Commercial tenancy during COVID part 3

BREAKING: Scomo has told us more on the commercial tenancy MANDATORY “Behavioural Code of Conduct” that is being implemented as a result of the covid19 pandemic …

Key points:

** mandatory Code applies where tenant or landlord is eligible for the JobKeeper stimulus package (ie turnover less than $50m)

** good faith leasing principles include:

A) landlord must not terminate lease or draw on security from tenant

B) tenant must honour lease

C) rent reduction must be proportional to the reduction in the tenants trade revenue

D) the reduction can be in the form of: waivers of rent or deferrals of rents

– waivers must account for 50% (at least) of the reduction in the rent

– deferrals must be no less than 12 months (so if you have 3 years left on the lease, you can amortise the rent over the remaining 2 years OR if less than 12 months left, then the lease period will be extended 12 months.

** binding mediation process will settle all disputes and are to be run by States and Territories

** does not apply to residential tenancies

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