April 7, 2020
Prime Minister Scott Morrison has announced new rental waivers and deferrals for commercial tenants impacted by the coronavirus (COVID-19) outbreak.
Mr Morrison said the mandatory code would apply to tenancies, where the tenant or the landlord applies for the JobKeeper program and where they have a turnover of $50 million or less.
The new mandatory code means landlords will have to reduce rent in proportion to the reduction in a tenant’s business through a combination of rent waivers and deferrals.
Rental waivers will have to account for at least 50 per cent of the reduction in business, while deferrals must be spread over the outstanding time on the lease and no less than 12 months.
For example, if a lease only has six months left of its term, then the tenant would have at least 12 months to make any deferred rent payments.
Landlords are not allowed to terminate the lease or draw on a tenant’s security, while tenants must honour the lease.
Landlords and tenants will be bound to speak with each other, and the new rules will be regulated by state and territory governments.
Mr Morrison said the code was designed to support small and medium-sized businesses.
“What this does is preserves the lease, it preserves the relationship, it keeps the tenant in their property, and it keeps a tenant on the lease, which is also good for the landlord,” he said.
“This is seen as a proactive, constructive and cooperative mechanism for landlords and tenants to see this through together.”
The new code follows a ban on evictions for commercial and residential tenants during the COVID-19 pandemic.
This article was originally published on the Camberwell Shopping website.