The Federal Government's rent relief policy for commercial tenancies, summarised

The Federal Government's rent relief policy for commercial tenancies, summarised
Urban EditorialApril 9, 2020

On Tuesday, the Federal Government announced a finalised mandatory Code of Conduct (“the Code”) to aid commercial tenancies, including retail, office and industrial tenants and landlords. Here are some summarised key points of the Code to be aware of.

This Code applies to:

  • Small and medium-sized businesses, with an annual turnover of less than AUD 50 million, and under significant financial distress as per the government’s JobKeeper programme.

Principles under this Code are as follows:

  • Landlords must not terminate a lease due to non-payment of rent
  • Landlords should, instead, offer proportionate reductions in rent in the form of waivers or deferrals
  • Landlords’ reductions must be at least 50%, however, tenants can do away with this requirement by agreement with the landlord
  • No rent increases should be made
  • No interest or other forms of extra charges should be imposed with respect to the rent reductions
  • No penalties should be imposed on tenants who reduce opening hours or tenants who cease trading

The Code is enforced under the respective state and/or territory governments. In the event of a dispute between landlords and tenants, parties should seek for a dispute resolution process from Small Business Commissions or the Ombudsman. Unfortunately, for the time being, the government has yet to announce a similar Code for residential tenancies. However, there are still measures that tenants can take to protect themselves from being vulnerable in a time of crisis like this.

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