Prime Minister Scott Morrison has provided details of the mandatory Commercial Tenancies Code to be legislated and regulated in each state and territory.
For the Code to apply, either the landlord or tenant must be eligible for the JobKeeper program and have a turnover of AU$50 million or less.
The Code brings together a series of good faith leasing principles. It includes that:
- Landlords must not terminate a lease or draw on a tenant's security.
- Tenants must honour the lease.
- Landlords will be required to reduce the rent in proportion to the trading reduction in the tenant's business through a combination of waivers and deferrals of rent. Waivers of rent must account for at least 50% of the reduction of the rent provided to the tenant and deferrals must be covered over the balance of the lease term and in no less a period than 12 months.
- The arrangements will be overseen by a binding mediation process run by each individual state and territory.
For those hoping for similar relief under their residential tenancies, there was no good news. Instead the Prime Minister has stated that the federal government is not intending to mandate a residential tenancy code, and any such code should be formulated by the individual state and territory governments.
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