Coronavirus (COVID-19) | Commerical & Residential Leasing Support

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28 May 2020 | Qld Government Regulation | National Mandatory Code of Conduct

On Friday (28 May 2020), the Queensland Government introduced regulations to implement the National Cabinet Mandatory Code of Conduct in relation to commercial leasing during the pandemic.

These regulations have not adopted the Code of Conduct in its entirety.

The main differences to note are:

  • The rent concession to be provided by the Landlord is not directly linked to but one of several factors the reduction in turnover for the Tenant’s business; and
  • The Landlord and Tenant must take into account the Landlord’s financial position

Any arrangements that have already been put in place remain valid but either party may seek to renegotiate based on new regulations.

8 April 2020 | Decision made on Commercial Tenancies embraces theme of “We Are All In This Together”

As hinted in the press in the lead up to yesterday’s announcement of the National Cabinet Mandatory Code of Conduct, landlords will now be required to share the pain on a proportionate basis being experienced by their tenants.

Please click here to view the new Code.

Eligibility

The new code applies to any franchisee or business whose turnover < $50M (SME Tenant) who will be eligible for the JobKeeper program.

Refer to our JobKeeper payments article for more information around about JobKeeper eligibility.

For retail groups that aren’t franchisees, the Code does not appear to apply if group turnover > $50M.

Principles

There are a lot of “fluffy” words in the code under the overarching principles, but fundamentally on a case by case basis the landlord and tenant need to work through temporary arrangements based on the actual impact.

The code contains 14 leasing principles.

Principle # 3 provides that

“Landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals (as outlined under “definitions,” below) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant’s trade during the COVID-19 pandemic period and a subsequent reasonable recovery period.”

Waivers must no less than ½ of the solution.

Deferrals must be amortised over 24 months or the remainder term of the lease – whichever is greater.

The appendix of the Code contains an example of the application of proportionality.

Where to from here?

If you are a business that was required by the government as part of the lockdown measures to close your business, the leasing  principles on the face of it appear to say that:

  • At least 50% of your rent should be waived; and
  • The remainder of your rent should be deferred and amortised over the remainder of your lease or a minimum of 2 years.

QLD COVID-19 Rental Grants

Funding is available to Queensland residents who have lost their job due to the impacts of COVID-19 and don’t have access to other financial relief.

This grant is only available to Queenslanders who need it the most and have exhausted all other options.

The COVID-19 Rental Grant is a one-off payment of up to 4 weeks rent (maximum of $2000) available to those affected by the COVID-19 pandemic who do not have access to other financial assistance.

The grant is paid directly to your lessor.

Before you apply you must have had a conversation with your lessor and be able to provide evidence that the lessor has declined all attempts for you to make a payment arrangement.

Applicants must meet the following criteria:

  • you live in Queensland
  • you have, or will shortly have, a bond registered with the Residential Tenancies Authority
  • you are an Australian citizen, permanent resident, or have a temporary or permanent protection visa or possess a bridging visa
  • you do not have more than $10,000 in cash and savings
  • you can provide evidence of attempts to negotiate a payment plan with your lessor
  • you have lost your job and have applied to Centrelink for income support
  • you are waiting for your application with Centrelink to be approved.

If you meet the eligibility criteria, you will need to complete an application form here.

Please note this information is sourced directly from the Queensland Government and is current as of 7 April 2020.

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