Last week, the Federal Government introduced a new rent relief Code of Conduct that could help your business.
What You Need to Know
The Code of Conduct will apply to your business if it:
is eligible for the JobKeeper Wage Subsidy; and
earns less than $50 million per year.
Rent relief will be in proportion to the reduction in your business’ turnover.
At least half of this rent relief must be in the form of a waiver of the rent (e.g. if you suffer a 60% fall in revenue, then at least 30% of the total relief must be a rent waiver and the other 30% a deferral).
You will need to repay deferred rent over the longer of the balance of the lease term, or 24 months.
No fees, interest or other charges are to be applied with respect to any rent that is waived or deferred.
Your landlord will not be able to terminate your lease or draw on the security you provided for the lease during the pandemic and a reasonable subsequent recovery period.
The above sets out the minimum standards to be applied and parties are free to negotiate a different arrangement if that suits.
At this stage, we don’t believe that the Code will automatically override your lease terms. If you are eligible for rent relief under the Code, you and your landlord will be required to negotiate amendments to your lease to ensure it is Code-compliant.
The Code will also be enforced through a mandatory mediation process, overseen by the states and territories.
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