COVID-19 commercial tenancy relief law - Quick reference guide - AUSTRALIA - DLA Piper
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AUSTRALIA
COVID-19 commercial tenancy relief law –
Quick reference guide
COVID-19 ALERTSCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Commonwealth
Instrument • Rental deferrals: Payment of rental deferrals by the tenant
must be amortised over the balance of the lease term and for
National Cabinet Mandatory Code of Conduct
a period of no less than 24 months, whichever is the greater
(Mandatory Code of Conduct)
(unless otherwise agreed by the parties).
• Statutory charges: Any reduction in statutory charges
Status
(e.g. land tax, council rates) or insurance will be passed on to
In effect the tenant in the appropriate proportion applicable under the
terms of the lease.
Effective Date/Publication Date • Sharing benefits: Landlords should share any
benefits received due to deferral of loan payments in a
Published 7 April 2020
proportionate manner.
• Utilities and services: Landlords should seek to waive the
Description of Legislation/Policy
recovery of expenses or outgoings payable by a tenant during
The Mandatory Code of Conduct sets out a mandatory set of the period a tenant is unable to trade. A landlord may reduce
principles to be applied during negotiations between landlords services as required in the circumstances.
and tenants during the pandemic period. The most pertinent
• Repayments: Repayment should occur over an extended
principles are the Leasing Principles which provide a specific
period. Repayments should not commence until the earlier
framework for conducting negotiations. Failure to reach an
of the end of the COVID-19 pandemic (as defined by the
agreement will lead to binding mediation.
Australian Government) or the expiration of the lease term.
Repayment should take into account a reasonable subsequent
Leasing Principles:
recovery period.
• Termination by landlord: Landlords must not terminate • No penalties: No fees, interest or other charges should be
leases due to non-payment of rent during the COVID-19 applied with respect to rent waived in principles #3 and #4.
pandemic period (or reasonable subsequent recovery period). No fees, charges nor punitive interest should be charged on
deferrals in principles #3, #4 and #5.
• Commitment to lease: Tenants must remain committed
to the terms of their lease, subject to any amendments • No calling on securities: Landlords must not call on a
negotiated under the Mandatory Code of Conduct. Failure to tenant’s security for the non-payment of rent during the
do so will forfeit protections offered to the tenant by the period of the COVID-19 pandemic and/or a reasonable
Mandatory Code of Conduct. subsequent recovery period.
• Proportionate rent reductions: Landlords must offer tenants • Extension of lease term: Tenants should be provided with
proportionate rent reductions in the form of waivers and opportunities to extend the lease term for a period equivalent
deferrals of up to 100% of the amount ordinarily payable, to the period of the rent waiver and/or deferral period.
based on the reduction in the tenant’s trade during the
• No rent increases: Landlords must freeze rent increases
COVID-19 pandemic period (and any subsequent reasonable
(except for retail leases based on turnover rent) for the
recovery period).
duration of the COVID-19 pandemic and a reasonable
• Rental waivers: Rental waivers must constitute no less than subsequent recovery period, notwithstanding any other
50% of the total reduction in rent (subject to a tenant’s right arrangements between the landlord and the tenant.
to waive this minimum requirement). This amount should be
• No penalties for failure to trade: Landlords may not
greater where failure to do so would compromise the tenant’s
penalise a tenant who reduces opening hours or ceases
capacity to fulfil their ongoing obligations under the lease.
to trade due to the COVID-19 pandemic.
For landlords, regard must also be had to the landlord’s
financial ability to provide such additional waivers.
2 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Relevant Eligibility Criteria (if any) Comments
The Mandatory Code of Conduct applies to those tenancies The Mandatory Code of Conduct will be given effect
where the tenant: (i) has an annual turnover of up to through relevant state and territory legislation or regulation
AUD50 million, and (ii) is eligible for the Commonwealth as appropriate. The Mandatory Code of Conduct is not
Government’s JobKeeper programme. intended to supersede such legislation, simply complement it.
Links
Click hereCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
The Rules are pursuant to the above Bill. The Rules are relatively
Instrument
in line with expectations, however, alternative tests may be
Coronavirus Economic Response Package (Payments and Benefits) added by the Commissioner of Taxation.
Bill 2020 (Cth)
Relevant Eligibility Criteria (if any)
Coronavirus Economic Response Package (Payments and
Benefits) Rules 2020 (Cth) Eligibility should be determined on an ad hoc basis given the
nuances of the Rules. The crux of eligibility is suffering a decline
in turnover as a result of COVID-19 (generally 30%).
Status
In effect but subject to change
Comments
Eligibility for JobKeeper is determinative for the purposes of the
Effective Date/Publication Date
Mandatory Code of Conduct and by proxy State legislation
8-9 April 2020
Links
Description of Legislation/Policy
Link (Bill)
The Bill establishes a framework for the Treasurer to make
Rules which provide for the Commissioner to make payments Link (Rules)
to eligible entities in relation to the JobKeeper program.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Queensland
Instrument Relevant Eligibility Criteria (if any)
Queensland Media Release Landlords will be eligible for the 25% reduction in land tax relief
if they meet the following criteria:
Status
• the landlord rents all or part of a property to a tenant or all
Legislated as below.
or part of a property is currently available for lease; and
Land tax relief in effect. Applications to the Queensland Office • at least one tenant’s ability to pay their normal rent or
of State Revenue for land tax relief possible from 14 April 2020 the landowner’s ability to secure a tenant is affected by
up to 30 June 2020. the COVID-19 pandemic; and
• the landowner provides rent relief to an affected tenant/s
Effective Date/Publication Date commensurate with the amount of the land tax rebate or if
the property is unable to be leased, the landowner requires
9 April 2020
land tax relief to meet their financial obligations (such as debt
repayments): and
Description of Legislation/Policy
• the landowner complies with new Leasing Principles even if
The Government will introduce a AUD400 million land tax relief the relevant lease is not regulated, e.g:
package for landlords (as property owners of both commercial
• the landowner will not evict a tenant who is in financial
and residential properties) which must be passed on to tenants.
distress and unable to meet their commitments due to
to implement the Mandatory Code of Conduct.
the impact of COVID-19;
This comprises of: • the landowner will not increase rent,
exceptwhere rent is linked to turnover;
• a land tax rebate reducing land tax liabilities by 25%
• the landowner will not penalise a tenant who stops trading
for eligible properties for the assessment year ending
or reduces opening hours;
30 June 2020 (to be provided by way of refund where the
tax has already been paid); • the landowner will not charge any interest on unpaid
or deferred rent; and
• a waiver of the 2% land tax foreign surcharge for foreign
entities for the assessment year ending 30 June 2020; and • the landowner will not make a claim on a bank guarantee
or security deposit for non-payment of rent.
