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http://www.minterellison.com/articles/code-of-conduct-compendium-commercial-leasing-principles-in-covid-19

Code of Conduct compendium: commercial leasing principles in COVID-19

2 minute read + PDF download  27.05.2020

The COVID-19 National Cabinet Mandatory Code of Conduct for commercial leases was introduced to help provide support for SME tenants suffering financial hardship. However, its application has caused uncertainty as each state and territory introduced the legislation in slightly different ways. Our compendium helps to navigate those complexities.

The COVID-19 pandemic has had a significant impact on businesses and the economy across Australia and the world. Aside from health and societal concerns, the pandemic, social distancing regulation and business restrictions have resulted in an economic downturn, with individuals, businesses and governments looking for ways to alleviate the short and long term impacts.

The disruption faced by landlords and tenants has impacted their commercial leases, affecting offices, retail and industrial. In response, the federal government released a Mandatory Code of Conduct, outlining a set of good faith leasing principles to support negotiations between landlords and their tenants.

While the Code aims to balance the interests of landlords and tenants, each state and territory has been tasked to legislate as appropriate. This scenario has resulted in uncertainty across the industry as each state has set out to implement legislation in their own different way.

 

“Complications arise for landlords who either have operations in multiple states or who negotiate agreements with tenants who lease across multiple jurisdictions.”
Virginia Briggs,
Managing Partner, Infrastructure Construction & Property

 

Breaking down the complexity

This compendium outlines the key aspects of the legislation as it applies to each jurisdiction in a themed and logical manner. It also outlines the state-based approach for landlords and tenants navigating land tax, and draws out the importance of Foreign Investment Review Board considerations.

It includes the legislation from Victoria, New South Wales, Queensland, South Australia, the Australian Capital Territory and Tasmania. The Western Australian government is still finalising their legislation, and our compendium will be updated once the information is available. (Northern Territory is unlikely to release specific legislation).

The pace of change can be unnerving for the industry, as so much is unknown about how the Code and the state-based legislation will play out in the future – there is no precedent for a situation like this!

 

“In order to rise above the uncertainty, however, it is critical to remember the spirit in which the Code was introduced.”
 

We hope this compendium will help you to navigate your position during these unprecedented times.

 

SME commercial leasing principles during COVID-19: A jurisdiction by jurisdiction analysis.

To help you navigate the tenancy code of conduct state by state we have developed some FAQs, available as PDF downloads,  to help filter some common questions and concerns some of our clients are faced with. Our contacts listed below are available for further advice.

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http://www.minterellison.com/articles/code-of-conduct-compendium-commercial-leasing-principles-in-covid-19

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