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
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 See our comments on the Residential Tenancies and
Rooming Accommodation (COVID-19 Emergency Response)
A “relevant lease” for the purpose of Part 7 of the Act is a Regulation 2020 (Qld) and the Retail Shop Leases and
retail shop lease under the Retail Shop Leases Act 1994 (Qld) Other Commercial Leases (COVID-19 Emergency Response)
or a “lease prescribed by regulation”. A lease includes any Regulation 2020 (Qld) below.
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
• exercising or enforcing another right the by the landlord
Instrument
under the lease or agreement relating to the leased premises.
Retail Shop Leases and Other Commercial Leases (COVID-19
Emergency Response) Regulation 2020 (Regulations) However, a prescribed action may be taken by a landlord:
• in accordance with:
Status
• a variation of the lease made under the Code;
In effect
• a settlement agreement or other agreement between
the parties in relation to the tenant’s inability to pay rent
Effective Date/Publication Date
or outgoings, or to trade during normal hours; or
28 May 2020
• an order of a court or tribunal has been made; or
• if, despite a genuine attempt by the landlord to negotiate
Description of Legislation/Policy
rent payable and other conditions of the lease relating to
The COVID-19 Emergency Response Act 2020 (Qld) (Act) came into negotiation requirements under the Code, the tenant has
effect on 24 April 2020 and contemplated the creation of a code substantially failed to comply with the Code’s negotiation
of conduct to be adopted through the Regulations. requirements; or
• the landlord’s prescribed action is not related to the effects
The Code serves the main purpose of mitigating the effects
of COVID-19.
of the COVID-19 emergency on landlords and tenants under
affected leases by giving effect to the good faith leasing principles
Lessor must not increase rent
contained in the Mandatory National Code of Conduct (Code).
Landlords under affected leases must not increase the rent
We summarise the principles of the Code below. Please note that
payable by tenants during the response period.
this summary does not include a review of the dispute resolution
mechanism in the Code.
If the lease provides for a rent review during the response
period, the landlord may review the rent but must not give
Prohibited actions during response period
effect to an increase in rent until the end of the response period.
Landlords are prohibited from taking a prescribed action during
The above does not apply to the extent that the increase in
the response period (29 March 2020 to 30 September 2020)
rent is calculated by reference to the tenant’s turnover of
where the tenant is unable to pay rent, pay outgoings or operate
business at the leased premises.
its business at the leased premises during the hours required
under the lease.
The landlord must not take a prescribed action after the
response period, due to the tenant’s failure to pay the amount
A prescribed action is any of the following by a landlord under
of any increase which was prohibited under the Code.
an affected lease:
Nothing at points 1 and 2 above:
• recovery of possession;
• termination of the lease or eviction of the tenant; • prevents parties to an affected lease entering into an
agreement that is inconsistent with the matters at
• exercising a right of re-entry to premises;
points 1 and 2; or
• seizure of any property, including for the purpose of securing
• affects the validity of an agreement that is inconsistent
payment of rent;
with points 1 and 2.
• damages or forfeiture;
However, a party to the agreement is not prevented from
• the payment of interest on, or a fee or charge relating to,
seeking to negotiate a condition of an affected lease under
unpaid rent or outgoings;
the Code.
• a claim on a bank guarantee, indemnity or security deposit for
unpaid rent or outgoings or the performance of an obligation
by the tenant or another person under a guarantee under the
lease; or
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Renegotiating rent Deferred rent
A party to an affected lease may request in writing that the rent If parties to an affected lease agree to defer payment of an
and any other conditions of the lease be negotiated. amount of rent the variation of lease or agreement must
require that:
Upon the request being made, the parties must exchange
true and accurate information sufficient for enabling fair and • payment of the deferred rent is not to commence until the day
transparent negotiations. after the response period ends;
• payment of deferred rent be amortised in a method agreed
Within 30 days after the information is received, the landlord
between the parties for the duration of a minimum of 2 years
must offer the tenant a rent reduction and any proposed
but not exceeding 3 years; and
changes to other conditions under the lease.
• no interest or any other fee or charge in relation to any
The offer must: deferred rent is charged by the landlord, unless the tenant
fails to comply with the conditions on which the rent
• relate to part or all rent payable during the response period; is deferred.
