Government releases official Covid-19 Code of Conduct for commercial tenants & landlords

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Once again I tuned into the Prime Minister’s much anticipated announcement this afternoon on Commercial Leasing Principles, known officially as the National Cabinet Mandatory Code of Conduct: SME Commercial Leasing Principles During Covid-19.

You can read the Code in full here, and I’ve outlined my summary below:

* The Code is a set of good faith leasing principles for commercial tenancies between Landlords and Tenants where the tenant is a SME sized business (annual turnover <$50m) and is an eligible for Job Keeper (business must have suffered >30% turnover)

* Any rent reduction must follow the Proportionality Principle (ie equivalent to the loss of turnover) and comprise a mix of waiver/rental abatement (at least 50%) and deferred rent (which can be paid back over the balance of the lease term or 24 months, whichever is the greater or as agreed between the parties

* Both parties negotiate in good faith

* Leases cannot be terminated

* Bank Guarantees cannot be cashed

* Australian and foreign banks to support landlords and tenants with appropriate flexibility as they work to implement the Code

* Mediation process available for those who can’t work it out

https://lnkd.in/e_uP3eY

#landlords #rent #leases #property #COVID19 #codeofconduct #rentalabatement #survival

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