Commercial Tenancy Relief
written by Josh McMullen
Over the weekend, National Cabinet agreed to a moratorium on evictions for the next six months for commercial and residential tenants in financial distress who are unable to meet their commitments due to the impact of Coronavirus.
With regards commercial tenancy arrangements, the government is encouraging tenants, landlords and financial institutions to sit down together (subject to social distancing guidelines) to find a way through to ensure that businesses can survive and be there on the other side. As part of this, National Cabinet agreed to a common set of principles, endorsed by Treasurers, to underpin and govern intervention to aid commercial tenancies as follows:
- 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;
- 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; and
- 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.
Josh McMullen is a senior tax writer at PT Partners.
Image credits: Sydney Morning Herald