Details about the Federal scheme for landlords and tenants after COVID-19

The Prime Minister has given us more details of the model for commercial landlords and tenants.

In summary:

1. There is to be a mandatory code to be legislated state-by-state.
2. The code will apply where the landlord or the tenant is eligible for JobKeeper (ie in financial distress) and has a turnover of $50M or less. It is intended to support small or medium sized landlords and tenants.
3. Landlords must not terminate the lease or draw on a Tenant’s security.
4. Tenants must honour the lease.
5. Landlords must reduce rent proportionate to the trading reduction in Tenant’s business through a combination over the course of the pandemic period of rent waivers and rent deferrals.
6. Waiver must account for 50% at least of the reductions provided to the Tenant.
7. Deferrals must be covered over the balance of the lease term, with a minimum of 12 months (ie 3 years remaining on the lease means 3 years to repay; 6 months remaining on the lease means 12 months to pay).
8. It will be overseen through a binding mediation process.
9. The co-operation of the banks is expected.

That’s all the detail I can post at this stage.

We will need to see the details in the legislation of how the deferrals will work.

I will try to post the Prime Minister’s press release when I can find it.

The video of the Prime Minister’s speech is available here: https://www.facebook.com/abcnews.au/videos/2909719355753301/