Code of Conduct for Commercial Landlords and Tenants
07 April, 2020 / In Announcements / By Chris Burnett
Today the Government introduced a new mandatory Code of Conduct for practice between landlords and tenants who have been significantly impacted by the Coronavirus pandemic.
The code will apply where a tenant or a landlord are eligible for the Job Keeper program and promotes both parties getting together to work out a mutually acceptable arrangement.
The code includes a set of basic principles which will guide landlords and tenants during the negotiation process.
1. Landlords must not terminate a lease or take security.
2. Tenants must honour the lease.
3. Landlords will be required to reduce the tenants rent obligations by at least the same proportion of a drop in the tenants gross income/ turnover (i.e. a 40% reduction in the tenants turnover would warrant a 40% reduction in rent).
4. The reduction in rental obligation can be a combination of rent waivers and rent deferrals.
5. The rental waiver component must make up at least half of the rental reduction offered to the tenant.
6. Rental deferrals will be covered over the balance of the lease (provided the remaining term is not less than 12 months).
7. If landlords do not enter into negotiations with their tenants, their rights under the lease will be forfeited.
When more information about this code of conduct is released we will continue to update you. Please contact our office if you are a tenant or landlord and would like professional assistance in this process.