• a 3-month deferral of land tax liabilities for the following
assessment year ending 30 June 2021,
See above for more information on the Leasing Principles.
Legislation to be introduced to provide relief measures
It appears the foreign surcharge waiver and three month
for commercial tenants will include:
deferral of land tax in the coming financial year will
be automatically applied to eligible landlords by the
• a ban on evictions on the grounds of financial distress;
Queensland Office of State Revenue.
• preventing rent increases (except in cases where business
turnover has increased); and
• allowing leases to be extended for the tern of a rent waiver
that has been agreed by the property owner and tenant.
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The land tax rebate does not need to be repaid if the eligibility
Comments
requirements and conditions are met.
The land tax rebate will only apply to each property that meets
the eligibility requirements and conditions, rather than the
Links
rebate applying to entire taxable landholdings.
Link
Where there are multiple tenants for a single property,
Link (Land Tax Relief)
including mixed-use developments, if the eligibility
requirements and conditions are met for at least one tenancy,
then the whole property is eligible for the land tax rebate.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Residential Leases
Instrument
COVID-19 Emergency Response Act 2020 (Qld) Part 8 of the Act (which deals with residential leases) allows
regulations to be made to ensure the residential tenancy sector
is appropriately managed during the COVID-19 emergency
Status
period. A regulation may:
In effect
• impose a moratorium on evictions of tenants and residents
during the COVID-19 emergency period; or
Effective Date/Publication Date
• alter the grounds on which notices to leave may be given; or
24 April 2020
• enable particular disputes about unpaid rent to be conciliated
Any regulation made under the Act can have retrospective by the Residential Tenancies Authority; or
application to 23 April 2020 and expires on 31 December 2020.
• suspend a right or obligation under the Residential Tenancies
and Rooming Accommodation Act 2008 (Qld) (RTRA Act) in
Description of Legislation/Policy particular circumstances; or
Retail/Commercial Leases • provide for applications to be made to, and decided by,
a different entity to the entity provided for under the
Part 7 of the Act (which deals with retail and other prescribed RTRA Act; or
leases, but not residential leases (which are dealt with
• prohibit the inclusion of particular matters in a tenancy
under Part 8)) allows regulations to be made in relation to
database under the RTRA Act; or
“relevant leases” which:
• amend a residential agreement, including, for example, by:
• prohibit landlords from recovering possession of premises;
• extending the term of the agreement; or
• prohibit landlords from terminating a lease;
• terminating the agreement; or
• regulate or prevent the exercise or enforcement of another
• if there is more than one tenant or resident for the
right of a landlord;
agreement, ending the interest of a tenant or resident in
• exempt a tenant (or class of tenants) from the operation the agreement; or
of a provision of an Act, lease or other agreement relating
• extend the application of particular provisions of the RTRA Act
to the premises;
to additional persons.
• require parties to have regard to principles or a code in
negotiating or disputing matters; The regulation-making power is broad as it allows for regulations
to be made under both the Act itself or the RTRA Act in relation
• require mediators to have regard to principles or a code
to a residential lease in response to the COVID-19 emergency
when mediating;
(see ‘‘Relevant Eligibility Criteria” column).
• provide for a dispute resolution process;
Part 6 of the Act provides for the appointment of a
• prescribe other matters necessary to facilitate the above; and
Small Business Commissioner to provide dispute resolution
• provide for a maximum penalty of 20 penalty units for support for small businesses including mediation for
a breach of the regulation. tenancy disputes.
The regulation-making power is broad as it allows for regulations
to be made under both the Act itself or the Retail Shop Leases
Act 1994 (Qld) in relation to a “relevant lease” in response to the
COVID-19 emergency (see ‘Relevant Eligibility Criteria” column).
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Relevant Eligibility Criteria (if any) Comments
Retail/Commercial Leases The regulatory framework contemplated by Part 7 of the Act has
not yet been released.
A “relevant lease” for the purpose of Part 7 of the Act is a
retail shop lease under the Retail Shop Leases Act 1994 (Qld) See below for regulation passed as contemplated by Part 8
or a “lease prescribed by regulation”. A lease includes any of the Act.
agreement under which occupancy rights are granted (except
for residential leases).
Links
Residential Leases Click here
A residential lease for the purpose of Part 8 of the Act is a
“residential tenancy agreement” or “rooming accommodation
agreement” under the RTRA Act.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
• Unpaid Rent: If:
Instrument
• rent payable under a residential agreement has remained
Residential Tenancies and Rooming Accommodation (COVID-19
unpaid for seven days; and
Emergency Response) Regulation 2020 (Qld)
• the landlord knows, or ought reasonably to know, the tenant
is or has been suffering “excessive hardship” because of the
Status
COVID-19 emergency,
In effect
a landlord must not give the tenant a notice to pay rent,
but, instead, may give the tenant a show cause notice for the
Effective Date/Publication Date
unpaid rent. Within 14 days after the show cause notice, the tenant
24 April 2020 must pay the unpaid rent or tell the landlord that the reason for
non-payment is that the tenant has been or is suffering “excessive
hardship” because of the COVID-19 emergency. If the tenant does
Description of Legislation/Policy
the latter, the landlord may request the tenant to enter into an
This Regulation was made pursuant the COVID-19 Emergency agreement varying the residential agreement which provides for
Response Act 2020 (Qld). a rent reduction for a certain period or payment plan.
