Update 9th April, 2020

National Cabinet met again yesterday to confirm states and territories would implement the mandatory Code of Conduct (the Code), agreed on Friday 3 April.

The Code builds on the draft codes submitted by landlord and tenant representative bodies in the commercial property sector.

Good faith leasing principles will be imposed in the Code between commercial tenants and landlords where the tenant is a small-medium business (annual turnover of up to $50 million) 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 to ensure that the burden is shared between landlords and tenants. 

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.

National Cabinet again noted that it expects Australian and foreign banks along with other financial institutions operating in Australia, to support landlords and tenants with appropriate flexibility as they work to implement the mandatory Code.

The Commonwealth Government is also acting as a model landlord by waiving rents for all its small and medium enterprises and not-for-profit tenants within its owned and leased 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.

Original story 3rd April, 2020

Clarity and a steady path has become a valued asset in the real estate industry in this new world order of Coronavirus.

While real estate agents, property managers and the many roles involved in ensuring people have a roof over their head have worked harder than they ever have before, a number of issues have arisen.

Commercial tenant and landlord code of conduct

The Prime Minister in his announcement today spoke on a commercial code of conduct that is still being worked on for commercial property owners and their tenants.

The key points are:

• An industry code of practice for commercial tenancies is being worked on over the next few days by the various industry groups.
• This code of practice will become mandatory incorporating states and territories
• Both the landlord and tenant will negotiate in good faith under this code.
• If as a business you qualify for the Job Keeper support for your employees, the intention is that whatever reduction you have received in turnover, that will be the equivalent to your reduction in rent.
• If you negotiate a rent waiver for six months, then your lease should be extended by 6 months
• Banks are not party to the arrangements but are expected to be supportive
• States are looking to see what support they can give in waiving rates and fees

A hold on evictions for renters | business.gov.au

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