• provide for not less than 50% of the rent reduction to be by
Extending lease for period of waiver or rent deferral
way of a waiver of rent; and
• have regard to: Where rent is waived or deferred, the landlord must offer
the tenant an extension to the term of the lease on the same
• all of circumstances of the tenant, including the tenant’s
conditions contained in the lease, except that the rent payable
reduction in turnover;
during the extension is to be adjusted for the waiver or deferral.
• the extent to which the tenant’s ability to comply with its The extension must be equivalent to the period for which rent is
obligations would be comprised by a failure to reduce rent; waived or deferred.
• the landlords financial position, including any financial relief as
The landlord’s obligation to extend the lease does not apply in
a result of COVID-19; and
circumstances where:
• any reduction in, or waiver of, outgoings or
insurance premiums. • the landlord is subject to an existing legal obligation
inconsistent with the obligation to extend the lease; or
The reduction in rent and any other conditions may be given
• the lease cannot be extended due to the landlord’s intention
effect by a variation to the lease or another agreement between
to use the premises for its own commercial purpose.
the parties.
Lessor may reduce services for leased premises
A party may request to negotiate a further rent reduction during
the response period if a ground on which the agreement to
If a tenant under an affected lease is unable to operate its
reduce rent is based changes in a material way (e.g. the tenant’s
business at the premises during the response period as a result
income significantly decreases).
of COVID-19, the landlord may cease or reduce its services to
an extent reasonable in the circumstances, and subject to any
reasonable request by the tenant.
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• the tenant under the lease, or an entity that is connected
Relevant Eligibility Criteria (if any)
with, or an affiliate of, the tenant responsible for, or involved
The Code applies to affected leases. A lease is an affected lease in, employing staff for the business carried on at the leased
if it is: premises, is eligible for the JobKeeper program.
• a retail shop lease; or Note: if the tenant under an affected lease is a franchisee,
a lease under which the franchisor is lessee of the premises
• a lease (other than a retail shop lease) where the leased
occupied by the franchisee is also an affected lease.
premises are used wholly or predominantly for carrying on a
business (including non-profit activities); and
The following leases are not affected leases:
• as at 28 May 2020, the lease was binding on the tenant
(whether or not the lease has commenced); and • leases where premises are used for a farming business; and
• the tenant is an SME entity (i.e. it carries on a business or is • leases, permits, licences and subleases under the Land Act
a non-profit body and, the tenant’s annual turnover was less 1994 (unless otherwise included).
than USD50 million for the previous financial year, and/or the
tenant’s annual turnover for the current financial year is likely
Links
to be less than USD50 million; and
Click HereCOVID-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 • the person is subject to a quarantine direction;
remedy a breach which relates to an obligation from which the
• the person’s place of employment is closed, or the trade or
landlord is released, the period of time which the notice gives
business conducted by the person’s employer is restricted,
is extended until the earlier of the day when:
because of a public health direction;
• a public health direction or social distancing stops applying
• the person is self-isolating because the person is a
to what needs to be done to comply with the notice; and
vulnerable person, lives with a vulnerable person or is the
• the COVID-19 emergency period ends. primary carer for a vulnerable person;
• Termination by tenant for excessive hardship: If the • a restriction on travel, imposed under a public health
tenant has made a dispute resolution request to the relevant direction or other law, prevents the person working or
authority, and, the parties to the residential agreement returning home;
are unable to reach a conciliation agreement after that,
• the COVID-19 emergency prevents the
thetenant may apply to the tribunal for a termination order
person leaving or returning to Australia; and
of a residential agreement. The tribunal may make the order if
satisfied the tenant has established it has or is suffering
the person:
“excessive hardship” because of the COVID-19 emergency.
• suffers a loss of income of 25% or more; or
• Tenancy Database: The Regulation makes it an offence
for any person (including landlords/agents) to list personal • the rent payable by the person under a residencial tenancy
information in a tenancy database, if the failure to pay rent agreement or rooming accommodation agreement is 30%
or ending a residential agreement happened during the or more of the person’s income.
COVID-19 emergency and was because the person suffered
“excessive hardship” because of the COVID-19 emergency or If there is more than one tenant or resident under the residential
such person or was complying with a public health direction. agreement, the above is taken to provide:
The Regulation also deals with the following: tenant’s failure
• that there has been a 25% or more reduction in the combined
to leave a premises; rental bonds; entry to the premises;
total income of all of the tenants or residents; or
termination by landlords wanting to sell; termination for
occupation by landlords and reletting costs and domestic • that the rent payable under the agreement is 30% or more
violence situations. of the combined total income of all of the tenants or residents.