The Regulation applies to: • Termination by landlord without grounds: Under section
291 of the RTRA Act, a landlord may give notice to leave to
• all residential tenancy agreements and rooming a tenant without stating a ground for the notice. Under the
accommodation agreements under the RTRA Act entered Regulation, a landlord must not give a notice of that kind
into before or after 29 March 2020; and if the tenant is or has been suffering “excessive hardship”
because of the COVID-19 emergency.
• landlords, tenants and their agents involved in
those agreements. • Reletting costs: If the tenant terminates a fixed term
agreement other than as permitted under the Act, and a
The regulation governs a number of matters,
term of the agreement provides that the tenant must pay
including pertinently the following:
the reasonable costs incurred by the landlord in reletting
thepremises, the amount the tenant is liable to pay is limited
• Moratorium on Evictions: A landlord must not evict
to an amount equivalent to one week’s rent under the
(as defined under the Regulation) a tenant by reason
agreement if:
of its failure to pay rent in accordance with the residential
agreement if the tenant is suffering “excessive hardship” • the tenant suffers a loss of income of 75% or more; and
and the cause of the hardship is the COVID-19 emergency.
• the tenant has less than AUD5,000 in savings.
The restriction on evictions applies during the period
commencing 29 March 2020 and ending on the earlier of: • Repairs and Maintenance:
• 29 September 2020; or • If a statutory obligation is inconsistent with a public health
direction or social distancing, the landlord does not have to
• last day of the COVID-19 emergency period (as declared
comply with it to the extent of inconsistency, unless it is an
by the relevant Minister).
obligation to make emergency repairs.
• Extensions of fixed term residential agreements: Where
• If the Regulation does not permit entry to undertake a
there is a fixed-term residential agreement which will end
statutory obligation, the landlord does not have to comply
on or before 29 September 2020 and the tenant is suffering
with it until the landlord may enter the premises, lawfully.
“excessive hardship” because of the COVID-19 emergency:
• If the Regulation permits a landlord to undertake a statutory
• the landlord must offer the tenant an extension (at no cost
obligation in relation to repairs or maintenance and another
to the tenant) of the term until 30 September 2020 before
person (e.g. a tradesperson) is needed and not available
the term ends;
or the supplies needed are not available, the landlord is
• the extension may be for a shorter period if that is released from the statutory obligation during the period
requested by the tenant. of such unavailability.
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• Landlord’s breaches: If a tenant gives its landlord a notice to • any of the following circumstances apply to the person:
remedy a breach which relates to an obligation from which the
• the person, or another person under the person’s care,
landlord is released, the period of time which the notice gives
suffers from COVID-19;
is extended until the earlier of the day when:
• the person is subject to a quarantine direction;
• a public health direction or social distancing stops applying
to what needs to be done to comply with the notice; and • the person’s place of employment is closed, or the trade or
business conducted by the person’s employer is restricted,
• the COVID-19 emergency period ends.
because of a public health direction;
• Termination by tenant for excessive hardship: If the
• the person is self-isolating because the person is a
tenant has made a dispute resolution request to the relevant
vulnerable person, lives with a vulnerable person or is the
authority, and, the parties to the residential agreement
primary carer for a vulnerable person;
are unable to reach a conciliation agreement after that,
thetenant may apply to the tribunal for a termination order • a restriction on travel, imposed under a public health
of a residential agreement. The tribunal may make the order if direction or other law, prevents the person working or
satisfied the tenant has established it has or is suffering returning home;
“excessive hardship” because of the COVID-19 emergency.
• the COVID-19 emergency prevents the
• Tenancy Database: The Regulation makes it an offence person leaving or returning to Australia; and
for any person (including landlords/agents) to list personal
information in a tenancy database, if the failure to pay rent the person:
or ending a residential agreement happened during the
• suffers a loss of income of 25% or more; or
COVID-19 emergency and was because the person suffered
“excessive hardship” because of the COVID-19 emergency or • the rent payable by the person under a residencial tenancy
such person or was complying with a public health direction. agreement or rooming accommodation agreement is 30%
or more of the person’s income.
The Regulation also deals with the following: tenant’s failure
to leave a premises; rental bonds; entry to the premises;
If there is more than one tenant or resident under the residential
termination by landlords wanting to sell; termination for
agreement, the above is taken to provide:
occupation by landlords and reletting costs and domestic
violence situations.
• that there has been a 25% or more reduction in the combined
total income of all of the tenants or residents; or
Relevant Eligibility Criteria (if any)
• that the rent payable under the agreement is 30% or more
For the purposes of the Regulation, a person suffers of the combined total income of all of the tenants or residents.
“excessive hardship” if during the COVID-19 emergency
period (being from 29 January 2020 until the relevant
Links
Minister puts an end to the declared public health emergency
under section 324 of the Public Health Act 2005 (Qld)): Click here
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Instrument Relevant Eligibility Criteria (if any)
Queensland Media Release The Residential Tenancies Practice Guide provides practical
detail on:
Status
• Threshold criteria to qualify for the application of the
In effect COVID-19 rental response.
• Evidence that tenants can be asked to provide the same proof
Effective Date/Publication Date of finances to property managers just as they would when
starting a tenancy.
24 April 2020
• Detail on conciliation with the Residential Tenancies Authority,
including the renegotiation of lease agreements where parties
Description of Legislation/Policy
are COVID-19 effected, which could cover new rent payments
A Residential Tenancies Practice Guide has been published, and deferrals if this is agreed to.
following the passing of the COVID-19 Emergency
• Commentary around other rights provided to tenants/
Response Act 2020 (Qld) and Residential Tenancies and
landlords under the Regulation.
Rooming Accommodation (COVID-19 Emergency Response)
Regulation 2020.
Links
This is intended to help property owners and tenants in their
Link (Practice Guide)
discussions to negotiate a way through the six months after
passing of the Act.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
New South Wales
Instrument • providing a refund on the amount of rent reduction provided
to a tenant; or
New South Wales Media Release
• reducing the amount of 2020 land tax payable (if payment
has not yet been completed).
