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.”
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.
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.”