03/09/2020

Current as at September 2020

The ongoing effects of COVID-19 have resulted in extensions to the relief period in a number of jurisdictions to offer more protection to commercial tenants. However, this does not mean previous arrangements negotiated between commercial tenants and their landlords automatically extend. Where your organisation has obtained relief, this relief still expires (or may have already expired) under the previous expiry dates of the Regulations. These dates are as follows:

  • New South Wales, 24 October 2020;
  • Victoria, 29 December 2020 (unless re-negotiation occurred following the 20 August amendments which extended the period 31 December 2020);
  • Queensland, 30 September 2020;
  • Western Australia, 30 September 2020;
  • Australian Capital Territory, check the date of any agreement made;
  • South Australia, check the date of any agreement made;
  • Tasmania, 30 September 2020;

 This means that your organisation will need to re-establish its eligibility for rental relief for the extended period. In Victoria, amendments made on 4 September 2020 mean you should be prepared to provide a statutory declaration as well as other documentation to establish your eligibility.

The economic consequences of COVID-19 have had a major impact on the ability of organisations to generate cash flow and pay ongoing liabilities, including rent.

The Australian State and Territory Governments  implemented laws to assist in renegotiating the terms of commercial leases where lessees have been affected by COVID-19. These laws brought into effect the Australian Government’s National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID-19 (Code). The Code sets out guiding principles for the States and Territories to reflect in legislation and for negotiating temporary amendments to commercial leasing arrangements. It also provides for cash flow relief to certain lessees during the COVID-19 pandemic and for a reasonable recovery period afterwards. The Code aims to create good faith leasing principles between landlords and tenants of commercial tenancies that are suffering financial stress or hardship due to COVID-19.

This article is intended as a broad guide to help charities and not-for-profit organisations determine:

  • whether your organisation is eligible to negotiate temporary rental relief (and receive other protections) pursuant to the measures that have been implemented in your State or Territory; and if so,
  • what lease terms can be negotiated and amended.

This article does not contain an exhaustive analysis of all commercial lease relief measures in each jurisdiction. If you believe rental relief may be available to your charity or not-for-profit organisation, we recommend you seek legal advice to determine the application of the applicable legislation to your organisation’s particular circumstances.

What is happening in each State and Territory?

Each jurisdiction has  introduced legislation to assist organisations with renegotiating the terms of commercial leases where lessees have been affected by COVID-19 (Acts). All jurisdictions except for the Northern Territory, have also introduced regulations to give effect to the Code and the Acts (Regulations). These Regulations address the most significant principles of the Code and outline specific measures for temporary rent relief, including proportionate rent reductions, waivers and deferrals. The ongoing effects of COVID-19 have resulted in amendments to the Regulations to extend the relief period in a number of jurisdictions. In some jurisdictions the new Regulations have also added additional protections for commercial tenants.

At present, the Northern Territory has issued a notice under the Act, but we are still waiting for this jurisdictions to implement a specific regulation to give more fulsome effect to the Code. In the Northern Territory, the operation of the Code is given (limited) effect through the relevant Act.

Do the relief measures apply to your organisation’s tenancy?

Your organisation’s ability to benefit from the relief measures will vary depending on the jurisdiction. The threshold matters in each jurisdiction where Regulations have been implemented centre around the economic impact of COVID-19 on your organisation. Broadly speaking, your charity or not-for-profit may be able to access rental relief if it:

  • qualifies for the Australian Government’s JobKeeper scheme; and
  • has a turnover of less than $50 million in FY2018-19.

Organisations should be aware that there has been some change to JobKeeper arrangements, effective from 28 September 2020.

Another important factor is the type of lease your organisation has. Again, this varies depending on the jurisdiction. For example, in New South Wales the applicable Regulations generally cover retail shop leases and leases for commercial purposes (but exclude certain agricultural leases and leases entered into after 24 April 2020).

For the Regulations in each jurisdiction, access to JobKeeper is a clear criterion.

