UPDATE ON RETAIL LEASES: Mandatory code for commercial tenancies

COVID-19, Property & Leasing

The Prime Minister has announced a mandatory code will be implemented by States and Territories applying to tenancies in which:

• the Tenant is eligible for the JobKeeper Payment subsidy; and
• where they have turnover of $50 million or less.

Whilst we will not know the exact details of the code until it is enacted by State governments, the following principles will be included in the code:

  1. Landlords must not terminate the lease or draw on Tenant security.
  2. Tenants must honour the lease.
  3. Landlords will be required to reduce rent in proportion to the trading reduction in the tenant’s business, through a combination of waivers and deferrals of rent.
  4. Waviers of rent must account for at least 50% of the reduction in rent provided to the tenant.
  5. Deferrals must be for a minimum of 12 months.

We will also be discussing this in our FREE webinar at 11am Thursday, 9 April 2020.

During this stressful time, leave it to us, your retail experts, to manage and negotiate this process for you.  Chat to us today by emailing or calling 1300 033 934 for a free, no-obligation quote.