Easing burden for parties to commercial tenancy leases

Elise Archer,Attorney-General and Minister for Building and Construction

Today, I was pleased to take another step in delivering our Government’s commitment to respond to the COVID-19 disease emergency and to manage the significant impact this pandemic has and is having on our businesses, our community and our economy.

This was achieved through the COVID-19 Disease Emergency (Commercial Leases) Bill 2020 being agreed to by the House of Assembly.

The Bill gives effect to the Code of Conduct for commercial tenancies (the Code) agreed upon by National Cabinet last month.

The purpose of the Code is to govern the conduct of commercial tenants and landlords, and provide additional protections and rent reductions for tenants experiencing financial hardship. Measures include:

  • the protection of commercial leases for eligible tenants (a tenant who is eligible for the JobKeeper program and has a turnover of less than $50 million per annum);
  • a freeze on rent increases (a lessor must not, unless agreed by the lessee, increase rent for a protected lease during the financial hardship period);
  • rent reductions (the lessor must provide the lessee of a protected lease a reduction in rent in line with the provisions provided in the Code); and
  • the establishment of mediation services and a Code Administration Committee to support the Code.

The financial hardship period is 1 April 2020 until the financial hardship cessation day which is 12 months after commencement of the Act, or sooner, if determined by the Treasurer that the Code no longer needs to be in effect. This approach is similar to the approach taken for the purposes of other COVID-19 legislation.

I am aware that, by working together, many tenants and landlords have already negotiated changes to their leasing arrangements, including rent reductions and deferrals. I applaud them for these efforts.

The Bill will now proceed to the Legislative Council for consideration.

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