How can the relief measures help my organisation?

Any potential renegotiation of rent and other terms of your organisation’s commercial lease must be done in accordance with the parameters set out in your State or Territory’s applicable legislation, with any renegotiation required to be undertaken in good faith.

The foundation for any lease renegotiation will be the extent of the economic impact of the COVID-19 pandemic on your organisation, along with the principles set out in the Code.

For charities and not-for-profit organisations eligible for relief, the principles for each jurisdiction that are likely to be the most significant in any negotiations are set out in our jurisdiction summary. Alternatively, you can view the principles specific to your jurisdiction by selecting an option from this list:

  • New South Wales;
  • Victoria;
  • Queensland;
  • Western Australia;
  • Australian Capital Territory;
  • South Australia;
  • Northern Territory; and
  • Tasmania.

Are there any prohibitions or restrictions in place?

Under the legislation introduced in each State and Territory, a number of prohibitions and restrictions on commercial leases have also been brought into effect. Again, these vary slightly depending on the jurisdiction but may include that:

  • your organisation’s landlord must not increase your organisation’s rent;
  • if your organisation fails to pay rent, its landlord must not, for that reason, evict your organisation from the premises, exercise a right of re-entry to the premises, recover the premises, require a payment of interest or fee for unpaid rent, recover the security bond, terminate the lease, or issue proceedings in a court or tribunal against your organisation for failing to pay rent or outgoings; and
  • if your organisation’s landlord is entitled to reduced payments for land tax, statutory charges (such as local council rates) or insurance, your organisation does not have to pay such charges to the extent of the reduction the landlord is entitled to.

However, any other lawful action to which your organisation and its landlord is agreeable is permitted. For example, your organisation and its landlord can agree to terminate the commercial lease.

It is important to note that your organisation’s landlord can take action against your organisation on grounds that are not related to the economic impacts of the COVID-19 pandemic. For example, your organisation’s landlord may terminate the lease if your organisation has breached the lease by damaging the premises. 

What if my organisation’s landlord will not agree to rent reductions and renegotiated terms?

If your organisation has attempted to negotiate in good faith with its landlord but the landlord will not agree to renegotiate rent and lease terms in accordance with your organisation’s entitlements, you may be able to apply for mediation. If mediation fails to resolve the dispute, legal proceedings may be commenced. If your organisation finds itself in this position, it should seek legal advice.

How can we help?

If your charity or not-for-profit is interested in determining how it might be able to access rental relief under the applicable legislation, our team of charity and not-for-profit law experts would be pleased to help you determine what Government rental relief measures are available. We can also provide advice on eligibility for other Government relief measures, as well as the legal impacts of COVID-19 on your organisation’s governance and operations.

Summary

What does it mean for my organisation in New South Wales?

Regulation

Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) as amended by the Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) 

Relevant period

24 April 2020 – 31 December 2020

Proportionate reductions in rent

(Code – Principle 3)

Your organisation is entitled to negotiate a reduction in rent that is proportionate to the reduction in your organisation’s trade during the COVID-19 pandemic period if it is an impacted lessee for the purposes of the Regulation.  For example, if your organisation has experienced a 30% reduction in trade, it is entitled to 30% cash flow relief. Reductions in rent are available through rental waivers and rental deferrals.

You should be prepared to substantiate your organisation’s reduction in trade with appropriate financial data and business records.

Rental waivers

(Code – Principle 4)

Your organisation is entitled to negotiate at least half of its rent reductions through rental waivers. A rental waiver means that your organisation will never need to pay the amount waived. For example, if your organisation has experienced a 30% reduction in trade, a minimum of 15% of your rental relief must be provided through a rental waiver.

Rental deferrals

(Code – Principle 5)

Your organisation is entitled to have the rest of its rent reductions provided through rental deferrals. A rental deferral means that your organisation will eventually need to pay back the amount deferred. For example, if your organisation has experienced a 30% reduction in trade, a maximum of 15% of your rental relief can be provided through a rental deferral.