Status
Applications are open
Relevant Eligibility Criteria (if any)
To be eligible, a landlord must:
Effective Date/Publication Date
7 May 2020 • be leasing property to a commercial tenant who has:
• an annual turnover of less than AUD50 million, and
Description of Legislation/Policy
• lost 30% or more of turnover due to COVID-19;
Eligible landlords can apply for certain land tax concessions.
• have reduced the rent of affected tenants for any period
The land tax concession package will be divided approximately
between 1 April 2020 and 30 September 2020;
50-50 with around AUD220 million going to the commercial
sector and a further AUD220 million expected to benefit the • have provided the rent reduction without any requirement to
residential sector. be paid back at a later date; and
• have a 2020 land tax liability that can be reasonably attributed
Landlords are encouraged to apply before 31 October 2020.
to the parcel of land where the rent reduction has been given.
Once approved, a concession will be applied to any unpaid 2020
land tax notices, and refunds will be issued for payments already
made this year. Links
Link (Media release)
The land tax concessions include:
Link (Application portal)
• reducing up to 25% of a Landlord’s 2020 land tax liability;
• deferring land tax payments by up to 3 months;
12 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
• exempting a tenant or tenant (or a class) from the operation
Instrument
of a provision of relevant legislation or an agreement relating
COVID-19 Legislation Amendment (Emergency Measures) to the lease.
Act 2020 (NSW)
Relevant Eligibility Criteria (if any)
Status
Regulations made pursuant to the Part 11 of the Retail Leases
In effect Act 1994 (NSW) will only apply to ‘retail leases’, as defined
under the Retail Leases Act 1994 (NSW).
Effective Date/Publication Date
Comments
25 March 2020
The NSW Government has now implemented regulations
under the Retail Lease Act 1994 (NSW).
Description of Legislation/Policy
The Act introduces Part 11 to the Retail Leases Act 1994 (NSW)
Links
which provides for regulations to be made which:
Link (COVID Act)
• prohibit the recovery of possession of premises by a landlord
or owner; Link (Retail Leases Act)
• prohibits lease termination;
• regulates or prevents the exercise of a right of a landlord
or owner; andCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
• eviction of the tenant from premises or land the subject of
Instrument
the commercial lease;
Retail and Other Commercial Leases (COVID-19)
• exercising a right of re-entry to premises or land the subject
Regulation 2020 (NSW)
of the commercial lease;
• recovery of the premises or land;
Status
• distraint of goods;
In effect
• forfeiture;
Effective Date/Publication Date • damages;
24 April 2020 • requiring a payment of interest on, or a fee or charge related
to, unpaid rent otherwise payable by a tenant;
Description of Legislation/Policy • recovery of the whole or part of a security bond under the
commercial lease;
Obligations and prohibitions
• performance of obligations by the tenant or any other person
Unless otherwise agreed, impacted tenants are: (i) excluded from pursuant to a guarantee under the commercial lease;
rent increase, and (ii) exempted from land tax, other statutory
• possession;
charges or insurance payable to the extent that these fixed
amounts have been reduced. Further, a tenant acting pursuant • termination of the commercial lease; and
to any Commonwealth or State law will not be considered to
• any other remedy otherwise available to a landlord against
have breached a commercial lease.
a tenant at common law or under the law of this State.
Unless otherwise agreed, a landlord is not entitled to take
Renegotiating leases
any prescribed action against an impacted tenant during
the prescribed period in relation to:
If an impacted tenant is a party to a commercial lease, any party
to the lease may request the terms of the lease. All negotiations
• a failure to pay rent;
should be conducted in good faith and consider the impact of
• a failure to pay outgoings; or COVID-19 and the leasing principles set out in the Mandatory
Code of Conduct. Failure to reach a negotiated solution will
• the business operating under the lease not being open
trigger the usual dispute resolution mechanism under Part 8
for business during the hours specified in the lease.
of the Retail Leases Act 1994 – including mediation with the
Office of the NSW Small Business Commissioner and NCAT
However, prescribed actions can still be taken on grounds not
proceedings. Any tribunal or court considering such a dispute
related to the economic impacts of the COVID-19 pandemic.
must have regard to the leasing principles set out in the
Mandatory Code of Conduct.
Prescribed actions include (prescribed action):
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Relevant Eligibility Criteria (if any) Comments
The regulation applies to retail leases entered into before the ‘Commercial leases’ under the Conveyancing Act are
commencement of the Regulation as defined by the Retail Leases also affected in the same way and must be subjected to
Act 1994 (NSW). mediation before the Small Business Commissioner before:
(i) recovering possession of premises, (ii) terminating the
Commercial leases under the Conveyancing act are also affected commercial lease, or (iii) exercising or enforcing any other
(see comments). right under the lease.
The tenant of a retail or commercial lease will be entitled
Links
to certain rights under this Regulation, provided that they
meet two criteria: (i) eligibility for the JobKeeper scheme, Click here
and (ii) less than AUD50 million turnover in the 2018–2019
financial year (impacted tenant).
The AUD50 million annual turnover threshold applies in
respect of franchises at a particular premises, and in respect
of corporate groups at the group level (rather than at the
individual outlet level).COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Victoria
Instrument To encourage landlords to provide relief to their tenants,
the Government will provide AUD420 million in land tax relief.
Victoria Media Release
If a landlord provides an impacted tenant with rental relief,
thelandlord will be eligible for a 25% discount on land tax.
Status Any remaining tax can be deferred until March 2021.
Legislated as below
Relevant Eligibility Criteria (if any)
Effective Date/Publication Date Businesses will be eligible for these measures if they have
an annual turnover under AUD50 million per year and
15 April 2020
have experienced more than a 30% reduction in turnover
due to coronavirus.
Once legislated, the measures will retroactively take effect
from 29 March for six months.
