The National Cabinet agreed yesterday that states and territories would implement a mandatory Code of Conduct (the Code), to implement the principles agreed last week.
The Code was built on the basis of draft codes submitted by landlord and tenant representative bodies in the commercial property sector.
The purpose of the Code is to impose a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, in circumstances where:
- the tenant is a small-medium sized business (annual turnover of up to $50 million) and
- is an eligible business for the purpose of the Commonwealth Government’s JobKeeper programme.
National Cabinet agreed that there would be a proportionality to rent reductions based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants.
The Code seeks to provide:
- a proportionate and measured burden share between the two parties
- while still allowing tenants and landlords to agree to tailored, bespoke and appropriate temporary arrangements that take account of their particular circumstances.
National Cabinet again noted that it expects Australian and foreign banks along with other financial institutions operating in Australia, to support landlords and tenants with appropriate flexibility as they work to implement the mandatory Code.
The Rent Relief Policy will include a mutual obligation requirement on the small and medium sized enterprises and not-for-profit tenants to continue to engage their employees through the JobKeeper initiative where eligible, and if applicable, provide rent relief to their subtenants.
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