Landlords sharing benefits

(Code – Principle 7)

Where your organisation’s landlord receives a benefit from a deferral of loan repayments (whether provided by a financial institution as part of the Australian Bankers Association’s COVID-19 response, or any other deferral of loan repayments), the benefit should be shared with your organisation in a proportionate manner.

Waiving other expenses

(Code – Principle 8)

Your organisation’s landlord should seek to waive any other expenses or outgoings payable by your organisation under lease terms while your organisation is not able to trade. For example, this may include utilities, council and water rates, body corporate fees and insurance. However, it is important to note that the landlord reserves the right to reduce such services as required.

Repayment

(Code – Principle 9)

If any negotiated arrangements require repayment by your organisation, repayment should occur over an extended period of time so that your organisation is not faced with undue financial burden. Repayment should not commence until either the COVID-19 pandemic ends or the existing lease expires (whichever comes first).

Fees, interest and other charges

(Code – Principle 10)

Your organisation’s landlord should not charge fees, interest or other charges in relation to any rent waived or deferred.

Lease term extension

(Code – Principle 12)

Your organisation should be provided with an opportunity to extend its lease for an equivalent period of the rental waiver or rental deferral period, so it has additional time to trade on existing lease terms.

Rent increase (Code – Principle 13)

Your organisation’s landlord cannot increase the rent during the emergency period or retrospectively for that period.

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Summary

What does it mean for my organisation in Victoria?

Regulation

COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Vic), as amended by the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Act 2020 (Vic)

Relevant period

29 March 2020 –  31 December 2020

Proportionate reductions in rent

(Code – Principle 3)

Your organisation is entitled to negotiate a reduction in rent that is proportionate to the reduction in your organisation’s trade during the COVID-19 pandemic period.  For example, if your organisation has experienced a 30% reduction in trade, it is entitled to 30% cash flow relief. Reductions in rent are available through rental waivers and rental deferrals.

You should be prepared to substantiate your organisation’s reduction in trade with appropriate financial data and business records.

Rental waivers

(Code – Principle 4)

Your organisation is entitled to negotiate rent relief with no less than 50% of the relief being provided in the form of a waiver of rent. A rental waiver means that your organisation will never need to pay the amount waived.

Rental deferrals

(Code – Principle 5)

Your organisation is entitled to have the rest of its rent reductions provided through rental deferrals. The deferred rent does not start to become payable until the date of expiration of the Regulation or the expiry of the term of the eligible lease which includes any extension granted under the Regulation (whichever comes first).

Landlords sharing benefits

(Code – Principle 7)

Where your organisation’s landlord receives a benefit from a deferral of loan repayments (whether provided by a financial institution as part of the Australian Bankers Association’s COVID-19 response, or any other deferral of loan repayments), the benefit should be shared with your organisation in a proportionate manner or the landlord must reimburse the excess amount to your organisation as soon as possible.

Waiving other expenses

(Code – Principle 8)

Your organisation’s landlord should seek to waive any other expenses or outgoings payable by your organisation under lease terms while your organisation is not able to trade. For example, this may include utilities, council and water rates, body corporate fees and insurance. However, it is important to note that the landlord reserves the right to reduce such services as required. Where outgoings are charged by the landlord, the amount to be paid is not allowed to be greater than your organisation’s proportional share of the reduced outgoing. If your organisation has already paid outgoings, and the amount was greater than the proportional share of the reduced outgoing, your organisation must reimburse the excess amount as soon as possible.  

Repayment

(Code – Principle 9)

If any negotiated arrangements require repayment by your organisation, the landlord must not request payment of any part of the deferred rent prior to 31 December 2020.

Fees, interest and other charges

(Code – Principle 10)

Your organisation’s landlord should not charge fees, interest or other charges in relation to any rent waived or deferred.