Relevant Eligibility Criteria (if any) Comments
For the purposes of the Regulation, a person suffers A Residential Tenancies Practice Guide has been published to
“excessive hardship” if during the COVID-19 emergency help landlords and tenants in their negotiation discussions.
period (being from 29 January 2020 until the relevant
Minister puts an end to the declared public health emergency
Links
under section 324 of the Public Health Act 2005 (Qld)):
Click here
• any of the following circumstances apply to the person: Link (Practice Guide)
• the person, or another person under the person’s care,
suffers from COVID-19;
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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;
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• 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 • extending the term of an eligible lease;
COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) • deeming a provision of the regulations to form part
of an eligible lease;
Status • imposing new obligations on landlords and tenants under
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
25 April 2020 and may also extend to indemnities.
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)).
Further, section 17(2) of the Act provides “to avoid doubt, The Act defines an “eligible lease” as one that was in effect when
any regulations made under section 15 that have retrospective the proposed regulations come into operation and where the
effect to a particular day are taken always to have had effect on tenant is an SME entity and an employer who qualifies for and
and after that day. is a participant in the JobKeeper scheme.
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
The Act allows regulations to be created that give effect to the of the Guarantee of Lending to Small and Medium Enterprises
Mandatory Code of Conduct. The important changes to note will (Coronavirus Economic Response Package) Rules 2020 (Cth)).
take place in the regulations.
The Act excludes from the definition of eligible lease a
The Act allows for regulations that affect the operation of “prescribed group of entities” with an aggregate turnover
“eligible leases” (see the Relevant Eligibility Criteria’ column and above the “prescribed amount”. The Act does not state the
appear designed give effect to the Leasing Principles in the prescribed group of entities or the prescribed amount. Based
Mandatory Code of Conduct. They include: on the Mandatory Code of Conduct, we expect the prescribed
amount to be AUD50M. The regulations have the ability to define
• prohibiting the termination of eligible leases; a group quite widely, beyond just the classic corporate family
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
lease or other statute; Click here
• 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.
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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).
In effect (except section 17 – rent increases)
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
3 June 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’ (1 April 2020 to
• an SME entity for the purposes of the Guarantee of Lending to
3 June 2021 – or an earlier time determined by the Treasurer);
Small and Medium Enterprises (Coronavirus Economic Response
• a prohibition on rent increases; Package) Act 2020 of the Commonwealth
• mandatory lease extensions until at least the end of the
financial hardship period, if requested by the tenant; Links
• mandatory lease negotiation (particularly rent payable), Click here
in accordance with the principles set out in the Mandatory
Code of Conduct; and
• a new dispute resolution mechanism, the Commercial Code
Administration Committee.COVID-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. See our comments on the Commercial Tenancies
(COVID-19 Response) Regulations 2020 (WA) below.
Other relief measures provide that:
• a landlord cannot terminate or take a prohibited action Links
where an act or omission of a tenant is required under
Link (Commercial Tenancies Act)
written law during the emergency period; and
25 WWW.DLAPIPER.COMCOVID-19 COMMERCIAL TENANCY RELIEF LAW – QUICK REFERENCE GUIDE
Offering and negotiating rent relief
Instrument
Commercial Tenancies (COVID-19 Response) Regulations 2020 On receipt of a request, landlords must offer rent relief to the
(WA) (Regulations) eligible tenant in writing within 14 days after receiving the
request from the eligible tenant, or such other period agreed
between the landlord and the tenant.
Status
In effect Following receipt of the landlords offer, the tenant must in
accordance with the principles of the Code negotiate with the
landlord with a view to agreeing the rent relief to apply during
Effective Date/Publication Date
the emergency period.
