RENT RELIEF FOR COMMERCIAL TENANTS ANNOUNCED

RENT RELIEF FOR COMMERCIAL TENANTS ANNOUNCED

RESIDENTIAL RENT RELIEF MEASURES TO BE HANDLED BY STATES AND TERRITORIES.

2.05pm – Prime Minister Scott Morrison Press Conference

As we foreshadowed last Friday, PM Scott Morrison has this afternoon announced the detail around the  Commercial Tenancy Coronavirus Crisis Code of Practice following agreement of terms by the National Cabinet.

The mandatory code will apply to any tenancies where the landlord or tenant applies forJobKeeper and where they have a turnover of $50 million or less.

The code introduces rental waivers and deferrals for commercial tenants hit by the impact of the COVID-19 crisis. Landlords will have to reduce leases in proportion to the reduction in the tenant’s business and cannot terminate leases or draw on a tenant’s security.  The code also dictates that tenants must still honour leases.

Under the scheme:

  • Waivers of rent must account for at least 50% of the reduction in business.
  • Deferrals must be covered over the balance of the lease period and for no less than 12 months.
  • Arrangements will be overseen by binding mediation and a
  • The mandatory code will be rolled out in each state and territory.

The PM said, ” This preserves the lease, it preserves the relationship, it keeps the tenant in the property,“.

Effectively this means that rental payments will still need to be made, but can be put off (deferred) and should be spread over the remaining time on a lease and for no less than 12 months. Mr Morrison said landlords were legally required to speak with tenants about rental arrangements and if they refused they would “forfeit their way out of the lease“.

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