Lease term extension

(Code – Principle 12)

Your organisation should be provided with an opportunity to extend its lease for an equivalent period of the rental waiver or rental deferral period, so it has additional time to trade on existing lease terms. The landlord must offer to extend the term of the lease on the same terms and conditions as applied before the commencement of the Regulations.

Rent increase (Code – Principle 13)

Unless otherwise agreed, your organisation’s landlord cannot increase the rent during the term of the Regulation.

 

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Summary

What does it mean for my organisation in the Australian Capital Territory

Regulation

Leases (Commercial and Retail) COVID-19 Emergency Response Commercial Leases Declaration 2020 (No 2) (ACT)

Relevant  period

1 April 2020 – the earlier of:

  • either:
    • the first day that a COVID-19 emergency is no longer in place (being when a state of emergency declared under the Emergencies Act 2004 (ACT) or an emergency is declared under the Health Act 1997 (ACT)); or
    • the day notified by the Minister; or
  • 31 January 2020.

Proportionate reductions in rent

(Code – Principle 3)

Your organisation is entitled to negotiate a reduction in rent that is proportionate to the reduction in your organisation’s trade during the COVID-19 pandemic period.  For example, if your organisation has experienced a 30% reduction in trade, it is entitled to 30% cash flow relief. Reductions in rent are available through rental waivers and rental deferrals.

You should be prepared to substantiate your organisation’s reduction in trade with appropriate financial data and business records.

Rental waivers

(Code – Principle 4)

Your organisation is entitled to negotiate at least half of its rent reductions through rental waivers. A rental waiver means that your organisation will never need to pay the amount waived. For example, if your organisation has experienced a 30% reduction in trade, a minimum of 15% of your rental relief must be provided through a rental waiver.

Rental deferrals

(Code – Principle 5)

Your organisation is entitled to have the rest of its rent reductions provided through rental deferrals. A rental deferral means that your organisation will eventually need to pay back the amount deferred. For example, if your organisation has experienced a 30% reduction in trade, a maximum of 15% of your rental relief can be provided through a rental deferral.

Landlords sharing benefits

(Code – Principle 7)

Where your organisation’s landlord receives a benefit from a deferral of loan repayments (whether provided by a financial institution as part of the Australian Bankers Association’s COVID-19 response, or any other deferral of loan repayments), the benefit should be shared with your organisation in a proportionate manner.

Waiving other expenses

(Code – Principle 8)

Your organisation’s landlord should seek to waive any other expenses or outgoings payable by your organisation under lease terms while your organisation is not able to trade. For example, this may include utilities, council and water rates, body corporate fees and insurance. However, it is important to note that the landlord reserves the right to reduce such services as required.

Repayment

(Code – Principle 9)

If any negotiated arrangements require repayment by your organisation, repayment should be amortised over the balance of the lease term and for a period no less than 24 months, whichever is the greater, unless otherwise agreed by the parties.

Fees, interest and other charges

(Code – Principle 10)

Your organisation’s landlord should not charge fees, interest or other charges in relation to any rent waived or deferred.

Lease term extension

(Code – Principle 12)

Your organisation should be provided with an opportunity to extend its lease for an equivalent period of the rental waiver or rental deferral period, so it has additional time to trade on existing lease terms.

Rent increase (Code – Principle 13)

Your organisation’s landlord cannot increase the rent during the Relevant Period unless rent increases are determined by reference to the turnover of the business carried on at the leased premises.

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Summary

What does it mean for my organisation in Western Australia

Regulation

Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA)

Relevant period

29 March 2020 – 28 March 2021

Proportionate reductions in rent

(Code – Principle 3)

Your organisation is entitled to negotiate a reduction in rent that is at least proportionate to the reduction in your organisation’s trade during the COVID-19 pandemic period.  For example, if your organisation has experienced a 30% reduction in trade, it is entitled to 30% cash flow relief. Reductions in rent are available through rental waivers and rental deferrals.

