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Relief For Commercial Tenants

Relief For Commercial Tenants

  • Thursday, 30 April 2020 16:53

The Government has announced a range of measures to help renters. This includes a temporary hold on evictions and a mandatory code of conduct for commercial tenancies to support small and medium sized enterprises (SMEs) affected by COVID-19.


Evictions will be put on hold over the next 6 months for commercial and residential tenants in financial distress, who are unable to meet their commitments due to the impact of COVID-19.


A mandatory code of conduct introduced on 7 April 2020 outlines a set of “good faith” leasing principles for commercial tenancies (including retail, office and industrial) between owners, operators, other landlords and tenants.

This code applies to tenants that are:

  • a small to medium (SME) sized business with an annual turnover of up to $50 million; and those that are
  • eligible for the JobKeeper Payment (threshold 30 per cent drop in turnover).

Rent reductions will be based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants.

Before the code becomes enforceable, it still needs to be incorporated into the existing legislative and regulative framework of each state and territory. New South Wales (NSW) was the only state to have completed its own regulations on 24 April 2020, and in line with the national code.

Once this is done, all eligible tenants will be entitled to receive relief in the form of waivers or deferrals of rent for the duration of the COVID-19 pandemic.

At least 50 per cent of that relief takes the form of a rent waiver. The rent that is deferred is then payable after the COVID-19 pandemic and potentially spread over two subsequent years. For example, a 60 per cent reduction in tenant turnover would result in a 30 per cent rent reduction and 30 per cent in deferred rent, paid at the end of the recovery period.

The policy will include a mutual obligation requirement on the small and medium sized businesses and not-for-profit tenants to continue to engage their employees through the JobKeeper Payment where eligible, and if applicable, provide rent relief to their subtenants.

Australian and foreign banks, along with other financial institutions operating in Australia, are expected to support landlords and tenants with appropriate flexibility as they work to implement the mandatory Code.

The Government is also waiving rents for all its small and medium enterprises and not-for-profit tenants within its owned and leased property across Australia.


The code includes a common set of principles. These include that:

  • landlords must not terminate leases for non-payment of rent during the COVID-19 pandemic (or reasonable recovery period).
  • tenants must stay committed to their lease terms (subject to amendments).
  • landlords must offer reductions in rent (as waivers or deferrals) based on the tenant’s reduction in trade during COVID-19.
  • benefits that owners get for their properties (e.g. reduced charges, land tax, deferred loan payments) should be passed on to the tenant (in the appropriate proportion).


These measures will be implemented and regulated by your relevant State or Territory Government. You can find out how to access this assistance through your relevant state or territory.


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