8 April 2020

The Prime Minister announced on Tuesday 7 April that commercial tenancies will become subject to a mandatory code of conduct which will be legislated by every State and Territory.

The purpose of the code is to impose a set of leasing principles between owners/landlords and small and medium size enterprises (SMEs) that are eligible for the Federal Government’s JobKeeper payment.

Under the new code:

• Tenants will qualify for rent reductions if the business qualifies to for the JobKeeper payment (and has a turnover of $50 million or less)
• Rent reductions will be based on the tenant’s decline in turnover due to COVID-19 to ensure that the burden is shared between landlords and tenants
• Tenants are required to continue to engage their employees through the JobKeeper payment
• Australian and foreign banks will be required to offer flexibility to landlords and tenants
• Rents for SMEs and not-for-profit tenants in Government owned or leased properties will be waived.

The legislation will be harmonised across all State and Territories, reducing the ability for interstate ownership issues to arise.

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