8 April 2020 - Rent Relief Package Commercial Tenants
The Federal Government has announced a rent relief package for Commercial tenants impacted by Coronavirus.
There is no legislation as yet however the key points around the scheme are as follows:
- Landlords will have to reduce leases in proportion to the reduction in the tenants business. We presume that this is to be determined in conjunction with supportable numbers showing reduction in turnover.
- Reduction in rent may come in the form of waivers (to account for at least 50% of the reduction in business), or deferrals.
- Where deferrals are involved the tenant must pay the deferred amount over the remaining time on the lease, or for no less than 12 months, whichever is the longer period.
- The scheme will apply to tenancies where the landlord or the tenant applies for Jobkeeper and where they have turnover of $50 million or less.
- The arrangements are to be overseen by binding mediation and a mandatory code which will be introduced by each state and territory.
- Landlords must not terminate the lease or draw on a tenants security, and tenants must honour the lease.
- For larger commercial landlords, the banks have been asked to provide support.
- There is no doubt this proposal raises more questions than answers. As soon as the legislation is put forward we will provide the specific details.
At PKF Perth we are here to help you navigate through this unprecedented situation. We have implemented policies consistent with Government recommendations. We have the infrastructure in place to enable our staff to work from home and are currently doing so. We are open for business and here to support our valued clients.
Please contact your relationship partner if you have any queries on (08) 9426 8999.