Following the National Code of Conduct for retail leasing unveiled by the National Cabinet, various state governments have begun rolling out their respective packages.
As with every policy response to COVID-19, it is incredibly important that state governments get these laws right. That’s why we have advocated to all tiers of government on how to devise solutions that support retailers. These tenancy laws need to strike the right balance or businesses and jobs will be jeopardised.
At the time of writing, Victoria, New South Wales and Queensland have yet to pass legislation but have convened urgent sittings for their respective parliaments. A summary of the proposed changes in each of these jurisdictions is summarised below, but we should note they are not yet legislated, and we will provide updates as each state progresses. The Queensland proposal in particular has been contentious and may well change between now and Wednesday when parliament sits.
As your membership organisation, we have provided our feedback on the Prime Minister’s code. We have written to each state and territory and we have also attended a number of meetings on your behalf to ensure that your concerns have been tabled and we are actively working to ensure that they are also being heard.
At this stage the proposed measures for states yet to pass legislation is as follows:
Victoria
- Six month ban on evictions for the non-payment of rent for commercial tenancies involving small and medium-sized businesses;
- Six month ban for rental increases on residential and commercial properties for a six month period;
- 25% concession on land tax for landlords who provide rent relief to impacted tenants; and
- Deferring remaining land tax to March 2021 for those same landlords.
New South Wales
The Government will give effect to the Code of Conduct, which will operate for a temporary period during the pandemic, and include the following key measures:
- Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code;
- A ban on the termination of a lease for non-payment of rent;
- A freeze in rent increases;
- Up to 25% land tax concession for landlords who pass savings on to tenants through a rent reduction; and
- A further land tax deferral for any outstanding amounts for a three month period for any landlords who claim the land tax concession.
Queensland
- Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code;
- Three month rebate of land tax for 2019-20 for landlords who provide rent relief for eligible commercial tenants; and
- Three month deferral of land tax 2020-21 for landlords who provide rent relief.
Western Australia
The Commercial Tenancies (COVID-19 Response) Bill 2020 will introduce:
- A six-month moratorium on evictions due to non-payment of rent;
- A freeze on rent increases;
- Restrictions on penalties for tenants who do not trade or reduced their trading hours;
- Prohibitions on charging interest on rent arrears;
- The introduction of a dispute resolution process; and
- An ability for government to prescribed a code of conduct.
We will update you on any changes that occur regarding the above, as well as the details of each legislation when it passes the relevant parliament. We understand many of you are still experiencing difficulties despite the release of the code and we would like to take this opportunity to remind you that we can help.
If you are having problems communicating, negotiating or dealing with your landlord, give us call 1800 RETAIL. Additionally, if you would like to learn more about leasing and tenancy you can catch our Retail Leasing Weekly Health Check webinar with Lpc Cresa every Wednesday at 1:00pm AEST.
All the best for the week and keep well.