You should be prepared to substantiate your organisation’s reduction in trade with appropriate financial data and business records.

Rental waivers

(Code – Principle 4)

Your organisation is entitled to negotiate at least half of its rent reductions through rental waivers if:

      1. failure to provide more than 50% of the rent relief in the form of a waiver would compromise your organisation’s capacity to fulfil its ingoing obligations under the lease; and
      2. the landlord has the financial capacity to provide more than 50% of the rent relief in the form of a waiver of rent.

A rental waiver means that your organisation will never need to pay the amount waived. For example, if your organisation has experienced a 30% reduction in trade, a minimum of 15% of your rental relief must be provided through a rental waiver if the above mentioned requirements are satisfied.

Rental deferrals

(Code – Principle 5)

Your organisation is entitled to have the rest of its rent reductions provided through rental deferrals, amortised over the balance of the term of the lease or 24 months (whichever is longer). A rental deferral means that your organisation will eventually need to pay back the amount deferred. For example, if your organisation has experienced a 30% reduction in trade, a maximum of 15% of your rental relief can be provided through a rental deferral.

Landlords sharing benefits

(Code – Principle 7)

There is no obligation on the landlord to pass on benefits. Any passing on of any reduction in statutory charges will be subject to negotiation between the parties, having regard to the leasing principles of the Code.

Waiving other expenses

(Code – Principle 8)

Whilst there is no obligation on landlords to waive the recovery of outgoings or other expenses under the lease during the period that your organisation is unable to trade from the premises, the landlord does have an obligation to consider doing so. A waiver of outgoings or other charges during a period where your organisation is unable to trade will be subject to negotiation between the parties.

Repayment

(Code – Principle 9)

If any negotiated arrangements require repayment by your organisation, repayment should occur over an extended period of time so that your organisation is not faced with undue financial burden. Repayment should not commence until either the COVID-19 pandemic ends or the existing lease expires (whichever comes first).

Fees, interest and other charges

(Code – Principle 10)

Your organisation’s landlord should not charge fees, interest or other charges in relation to any rent waived or deferred.

Lease term extension

(Code – Principle 12)

Your organisation should be provided with an opportunity to extend its lease for an equivalent period of the rental waiver or rental deferral period, so it has additional time to trade on existing lease terms. However, where an extension is inconsistent with the terms of the lease or with another contract or agreement the landlord has with a third party, the landlord does not need to offer an extension.

Rent increase (Code – Principle 13)

Your organisation’s landlord cannot increase the rent during the term of the Regulation. Any rent reviews undertaken between 30 March 2020 and 23 April 2020 that resulted in an increase in rent are valid, but the increase is not effective until the end of the COVID-19 emergency period.

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Summary

What does it mean for my organisation in Queensland

Regulation

Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld)

Relevant period

29 March 2020 – 31 December 2020

Proportionate reductions in rent

(Code – Principle 3)

Your organisation is entitled to negotiate a reduction in rent that is proportionate to the reduction in your organisation’s trade during the COVID-19 pandemic period.  For example, if your organisation has experienced a 30% reduction in trade, it is entitled to 30% cash flow relief. Reductions in rent are available through rental waivers and rental deferrals.

You should be prepared to substantiate your organisation’s reduction in trade with appropriate financial data and business records.

Rental waivers

(Code – Principle 4)

Your organisation is entitled to negotiate at least half of its rent reductions through rental waivers. A rental waiver means that your organisation will never need to pay the amount waived. For example, if your organisation has experienced a 30% reduction in trade, a minimum of 15% of your rental relief must be provided through a rental waiver.

Rental deferrals

(Code – Principle 5)

Your organisation is entitled to have the rest of its rent reductions provided through rental deferrals to be paid back using a method agreed by the parties over a period of at least two years but no more than three years. The deferred rent does not start to become payable until the day after the expiration of the Regulation (which is 1 October 2020, unless further extended).

