An update regarding COVID-19, how will this impact you?
To further update you regarding the COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 (Bill), on Sunday 29 March 2020, the Prime Minister announced that the National Cabinet agrees that short term intervention is needed for commercial tenancies.
It is assumed, that the reference to “commercial tenancies” includes commercial, retail and industrial leases based on the Prime Ministers examples used.
We summarise the key principles agreed by the National Cabinet as follows:
- A six month, temporary moratorium on the eviction of commercial tenants for non payment of rent is to apply to tenancies impacted by rental distress due to the COVID-19 crisis. We believe that Tenants will be required to justify any non payment.
- Commercial tenants and landlords are encouraged to sit down together and talk to each other, to find a way through to the other side of this COVID-19 crisis. This includes to agree on rent relief (rent waiver or reductions) for a defined period of time for tenants impacted by the COVID-19 crisis.
- Tenants should be able to terminate leases or seek mediation and/or conciliation on the grounds of financial distress. Again, Tenants are going to need to justify this.
- Commercial landlords should ensure any benefits received in respect of their properties are passed onto tenants in proportion to the economic impact caused by the COVID-19 crisis.
- Landlords and tenants not significantly impacted by the COVID-19 crisis are expected to honour their lease and rental arrangements.
- There is to be a cost sharing or deferral of losses between landlords and tenants – with Commonwealth, State and Territory governments, Local governments and financial institutions to consider mechanisms to provide assistance.
The key principles need for more detail from State and Territory Treasurers, who have been given carriage of this issue.
A copy of the Prime Minister’s statement delivered in the evening of Sunday 29 March 2020 is available here.
TRS will update you as more information comes to hand.
Again, we are here to help you
Our team of experts are happy to help you navigate through these challenging times and help provide you with a realistic level of certainty on your commercial space. The next steps to take with your Landlord are a negotiation. We have a team of experts in negotiations with Landlords who are here to help you.