PM promises relief for struggling tenants
Businesses suffering from the devastating COVID-19 outbreak will receive some relief in the form of a new code of conduct for commercial leases.
In a press conference this afternoon, Prime Minister Scott Morrison said the idea behind Australia's "hibernation strategy" was to allow us to "preserve as much of the foundations and pillars of the economy through this time" to enable us to "rebuild and regrow on the other side".
"That means keeping jobs, keeping businesses, keeping tenancies in place, keeping loans in place and credit lines open … so on the other side of this crisis, the economy is able to rebound again," he said.
Mr Morrison said preserving commercial tenancies was an important part of the wider economic strategy, and that as a result, a mandatory code had been agreed upon.
He said it would be "legislated and regulated as appropriate" in each state or territory's jurisdiction.
The code will apply to either landlords or tenants who have experienced financial hardship of a result of the COVID-19 outbreak and who are eligible for the JobKeeper program.
It will apply to companies with a turnover of $50 million or less, meaning the code is mainly designed to protect small to medium enterprises.
Under the code, "good faith leasing principles" will ensure landlords "must not terminate the lease" for a tenant or draw on securities, and on the flip side, tenants "must honour lease requirements".
To achieve that, there could be "waivers of rent" or "deferrals of rent" over the course of the pandemic period, and rent must be reduced in proportion to the lost revenue of the business.
A binding mediation process will also be introduced, with landlords and tenants required to "sit down and work it out".
Mr Morrison said the burden "must be shared" and that banks must also "come to the table", including "international banks" which must "provide the same levels of support and co-operation we are seeing from Australian banks".
He said the measures would help to preserve leases and the relationship between landlord and tenant, which would keep tenants in properties.
"This is seen as proactive, constructive co-operation between landlords and tenants - we will see this through together."