwealth Government’s JobKeeper programme.

National Cabinet agreed that there would be a proportionality to rent reductions based on the tenant’s decline in turnover. 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.”

It was again emphasised that all banks and other financial institutions operating in Australia are "expected to support landlords and tenants with appropriate flexibility as they work to implement the mandatory Code.”

PLEASE LET ME KNOW IF THIS IS NOT YOUR EXPERIENCE!

The Federal Government also announced it will waive rents for all small and medium enterprises, and not-for-profit tenants within its property across Australia.

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.

Please see: National Cabinet Mandatory Code of Conduct - SME Commercial Leasing Principles during COVID-19