WA landlords count the cost of commercial code

Property Council WA believes WA landlords are being asked to shoulder a disproportionate share of the financial burden of the Covid-19 pandemic.

Before the pandemic, WA’s landlords were hoping to emerge from a long period of high vacancy and rental subsidies and move into a recovery that would gradually start to mirror the low vacancy, rental growth and generally buoyant market experienced by property owners in the Eastern States.

The WA Commercial tenancies code of conduct, released on Friday May 29, applies retrospectively from March 30 to September 29 to landlords and pandemic affected tenants with a “small commercial lease”.

It sets out obligations for owners of commercial buildings occupied by tenants experiencing distress as a result of the Covid-19 pandemic and Property Council WA believes that it places an unfair burden on WA landlords compared to their counterparts in other States.

In other States building owners are obliged to take into account an eligible tenant’s loss of turnover. In WA, landlords must provide rent relief that matches those losses. In other States, landlords with eligible tenants are eligible for a 25 per cent land tax relief rebate if they pass at least that amount on to their tenant. In WA, for a landlord to qualify for the 25 per cent land tax relief they must agree to waive the equivalent of three months’ rent during the pandemic period and freeze tenant outgoings. To qualify for a certain amount of land tax relief, a WA landlord would have to waive roughly ten times that amount of rent.

Members can contact our WA Advocacy Team to receive a copy of MinterEllison’s Commercial Tenancies Code FAQ pack.

WA Executive Sandra Brewer will be speaking at a WA Commercial Tenancies webinar this Wednesday 10 June, joining experts from hosts Grant Thornton and MinterEllison. Click here for webinar details and registration.