On the 7th April 2020, Prime Minister Scott Morrison announced a Code of Conduct for commercial tenancies as rent relief for commercial tenants affected by COVID-19 (coronavirus). The Prime Minister stated this code “preserves the lease, it preserves the relationships, it keeps the tenant in the property.” The code is yet to be approved by states and territories.
Commercial Rent Relief – COVID-19 Code of Conduct
COMMERCIAL RENT RELIEF CODE OF CONDUCT
Summary of key points:
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- The code applies to landlords and/or tenants that are eligible for the JobKeeper stimulus payments, with turnover of $50 million or less annually.
- Reductions in rent to be in proportion to falls in tenant’s trade income.
- Rent waivers must account for a minimum of 50 per cent of this reduction, with the balance of the reduction being deferred for no less than 12 months and amortised/repayable over the remaining term of the lease.
The Prime Minister also stated the good faith principles in place:
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- Landlords must not terminate the lease or draw on a tenant’s security.
- Tenants have to honour their lease.
- Eligible employers include businesses structured through companies, partnerships, trusts and sole traders and not for profit entities, also for the self-employed.
This code is not applicable for residential tenancies, the states and territories will address this individually. For more information please visit: National Code of Conduct -Commercial Rent Relief