Government releases official Covid-19 Code of Conduct for commercial tenants & landlords
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
Phil has 25+ years experience advising and representing tenants on retail, office, industrial, large format retail, healthcare and other commercial property leasing.
A trusted veteran, Phil knows how to work negotiations in the tenant’s favour. He builds relationships directly with founders, business owners and senior executives to help optimise their business property situation.