A new mandatory code of conduct unveiled by Prime Minister Scott Morrison will give small and medium businesses affected by the Coronavirus some breathing space with their commercial rent payments.
Under the new code of conduct, landlords must reduce rent proportionate to the trading reduction in the tenant’s business, through a combination of rent waivers and rent deferrals.
Rent waivers must account for at least 50 per cent of the rent reduction, while the balance must be in the form of a rental deferral. The payment of the rental deferral must be spread over the balance of the lease term, for a period of no less than 24 months.
The code will cover commercial tenancies, including retail, office and industrial. Eligible tenants must have an annual turnover of less than $50 million and qualify for the government’s JobKeeper subsidy.
The code will remain operational for the duration of the JobKeeper program, and will be overseen through a binding mediation process run by the states and territories.
This code aims to preserve the lease and tenancy relationship, keeping the tenant in the property and on the lease for the long term.
You can read the full Code of Conduct here.
If you’d like to see whether you’re eligible to take advantage of this new code of conduct, please call us on 9887 8751 or send us an email.