Commercial Tenancies Code of Conduct set to be unveiled this week

Premier Mark McGowan told State Parliament last Wednesday that a WA Code of Conduct is expected to be ready for operation from this Thursday 28 May. WA is the last state or territory to release its code, despite National Cabinet’s announcement of the leasing principles in early April. Property Council WA has provided a total of 18 pages in submissions and feedback to DMIRS for their consideration in drafting the Code.

We can reveal that DMIRS shared a draft version of the Code with Property Council WA last week, providing us with 24 hours to read and provide preliminary feedback before the Code is finalised. Our initial analysis shows that some of our initial feedback has been considered in drafting the Code, but there remain a number of items we would like to see improved or excluded.

While we are not in a position to share the draft Code with our members, we repeated our preference to see proportionality requirements loosened, in line with Codes introduced interstate. Any moves to include rigid or minimum levels of rent relief that do not reflect a landlord’s financial capacity would be unacceptable to the sector and wreak havoc with many commercial landlords.

We also emphasised the importance of allowing landlords to retain any minimal relief they receive from their own financial institutions, as a requirement to pass this onto tenants would be unfair and counterproductive.

Overall, we stressed the need for the Code to remain flexible to respect and preserve relief measures already negotiated by landlords and tenants prior to the Code’s introduction. Allowing for greater flexibility would also ensure landlords and tenants could negotiate innovative and sensible relief packages that would take both parties’ financial position into account.

Our concerns on these issues have been conveyed to both DMIRS and senior government ministers including the Premier, Treasurer and Commerce Minister. We await to receive further feedback from DMIRS and the release of the draft Code towards the end of this week.