Comments
Description of Legislation/Policy Victorian Parliament will sit on 23 April 2020 to implement the
Mandatory Code of Conduct.
The Government will legislate a AUD500 million package to
implement the Mandatory Code of Conduct by reforming
residential and commercial tenancy laws. Measures will include: Links
Click here
• temporary bans on evictions for non-payment of rent;
• banning rental increases for six months; and
• providing land tax relief for landlords and rent relief
for tenants experiencing financial hardship.
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• extending the term of an eligible lease;
Instrument
• deeming a provision of the regulations to form part
COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic)
of an eligible lease;
• imposing new obligations on landlords and tenants under
Status
an eligible lease, including requiring them to negotiate
In effect amendments to an eligible lease; and
• modifying or exempting compliance with agreements to
Effective Date/Publication Date eligible leases, which would, presumably, include guarantees
and may also extend to indemnities.
25 April 2020
Regulations made under the Act may have retrospective Relevant Eligibility Criteria (if any)
effect to a day not earlier than 29 March 2020 (section 15(2)).
The Act defines an “eligible lease” as one that was in effect when
Further, section 17(2) of the Act provides “to avoid doubt,
the proposed regulations come into operation and where the
any regulations made under section 15 that have retrospective
tenant is an SME entity and an employer who qualifies for and
effect to a particular day are taken always to have had effect on
is a participant in the JobKeeper scheme.
and after that day.
An SME entity is an entity that had less than AUD50M in turnover
Description of Legislation/Policy in either or both of the previous or current financial year (r 5
of the Guarantee of Lending to Small and Medium Enterprises
The Act allows regulations to be created that give effect to the
(Coronavirus Economic Response Package) Rules 2020 (Cth)).
Mandatory Code of Conduct. The important changes to note will
take place in the regulations.
The Act excludes from the definition of eligible lease a
“prescribed group of entities” with an aggregate turnover
The Act allows for regulations that affect the operation of
above the “prescribed amount”. The Act does not state the
“eligible leases” (see the Relevant Eligibility Criteria’ column and
prescribed group of entities or the prescribed amount. Based
appear designed give effect to the Leasing Principles in the
on the Mandatory Code of Conduct, we expect the prescribed
Mandatory Code of Conduct. They include:
amount to be AUD50M. The regulations have the ability to define
a group quite widely, beyond just the classic corporate family
• prohibiting the termination of eligible leases;
and to include companies under the same sphere of control
• changing periods in the lease by which someone must or or influence.
may do a thing;
• changing or limiting other rights or exempting a landlord or Links
tenant from complying with an obligation under an eligible
Click here
lease or other statute;
• modifying the operation of an eligible lease or the application
of other statutes to those leases;
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Once this written request is made, the landlord has 14 days
Instrument
(or a different timeframe by agreement) to make an offer for
COVID-19 Omnibus (Emergency Measures) (Commercial Leases rent relief.
and Licences) Regulations 2020 (Vic)
The terms of the landlord’s offer are governed by regulation
10, and must be based on all the circumstances of the eligible
Status
lease including:
In effect
• relate to up to 100% of the rent payable under the eligible
lease during the relevant period; and
Effective Date/Publication Date
• provide that no less than 50% of the rent relief offered by
1 May 2020
the landlord must be in the form of a waiver of rent (unless
otherwise agreed in writing); and
Description of Legislation/Policy
• apply to the relevant period; and
Overview of Regulations
• take into account –
The Regulations commenced retrospectively on 29 March 2020 • the reduction in a tenant’s turnover associated with the
and will expire six months later on 29 September 2020. premises during the relevant period; and
• any waiver relating to outgoings (pursuant to regulation
The objectives of the Regulations are
14(2)); and
• to implement temporary measures to apply to tenants • whether a failure to offer sufficient rent relief would
and landlords under certain eligible leases to mitigate compromise a tenant’s capacity to fulfil the tenant’s ongoing
the effect of measures taken in response to the COVID-19 obligations under the eligible lease, including the payment
pandemic; and of rent; and
• to implement mechanisms to resolve disputes concerning • a landlord’s financial ability to offer rent relief, including
eligible leases. any relief provided to a landlord by any of its lenders as a
response to the COVID-19 pandemic; and
The Regulations broadly followed the leasing principles set out
• any reduction to any outgoings charged, imposed or levied
in the Code. The Regulations:
in relation to the premises.
• prohibit and regulate the exercise of certain rights of a
Prohibitions and restrictions
landlord relating to the enforcement of certain commercial
leases during the COVID-19 pandemic period; and
The Regulations impose certain restrictions on the operation
• requires, in response to the COVID-19 pandemic, and enforcement of commercial leases, being:
that landlords and tenants renegotiate the rent and other
terms of those leases in good faith, having regard to the • Moratorium on enforcement: a landlord must not enforce a
leasing principles set out in the Code, prior the terms lease on the grounds of breach consisting of a failure to pay
of those leases being enforced. rent or outgoings, or failing to open the premises during the
hours specified in the lease;
Application of Regulations
• Prohibition on rent increases: the rent (other than turnover
rent) must not increase; and
The Regulations, unlike in the Code, provide that the amount of
rent relief offered by landlords to tenants does not need to be • Proportionate sharing of outgoings: any reduction in
directly related to the reduction in the tenant’s turnover. Instead, outgoings (e.g. land tax for non-retail leases or Council
the tenant is required to make a written request to the landlord rates) must be passed on to the tenant in the appropriate
for rent relief that contains a statement by the tenant that it is proportion applicable under the terms of the lease.
an eligible lease that is not excluded by the corporate group
provisions of the Act and evidence that the tenant is an SME
that qualifies for and participates in the JobKeeper scheme.
18 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Dispute resolution An SME entity is an entity that had less than AUD50 million
in turnover in either or both of the previous or current
In the event of a dispute, the Regulation refers parties to: financial year (Rule 5 of the Guarantee of Lending to Small and
Medium Enterprises (Coronavirus Economic Response Package)
• the Small Business Commission for mediation; and Rules 2020 (Cth)). So this could apply to a tenant whose turnover
has gone below AUD50 million as a result of COVID-19.