30 May 2020
The main principles which apply to the offer and negotiation of
rent relief under the Code are as follows:
Description of Legislation/Policy
The Commercial Tenancies (COVID-19 Response) Act 2020 (WA) • The offer of rent relief must apply to the emergency period;
came into effect on 23 April 2020 and contemplated the creation
• Rent relief must be at least proportionate to the reduction in
of a code of conduct to be adopted through the Regulations.
the tenant’s turnover;
The Regulations adopt the code of conduct which must be • The reduction of the tenant’s turnover is to be calculated
adhered to by the landlords and tenants of relevant small using the principles of the decline in turnover test set out in
commercial leases (Code). the Coronavirus Economic Response Package (Payments and
Benefits) Rules 2020 (Cth);
We summarise the principles of the Code below.
• An offer of rent relief may relate to up to 100% of the
rent payable;
Overarching obligations
• An offer must provide that not less than 50% of rent relief
When negotiating under the Code, landlords and tenants must must be provided in the form of a rental waiver, unless
cooperate, must act reasonably and in good faith, and an open, otherwise agreed in writing;
honest and transparent manner and, must provide each other
• An offer must provide that more than 50% of the rent relief is
with sufficient and accurate information that is reasonable for
to be in the form of a rental waiver if –
them to provide in the circumstances.
• failure to provide an amount greater than 50% would
Landlords and tenants must not make onerous demands for compromise the tenant’s ability to fulfil its ongoing
information from each other. obligations; and
• the landlord has the financial capacity to provide greater
Requesting rent relief
than a 50% rental waiver.
Eligible tenants may request rent relief during the emergency • If the landlord is a tenant under a lease (the head lease)
period (30 March 2020 to 29 September 2020). The request and the landlord, as the tenant, is provided rent relief under
must be in writing and be accompanied by evidence of the head lease, the landlord must pass on the benefit of the
the tenant’s eligibility (i.e. that the lease is a relevant small rent relief to its (sub)tenant.
commercial lease) and relevant financial information to
support that eligibility.
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Documenting relief part of the emergency period (existing agreement) and the
tenant believes that the rent relief provided under the existing
Rent relief may be given effect by the landlord and the tenant agreement is less favourable than rent relief that might be
by a written variation to the lease or by any other written provided under the Code, the tenant may make a request for
agreement between the landlord and the tenant that gives effect rent relief to the landlord under the Code. If the tenant makes a
to the rent relief, either directly or indirectly. request, the landlord and the tenant must follow the process as
set out in the Code.
Payment of deferred rent
If the financial circumstances of a tenant materially change after
Unless otherwise agreed by the landlord and tenant in writing, a variation to the lease or an agreement has been reached,
the landlord must not request payment of any part of the the tenant may make a further request for rent relief. If the
deferred rent until the earlier of: tenant makes a further request, the landlord and the tenant
must follow the process set out in the Code.
• the day on which the emergency period ends; and
Outgoings
• the expiry of the term of the lease (excluding any extension).
If the eligible tenant is unable to conduct their business for
The landlord and the tenant must vary the lease, or otherwise
any part of the emergency period, the landlord must consider
agree that, the tenant must pay the deferred rent to the landlord
waiving recovery of outgoings or other expenses payable for
amortised over the period that is the greater of the balance of
the part of the emergency period that the tenant is unable to
the term of the lease and a period of not less than 24 months.
conduct their business.
Extension of term of lease
A landlord may cease to provide, or reduce provision of,
any service at the land or premises as is reasonable in the
The landlord must offer the tenant an extension of the lease
circumstances or in accordance with any reasonable request of
term on the same conditions that applied immediately before
the tenant.
the emergency period. The extension offered must be equivalent
to the period for which the rent is deferred, unless the landlord
If any outgoings are reduced during the emergency period,
and the tenant agree otherwise in writing.
landlords must not require the eligible tenant to pay any
outgoings greater than the tenant’s proportional share of the
The landlord does not have to offer an extension to the tenant if:
reduced outgoing payable under the lease.
• the landlord is the tenant under a head lease and an
If the tenant has already paid an amount greater than its
extension would be inconsistent with the head lease; or
proportional share of the reduced outgoing to the landlord,
• the extension would be inconsistent with any other agreement tenants must be reimbursed the excess amount as soon
relating to the land or premises that are the subject of as possible.
the lease.
Confidentiality
Existing agreements and subsequent requests for rent relief
A landlord or a tenant must not, directly or indirectly, disclose
If before the Code was adopted the landlord and the tenant protected information obtained under or in connection with the
entered into an agreement to vary the lease, or entered into Code unless the disclosure is authorised.
any other agreement, so as to provide rent relief during any
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