Scott Morrison Announcement - Rent Package for Commercial Tenants affected by Coronavirus

Scott Morrison Announcement - Rent Package for Commercial Tenants affected by Coronavirus

Prime Minister Scott Morrison announced new rental waivers and deferrals for commercial tenants hit by the impact of the coronavirus crisis.

Under the scheme, which was announced after a meeting of the National Cabinet on Tuesday, landlords will have to reduce leases in proportion to the reduction in the tenant's business.

The waivers will have to account for at least 50 per cent of the reduction in business.

Deferrals — rental payments that will need to be made, but can be put off — must be spread over the remaining time on a lease and for no less than 24 months.

That means that if a tenant had three months remaining on a lease, they would still have at least a year to make any deferred rent payment.

The code will apply to any tenancies where the landlord or tenant applies for JobKeeper and where they have a turnover of $50 million or less, Mr Morrison said.

The arrangements will be overseen by binding mediation and a mandatory code will be rolled out in each state and territory.

Mr Morrison said landlords were legally required to speak with tenants about rental arrangements and if they refused they would "forfeit their way out of the lease".

"This preserves the lease, it preserves the relationship, it keeps the tenant in the property," the PM said.

"The code brings together a set of good-faith leasing principles."

"Landlords must not terminate the lease or draw on a tenant's security. Likewise, tenants must honour the lease."

For the larger commercial landlords, Mr Morrison is calling on banks to provide support.

Source: ABC News https://www.abc.net.au/news/2020-04-07/scott-morrison-commercial-tenants-coronavirus-measures/12129178

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