Prime Minister, Scott Morrison has announced new rental waivers and deferrals for commercial tenants hit by the impact of the COVID-19 crisis which comes into effect from 3 April 2020 and will continue until the Commonwealth JobKeeper Program remains operational.
Stay on top of these changes and how they affect your business by reading our summary below ….
The Code includes a number of key points as listed below:
- The purpose of the Code is to impose a set of good faith leasing principles between the parties to aid cashflow for small and medium business whose business has been impacted by the COVID-19 pandemic.
- The Code will apply to tenancies eligible for the Government’s JobKeeper Program with an annual turnover up to $50 million.
- The rental relief will come in two forms: both waivers up to a maximum of 50% and deferrals, also up to a maximum of 50%.
- The waivers will have to account for no less than 50% of the reduction in business of the tenant.
- The deferrals (optional) to be spread over the remaining period of the lease and no less than 24 months.
- Landlords cannot terminate leases or draw on a tenant’s security.
- Tenants must remain committed to the terms of the lease.
As always the devil’s in the details so accounting advice will be of high importance when negotiating terms..
A full transcript of the mandatory code is in the link below
Link to Copy of the Code, https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf
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