• the VCAT or a court.
A prescribed group of companies that is excluded from the
Relevant Eligibility Criteria (if any) Regulations is defined by reference to ss 328-125 and 328-130
of the Income Tax Assessment Act 1997 (Cth) and the threshold
The Regulation applies to “eligible leases” where the
applies in respect of the turnover of the group.
tenant is:
• an SME entity; Comments
• an employer who qualifies and participates in the The Regulations do not apply to agricultural and farming leases.
JobKeeper scheme; and
Links
• is not excluded by the corporate group provisions of
COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) (“Act”). Click here
19 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
South Australia
Instrument Relevant Eligibility Criteria (if any)
South Australia Media Release The following criteria must be met:
• the land is used for residential or non-residential
Status
(commercial) purposes;
Change to applications open
• the land is being leased to either (i) a residential tenant, or
(ii) a non-residential (commercial) tenant with annual turnover
Effective Date/Publication Date of up to AUD50 million, who has been financially impacted as a
result of the COVID-19 pandemic;
24 April 2020
• the landlord reduces the rent of the affected tenant by at least
as much as the land tax reduction; and
Description of Legislation/Policy
• the land tax is directly related to the land for which the rent
Eligible landlords may be entitled to a 25% reduction on the land
has been reduced
tax payable on a parcel of land in the 2019-20 land tax year.
Comments
Applications should be submitted before the end of June 2020
Links
Media releaseCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Instrument Relevant Eligibility Criteria (if any)
COVID-19 Emergency Response Act 2020 (SA) The COVID-19 Emergency Response (Commercial Leases)
Regulations 2020 (SA) sets out eligibility by defining financial
COVID-19 Emergency Response (Commercial Leases) hardship to mean a tenant who is eligible for, or receiving,
Regulations 2020 (SA) a JobKeeper payment in respect of the business conduct at the
leased premises (whether in their capacity as an employer or on
their own behalf).
Status
In effect The Act defines commercial leases broadly to include:
• retail shop leases under the Retail and Commercial Leases
Effective Date/Publication Date
Act 1995 (SA);
9 April 2020
• a lease under the Landlord and Tenant Act 1936 (SA),
including a retail shop lease which Part 4 of that Act applies; or
Description of Legislation/Policy
• any other agreement under which a person grants or agrees
The Act (s 7) provides that if a commercial tenant is suffering to grant another person, for value, a right to occupy premises
financial hardship as a result of the COVID-19 Pandemic, too carry on a business.
a landlord cannot take a prescribed action against the tenant
Leases under the Pastoral Land Management and Conservation
on grounds of breach for:
Act 1989 (SA) and Crown Land Management Act 2009 (SA)
are excluded.
• failing to pay rent or outgoings;
• the business operating under the lease not being open for
Comments
business during the hours specified on the lease; or
Section 8 of the Act deals with residential tenancies.
• any other act or omission of a kind prescribed by regulations.
Acts and omissions of a tenant required under State law in Links
response to the COVID pandemic will not amount to a breach
Link (COVID-19 Act)
and will not constitute grounds for termination.
Unless otherwise agreed, rent payable under a commercial Link (COVID-19 Regulations)
lease must not be increased if the tenant is suffering
financial hardship.
A landlord must not require the commercial tenant to pay land
tax or reimburse the landlord for the payment of land tax.
Prescribed actions include:
• eviction;
• exercising the right of re-entry;
• recovery of land;
• forfeiture;
• damages;
• requiring the payment of interest on unpaid rent;
• recovery of the whole/part of a security bond; and
• termination.
21 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Tasmania
Instrument Section 22 empowers the Minister to declare a commercial
lease within the declared class must not, within the specified
COVID-19 Disease Emergency (Miscellaneous Provisions)
emergency period, be terminated and any rent payable not be
Act 2020 (Tas)
increased, in the circumstances set out. A purported termination
or rental increase will be void if it contravenes the declaration.
Status
Section 23 empowers the Treasurer to declare certain rates, fees,
In effect
taxes or charges not payable by a specified class of individuals.
Effective Date/Publication Date
Links
27 March 2020
Click here
Description of Legislation/Policy
The Act makes provisions to deal with certain risks arising
from COVID-19.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Instrument Relevant Eligibility Criteria (if any)
Notice under section 22 of the COVID-19 Disease Emergency Three eligibility criteria:
(Miscellaneous Provisions) Act 2020 (Tas)
• the premises are being used (or were being used between
1 February 2020 and 9 April 2020) by the tenant, wholly
Status
or predominantly for the carrying on of any business,
In effect trade or profession, whether or not by a person for profit,
by a charitable organisation or by a body of persons that is
not predominantly established for the purpose of profit;
Effective Date/Publication Date
9 April 2020 • the turnover, in a continuous one month period since
1 February 2020, in relation to the carrying on of any such
business, trade or profession by the tenant, has reduced by
Description of Legislation/Policy
more than 30% in at least one continuous one month period
Pursuant to section 22 of the COVID-19 Disease Emergency since 1 February 2020; and
(Miscellaneous Provisions) Act 2020 (Tas):
• the turnover in relation to any such business, trade or
• Commercial leases cannot be terminated on the grounds that profession carried on by the tenant for the period from
rent or any other moneys due and payable in relation to the 1 February 2019 to 31 January 2020 is not more than
premises, or the part of the premises, have not been paid; and AUD50 million.
• Rent may not be increased other than by virtue of the rent
increasing, under the lease, because the turnover in relation Links
to any such business, trade or profession carried out by the
Click here
tenant increases.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Instrument Relevant Eligibility Criteria (if any)
COVID-19 Disease Emergency (Commercial Leases) Act 2020 (TAS) There are two broad criteria that must be complied with:
(i) the lease is a commercial lease, and (ii) the tenant is
an eligible person during the financial hardship period
Status
(as defined in the Act).