Landlords sharing benefits

(Code – Principle 7)

The passing on of any reduction in statutory charges and any deferral of loan payments will be subject to negotiation between the parties. However, where your organisation’s landlord received land tax relief, this must be passed on to your organisation in the form of rent relief.

Waiving other expenses

(Code – Principle 8)

There is no obligation on landlords to waive the recovery of outgoings or other expenses under the lease during the period that your organisation is unable to trade from the premises. A waiver of outgoings or other charges during a period where your organisation is unable to trade will be subject to negotiation between the parties to the extent that it is reasonable in the circumstances and subject to any reasonable request by your organisation.

Repayment

(Code – Principle 9)

If any negotiated arrangements require repayment by your organisation, repayment should not occur until the day after the relevant period ends and the repayment must be amortised, using a method agreed between the parties, over a period of at least 2 years but no more than 3 years.

Fees, interest and other charges

(Code – Principle 10)

Your organisation’s landlord should not charge fees, interest or other charges in relation to any rent waived or deferred unless your organisation has failed to comply with the conditions on which the rent was deferred.

Lease term extension

(Code – Principle 12)

Your organisation should be provided with an opportunity to extend its lease for an equivalent period of the rental waiver or rental deferral period, so it has additional time to trade on existing lease terms. The landlord must offer to extend the term of the lease on the same terms and conditions as applied before the commencement of the Regulations, except that the rent payable during the extension must be adjusted for the waiver or deferral.

Rent increase (Code – Principle 13)

Your organisation’s landlord cannot increase the rent during the Relevant Period unless rent increases are determined by reference to the turnover of the business carried on at the leased premises.

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Summary

What does it mean for my organisation in South Australia

Regulation

COVID-19 Emergency Response (Commercial Leases No. 2) Regulations 2020 (SA)

Relevant period

30 March 2020 – 3 January 2021

Proportionate reductions in rent

(Code – Principle 3)

Landlords are not required to provide any reduction in rent. Accordingly, any reduction in rent will be subject to negotiation between the parties, having regard to the leasing principles of the Code.

Rental waivers

(Code – Principle 4)

There is no obligation on the landlord to decrease rent by way of a waiver based on your organisation’s reduction in turnover caused by COVID-19.

Rental deferrals

(Code – Principle 5)

There is no obligation on the landlord to defer rent based on your organisation’s reduction in turnover caused by COVID-19.

Landlords sharing benefits

(Code – Principle 7)

The passing on of any reduction in statutory charges and any deferral of loan payments will be subject to negotiation between the parties, having regard to the leasing principles of the Code.

Waiving other expenses

(Code – Principle 8)

There is no obligation on landlords to waive the recovery of outgoings or other expenses under the lease during the period that your organisation is unable to trade from the premises. A waiver of outgoings or other charges during a period where your organisation is unable to trade will be subject to negotiation between the parties.

Repayment

(Code – Principle 9)

-

Fees, interest and other charges

(Code – Principle 10)

-

Lease term extension

(Code – Principle 12)

There is no obligation on the landlord to extend the term of the lease based on your organisation’s reduction in turnover caused by COVID-19.

Rent increase (Code – Principle 13)

Unless otherwise agreed, your organisation’s landlord cannot increase the rent during the term of the Regulation.

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Summary

What does it mean for my organisation in Tasmania

Act and Regulation

COVID-19 Disease Emergency (Commercial Leases) Act 2020 (Tas) and the COVID-19 Disease Emergency (Commercial Leases) Regulations 2020 (Tas)

Relevant period

1 April 2020 – 1 December 2020.

Proportionate reductions in rent

(Code – Principle 3)

Your organisation is entitled to negotiate a reduction in rent proportionate to the reduction in your organisation’s trade during the COVID-19 pandemic period.  For example, if your organisation has experienced a 30% reduction in trade in any continuous one month period since 1 February 2020, it is entitled to 30% cashflow relief (provided the turnover from 1 February 2019 – 31 January 2020 is not more than $50 million). Reductions in rent are available through rental waivers and rental deferrals. You should be prepared to substantiate your organisation’s reduction in trade with appropriate financial data and business records.

