COMMERCIAL LEASING GUIDELINE EXTENDED
An extension to the mandatory leasing provisions introduced to give effect to the National Commercial Code of Conduct, has now been enacted through the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020. The initial response period is due to expire today.
The amendments introduce an ‘extension period’ and separate the requirements between the response period (29 March 2020 to 30 September 2020) and the extension period (1 October 2020 to 31 December 2020). The Property Council has been vocal in its opposition to the extension, and provided a submission on the draft regulation, resulting in changes to the relief provisions.
Given the ongoing impact of the Regulation on members, the Property Council successfully advocated for an expansion of land tax rebates available for landlords. A further 25 per cent rebate for the 2020-21 land tax assessment year was announced through the Government’s COVID-19 Fiscal and Economic Review in early September. Further information on land tax rebates is available here.
Key amendments to the Regulation include:
The $50 million SME turnover threshold remains, however, only those tenants entitled to JobKeeper 2.0 will be covered by the extension period.
Landlords are required to provide rent relief during the extension period, however, the minimum 50% waiver of rent no longer applies.
Rent reviews and increases under a lease can be carried out during the response. But the increases can only be passed on when the tenant no longer receives protections from either the response or extension periods.
Agreements reached between parties prior to the Regulation or the Amendment Regulation being made, or which are inconsistent with the Regulation or the Amendment Regulation, remain valid and enforceable.
It remains open to a tenant to seek a further reduction of rent during either the response period or the extension period where their circumstances have materially adversely changed.
The dispute resolution provisions have been extended to apply to the extension period.
You can access the Amendment Regulation here.
The Queensland Small Business Commissioner will continue to assist with resolution and mediation of COVID-19 affected small businesses leases.