To be proclaimed
A commercial lease must be: (i) a lease of premises to
which Schedule 1 to the Fair Trading (Code of Practice for
Effective Date/Publication Date
Retail Tenancies) Regulations 1998 applies, and (ii) a lease
13 May 2020 of premises predominately for business purposes.
An eligible person is:
Description of Legislation/Policy
The Act provides for the following: • entitled, under the Jobkeeper Rules, for a JobKeeper payment
or be qualified, under the Jobkeeper Rules, for the Jobkeeper
• a moratorium on eviction or lease termination for certain scheme; and
breaches during the ‘financial hardship period’ (12 months
• an SME entity for the purposes of the Guarantee of Lending to
from a date to be proclaimed or an earlier point determined
Small and Medium Enterprises (Coronavirus Economic Response
by the Treasurer);
Package) Act 2020 of the Commonwealth
• a prohibition on rent increases;
• mandatory lease extensions until at least the end of the Links
financial hardship period, if requested by the tenant;
Click here
• mandatory lease negotiation (particularly rent payable),
in accordance with the principles set out in the Mandatory
Code of Conduct; and
• a new dispute resolution mechanism, the Commercial Code
Administration Committee.
24 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Western Australia
Instrument • rent payable (other than rent or a component of rent
determined by reference to turnover) cannot be increased
Commercial Tenancies (COVID-19 Response) Act 2020 (WA)
during the emergency period.
The Act enables to seek a resolution from the small business
Status
commissioner. Where those options fail, the parties may apply to
In effect the State Administrative Tribunal.
The Act also provides that the regulations can be used to adopt
Effective Date/Publication Date
a code of conduct.
23 April 2020
The measures will be in place from 30 March 2020 until a date
Parts 2 and 3 which implement relevant prohibitions will apply prescribed by regulations. If no date is prescribed, the measures
retroactively from 30 March 2020. will be in place until 29 September 2020.
Description of Legislation/Policy Relevant Eligibility Criteria (if any)
The Act prohibits a landlord from taking a prohibited The prohibitions in the Act apply to actions by a landlord in
action during the emergency period (30 March 2020 to relation to a small commercial lease. Small commercial
29 September 2020) where a tenant of a small commercial leases include:
lease is in breach and the breach consists of:
• a retail shop lease as defined in the Commercial Tenancy
(Retail Shops) Agreements Act 1985 (WA);
• a failure to pay rent or any other money payable
(including outgoings); • a lease where the premises are used for the purpose of
carrying on a small business as defined in the Small Business
• the land, premises, or the business carried on there, are not
Development Corporations Act 1983 (WA);
open for business at times specified in the lease; or
• a lease where the tenant is an incorporated association under
• any other act or omission prescribed by regulations.
the Associations Incorporation Act 2015 (WA); or
Prohibited actions are any of the following by a landlord: • a lease or class of lease prescribed by regulation.
• eviction, re-entry, possession, recovery of land, distraint of The Act does not refer to the same eligibility criteria as referred
goods, forfeiture, termination of the small commercial lease to in the Mandatory Code of Conduct (i.e that the tenant must be
and claiming damages; an eligible business for the purposes of the JobKeeper program,
and must be an SME with an annual turnover of no more than
• requiring payment of interest on unpaid rent or any other
AUD50 million).
unpaid amount;
• recovery of the whole or any part of any security; The prohibitions in the Act apply to small commercial leases only.
See comments above.
• performance of tenant obligations or any other person
under a guarantee (including a bank guarantee); and
Comments
• any other remedy otherwise available to the landlord
against the tenant at common law or under written law. The Act received Royal Assent on 23 April 2020.
No regulations have been tabled to parliament.
Other relief measures provide that:
No proposed code of conduct has been made available.
• a landlord cannot terminate or take a prohibited action
where an act or omission of a tenant is required under
written law during the emergency period; and Links
Link (Commercial Tenancies Act)
25 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
• they are suffering financial hardship as a result
Instrument
of COVID-19 consequences;
Commercial Tenancies (COVID-19 (Early Termination) Bill 2020 (WA)
• they have made reasonable endeavours to negotiate waivers
or deferrals of rent, or other concessions, from the landlord;
Status
• despite those reasonable endeavours and any waiver or
Legislative Assembly Second Read deferral of rent, or other concessions made by the landlord,
it is reasonable to conclude that, because of the tenant’s
financial hardship, the tenant is not, or will not at some later
Effective Date/Publication Date
time be in a position to perform the tenant’s obligations under
The day after receiving Royal Assent the commercial lease; and
• meets other prescribed criteria.
Description of Legislation/Policy
The Bill confers a right on tenants in severe financial distress, Comments
caused by the COVID-19 pandemic, to terminate certain
Whilst the WA Government announced during the second
commercial leases.
reading that it does not currently have an intention to move
beyond the second reading, the Bill remains on the Legislative
If the tenant terminates under the Bill they will not be required
Assembly Notice Paper.
to pay the usual compensation or damages to the landlord
associated with early termination.
The WA Government indicated that the Bill may progress
only if there is widespread failure of landlords to negotiate
Relevant Eligibility Criteria (if any) in good faith with tenants for rent relief.
The Bill will apply to small commercial leases as defined in the
Commercial Tenancies (COVID-19) Response Bill 2020 (WA). Links
Link (Early Termination Bill)
Tenants will be suffering severe financial distress if:
26 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Instrument Relevant Eligibility Criteria (if any)
Western Australia Media Release Land tax assistance for landlords will be administered where the
following criteria are met:
Status
• Property must be subject to land tax;
Land tax relief grant applications are to open on 1 May 2020.
• One or more tenants are a small business (as defined by the
Small Business Development Corporation Act 1983 (WA));
Effective Date/Publication Date
• The tenant(s) suffered a 30% drop in turnover due to the
23 April 2020 impact of COVID-19 (as defined by the Australian Taxation
Office’s test) and can confirm this in writing; and
Description of Legislation/Policy • The landlord has or will fully waive its tenant’s rent and
outgoings for three months starting from 1 March 2020,
The Government has announced that AUD100 million in land
or from a date thereafter (but before 31 May 2020).
tax relief grants will be administered through the Small Business
Development Corporation, which will be available for commercial
landlords who reduce rent for small business tenants impacted Links
by COVID-19.
