After a bit of time legislation for commercial rents are in place. The Australian Government, together with the states and territories have agreed on a common set of principles:
This should be a time when parties can come together and talks. It’s important that our clients get us involved, because it would be easy to make a deal with a landlord in a rush without allowing that the commercial realities of the future are not those of even a few weeks ago.
We will keep on saying there is no “back” with the word normal in the future, and this needs to be though through.
- a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus
- tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease (see Your Business Angels blog)
- the reduction or waiver of rental payment for a defined period for impacted tenants
- the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress
- commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus
- landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements
- cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance
Commercial tenants, landlords and financial institutions are encouraged to talk about short term agreements.
More information about this will be available this week.