Rental waivers

(Code – Principle 4)

Your organisation is entitled to negotiate rent relief with no less than 50% in the form of a waiver of rent. A rental waiver means that your organisation will never need to pay the amount waived. For example, if your organisation has experienced a 30% reduction in trade, a minimum of 15% of your rental relief must be provided through a rental waiver. However, any waiver will be required to take the financial position of your organisation’s landlord into account.

Rental deferrals

(Code – Principle 5)

Your organisation is entitled to have the rest of its rent reductions provided through rental deferrals which is amortised over two years or the remaining lease term, whichever is greater. A rental deferral means that your organisation will eventually need to pay back the amount deferred. For example, if your organisation has experienced a 30% reduction in trade, a maximum of 15% of your rental relief can be provided through a rental deferral.

Landlords sharing benefits

(Code – Principle 7)

Where your organisation’s landlord receives a benefit from a deferral of loan repayments (whether provided by a financial institution as part of the Australian Bankers Association’s COVID-19 response, or any other deferral of loan repayments), the benefit should be shared with your organisation in a proportionate manner.

Waiving other expenses

(Code – Principle 8)

Your organisation’s landlord  may (but is not required to) waive other expense or outgoings payable by your organisation under lease terms while your organisation is not able to trade. For example, this may include utilities, council and water rates, body corporate fees and insurance. However, it is important to note that the landlord reserves the right to reduce such services as required.

Repayment

(Code – Principle 9)

If any negotiated arrangements require repayment by your organisation, repayment should occur over an extended period of time so that your organisation is not faced with undue financial burden. Repayment is ultimately determined by the parties when renegotiating the lease but should not commence until the COVID-19 pandemic ends and should be spread over the remaining duration of the lease or a period of a minimum of 24 months, whichever is greater.

Fees, interest and other charges

(Code – Principle 10)

Your organisation’s landlord should not charge fees, interest or other charges in relation to any rent waived or deferred.

Lease term extension

(Code – Principle 12)

Your organisation’s landlord must extend the term of the lease if your organisation requests an extension.  This is so your organisation  has additional time to trade on existing lease terms.

Rent increase (Code – Principle 13)

Unless otherwise agreed, your organisation’s landlord cannot increase the rent during the term of the Regulation.

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Summary

What does it mean for my organisation in the Northern Territory

Regulation

Business Tenancies COVID-19 Modification Notice 2020 (NT)

Relevant period

18 March 2020 - the day that a COVID-19 emergency declaration is no longer in place.

Proportionate reductions in rent

(Code – Principle 3)

Landlords are not required to provide any reduction in rent. Accordingly, any reduction in rent will be subject to negotiation between the parties.

Rental waivers

(Code – Principle 4)

There is no obligation on the landlord to decrease rent by way of a waiver based on your organisation’s reduction in turnover caused by COVID-19.

Rental deferrals

(Code – Principle 5)

There is no obligation on the landlord to defer rent based on your organisation’s reduction in turnover caused by COVID-19.

Landlords sharing benefits

(Code – Principle 7)

The passing on of any reduction in statutory charges and any deferral of loan payments will be subject to negotiation between the parties, having regard to the leasing principles of the Code.

Waiving other expenses

(Code – Principle 8)

There is no obligation on landlords to waive the recovery of outgoings or other expenses under the lease during the period that your organisation is unable to trade from the premises. A waiver of outgoings or other charges during a period where your organisation is unable to trade will be subject to negotiation between the parties.

Repayment

(Code – Principle 9)

-

Fees, interest and other charges

(Code – Principle 10)

-

Lease term extension

(Code – Principle 12)

There is no obligation on the landlord to extend the term of the lease based on your organisation’s reduction in turnover caused by COVID-19.

Rent increase (Code – Principle 13)

-

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