Link One (Media Release)
Link Two (Eligibility criteria and How to Apply)COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Northern Territory
Instrument Relevant Eligibility Criteria (if any)
Northern Territory Media Release A businesses may be eligible for relief if it is:
• a legal entity that holds a valid Australian business number
Status
(ABN) as at 23 March 2020, and
Applications open
• a Territory enterprise, and
• not a government agency, government owned body,
Effective Date/Publication Date
statutory corporation, or local government, and
Two hardship periods: 1 April 2020-30 September 2020 and
• has an annual turnover of no more than AUD50million, and
1 July 2020-30 September 2020
• has suffered a reduction in turnover of 30% or more due
to coronavirus.
Description of Legislation/Policy
Eligible businesses are entitled to relief, including:
Links
• waiving or deferring payment of payroll tax; Click here
• reducing utilities bills;
• reducing or deferring rates; and
• other relief which may be offered from time-to-time
agreed to by the responsible minister.COVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
otherwise not covered by the Act – including a 30 business day
Instrument
good faith negotiation period between tenants and landlords.
Tenancies Legislation Amendment Bill 2020 (NT) Any modification notice is subject to disallowance by a resolution
of the Legislative Assembly passed within three sitting days after
the notice has been tabled in the Assembly.
Status
In effect The Bill also creates two offences in relation to negotiations
conducted during the emergency period: (i) misrepresentation
(i.e. if a person intentionally or recklessly misrepresents their
Effective Date/Publication Date
financial position), and (ii) unauthorised disclosure of information
24 April 2020 (i.e. a party’s financial situation).
Description of Legislation/Policy Relevant Eligibility Criteria (if any)
The Bill amends the Business Tenancies (Fair Dealings) The types of leases that might be affected are enumerated
Act 2003 (NT). in sections 5-7 of the Business Tenancies (Fair Dealings)
Act 2003 (NT).
The Minister may, by Gazette notice (a modification notice),
suspend or modify all or part of the Act and regulations made
Links
under it. Any modification notice may specify specific tenants
and occupation arrangements. A modification notice can include Click here
aspects of business leases and occupation arrangementsCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Instrument Relevant Eligibility Criteria (if any)
Modification Notice No. S27 As determined by the Business Tenancies (Fair Dealings)
Act 2003 (NT)
Status
Comments
In effect
This notice is pursuant to s 11B(2) (a) of the Business Tenancies
(Fair Dealings) Act 2003 (NT)
Effective Date/Publication Date
28 April 2020
Links
Click here
Description of Legislation/Policy
The notice brings about two key changes:
1. a landlord must not give a tenant a notice to quit unless the
landlord has, for a period of 30 business days, made good
faith efforts to negotiate with the tenant to allow the tenant
to remain on the premises; and
2. parties must bear their own costs in relation to an application
for a warrant of possession during the emergency periodCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Australian Capital Territory
Instrument • exempts a tenant or landlord (or class of) from the operation
of a provision of the Commercial and Retail Lease Act,
COVID-19 Emergency Response Act 2020 (ACT)
their lease or any other agreement relating to the lease.
Status The declaration will remain in force until the day the Public
Health (Emergency) Declaration 2020 (No 1) (ACT Declaration)
In effect
(as extended) ends or, if the Minister considers the effect
of COVID-19 justifies a later day, that day (but no later than
Effective Date/Publication Date three months after the ACT Declaration ends).
8 April 2020
Relevant Eligibility Criteria (if any)
Description of Legislation/Policy The declaration will apply to leases that are subject to the
Commercial and Retail Lease Act enumerated in section 12.
The Act inserts Part 17 into the Leases (Commercial and Retail) Act
2001 (ACT) (Commercial and Retail Lease Act) which empowers
the Minister to make a declaration which: Links
Link (COVID-19 Act)
• prohibits lease termination in the stated circumstances;
• prohibits recovery of possession of premises in Link (Commercial and Retail Lease Act)
stated circumstances;
• changes any period under the lease in which someone must/
may do something;
• changes, limits or prevents the exercise or enforcement
of any other right of the landlord under the lease in the
stated circumstances; andCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
f. damages;
Instrument
g. requiring payment of penalty interest on, or a fee or charge
Leases (Commercial and Retail) COVID-19 Emergency Response
related to, unpaid rent otherwise payable by the tenant;
Declaration 2020 (ACT)
h. recovery of the whole or part of a security bond under
the lease;
Status
i. performance of obligations by the tenant or any other person
In effect
guaranteeing the tenant’s obligations under the lease;
j. possession of the premises or land; and
Effective Date/Publication Date
k. any other remedy otherwise available against the tenant
12 May 2020
under a territory law
Description of Legislation/Policy
Relevant Eligibility Criteria (if any)
A landlord cannot take a prescribed action in relation to a
The declaration will apply to leases entered into before
tenant’s prescribed breach unless the landlord has engaged in
7 April 2020, that are subject to the Leases (Commercial and
good faith negotiations with the tenant. Prescribed breaches
Retail) Act 2001 (ACT).
include: (i) failure to pay rent, outgoings or other amounts due
under the lease, and (ii) failure to operate a business during the
Further, between 1 April 2020 and the first day no COVID-19
hours required under the lease.
emergency is in force (or a later date notified by the Minister),
a tenant must qualify for JobKeeper payments. The tenant must
Prescribed actions include taking actions or starting proceedings
also have had a turnover for the 2018-2019 financial year of
for the following:
less than AUD50 million. This turnover should be calculated at a
business level for franchises and at a group level for members
a. eviction of the tenant from premises or land under the lease;
of a corporate group.
b. exercise of a right of re-entry to the premises or land;
c. recovery of the premises or land; Links
d. distraint of goods on the premises or land; Click here
e. forfeiture;You can also read
