Acknowledgement: this article was written by Clayton Utz and published by them on 24 April 2020. LPC provides full acknowledgement to Clayton Utz for their efforts including research and content. It has been copied and pasted from their publication and edited slightly.
Australian Capital Territory
Current position: Legislation to allow measures through Ministerial declaration. No declarations have been made, but proposed measures have been announced
Eligibility: No announcements to date
Eviction and rent increase bans: No announcements to date
Negotiation requirements for rent arrangements: tba
Additional relief: Rates rebates of $2,622 will be available to commercial properties with an unimproved value of $2m or less. [NB: No land tax on commercial properties in the ACT – land tax is effectively included in rates.]
What's next?: Further details to be provided regarding the announced stimulus package.
Ministerial declaration expected to be made under COVID-19 Emergency Response Act 2020 (ACT) and the new Section 177 of the Leases (Commercial and Retail) Act 2001 regarding commercial tenancies in the near future.
New South Wales
Current position: Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW Regulation) made with respect to retail and commercial leases on 24 April 2020. Measures announced in relation to land tax relief
Eligibility: The NSW Regulation applies to "commercial leases", being a retail shop lease (as defined in the Retail Leases Act 1994) and any agreement relating to the leasing of premises or land for commercial purposes. Leases entered into after 24 April 2020, other than a lease entered into by means of an option to extend or renew on the same terms and leases under the Agricultural Tenancies Act 1990 are not covered by the NSW Regulation. A lessee is eligible for relief if the lessee qualifies for the JobKeeper Scheme and had turnover for the 2018-2019 financial year which was less than $50 million:
- if the lessee is a franchisee, in relation to the turnover at the subject premises;
- if the lessee is a corporate member of a group (ie. related bodies corporate), in relation to the turnover of the group; or
- in any other case, the turnover of the business conducted by the lessee.
- turnover includes turnover from internet sales or services.
Eviction and rent increase bans: Lessor must not exercise its rights under the lease, including its rights to terminate or recover possession, for non-payment of rent, outgoings or for not opening for business for the specified hours during the 6 month period from 24 April 2020. The landlord must not increase the rent for the 6-month period from 24 April 2020
Negotiation requirements for rent arrangements: A lessor must not take action for a failure to pay rent unless the lessor has negotiated the rent and other terms of the commercial lease. The negotiation must be in good faith and have regard to the economic impacts of the COVID-19 pandemic and the leasing principles set out in the Code
Additional relief: If a lessee is required to pay land tax, statutory charges or insurance under the lease and the amount payable by the lessor is reduced, the lessee is exempted from the obligation to pay those amounts under the lease in the same proportion as the reduction received by the lessor.
Announced: land tax concession of up to 25% for current year and deferral of outstanding payments for three months for eligible landlords if they pass savings on to tenants.
What's next?: NSW Parliament is expected to deliberate and pass $440M relief package in relation to land tax in the coming weeks. No date has been set for specific legislation to implement the land tax relief package
Northern Territory
Current position: Legislation was enacted on Friday 24 April 2020 (with effect from 21 April 2020) which enables the Minister to issue during the Emergency Period (currently 18 March 2020 to 25 June 2020 and subject to any further extensions) "modification notices" affecting leases and tenancies arrangements. A modification notice may affect tenancies arrangements which would not otherwise be subject to the provisions in the Law of Property Act 2000 and Business Tenancies (Fair Dealings) Act 2003 (NT Tenancies Legislation). Modification notices providing the details of the measures to be implemented are yet to be gazetted
Eligibility: applies to tenants suffering "substantial hardship due to the coronavirus crisis". Further details of the eligibility criteria are to be set out in a gazetted modification notice. It is envisaged that any measures may also apply to tenancies to which the NT Tenancies Legislation would not otherwise apply (such as short-term leases and equitable leases)
Eviction and rent increase bans: The legislation does not impose a complete moratorium on actions for possession by a landlord. Instead, it provides that a modification notice may require that a landlord must engage in a minimum period, not longer than 30 business days, of good faith negotiation with a tenant before the landlord issues a notice to quit premises. Applications for re-entry may be made to the court of competent jurisdiction (Supreme Court’s jurisdiction amended to a monetary amount in excess of $200,000). For applications made to the Local Court (claims of $200,000 or less), alternative dispute provisions will apply
Negotiation requirements for rent arrangements: Announced: requirement to negotiate in accordance with Code. Landlords who negotiate changes to arrangements may be eligible for payroll tax and utilities charges relief. The details of the negotiations (ie. the subject matter of negotiations information to be provided by the parties to enable negotiations, etc.) will be set out in gazetted modification notices
Additional relief: Payroll tax and utilities charges relief – no land tax in NT.
What's next?: It is expected that a modification notice setting out the details of the measures to be implemented will be gazetted in the near future
Queensland
Current position: Legislation has been passed which allows regulations to be made for retail and other prescribed leases for responding to the COVID-19 emergency. Regulations have not yet been released or implemented
Eligibility: Regulations may apply to non-residential leases, which includes retail shop leases and other non-residential leases, sub-leases and licences.
Threshold eligibility criterion not otherwise announced and may be set out in any Regulations. Queensland has announced it will implement the Code.
Eviction and rent increase bans: Not yet announced although expect Code will apply
Legislation provides the power to allow Regulations to implement these measures
Negotiation requirements for rent arrangements: Not yet announced although expect Code will apply
Additional relief: Announced: 25% land tax discount for the current year and a deferral of balance payments until March 2021 if the landlord has given rent relief to its tenant or has been unable to find a tenant due to COVID-19 impacts and complies with Qld COVID-19 leasing principles
No announced rent relief payments for commercial tenants
What's next?: Regulations to be made that will implement Code
South Australia
Current position: Legislation and measures in force
Eligibility: Legislation passed: applies to tenants facing financial hardship. Deemed to be facing financial hardship if tenant eligible for JobKeeper Payments. Reduction in turnover is also relevant.
Eviction and rent increase bans: Six-month ban on rent increases and evictions (rent and outgoings arrears, failure to trade and other prescribed defaults)
Negotiation requirements for rent arrangements: Parties can apply to Small Business Commissioner for mediation
Additional relief: No land tax reduction but payments may be deferred for up to 6 months. No announced rent relief payments
Tasmania
Current position: Legislation and measures in force
Eligibility: Applies to tenants with annual turnover of less than $50m and a 30% reduction in turnover due to COVID-19. Turnover calculations Feb 2019-Jan 2020
Eviction and rent increase bans: Ban during "emergency period" on rent increases evictions
Negotiation requirements for rent arrangements: Not at this stage
Additional relief: Land Tax will be waived for commercial property for the 2020-21 financial year, where the business owner can demonstrate operations have been affected by COVID-19
What's next?: To date legislation and associated Gazette notices only deal with termination/evictions and rent increases. Further aspects of the Code may be under consideration for future legislation
Victoria
Current position: Legislation in place which allows measures through regulation however no regulations have been made.
Eligibility: Eligible leases are retail leases, or non-retail commercial leases or licences, that are in effect on the day that any regulation comes into operation, and under which the tenant carries on a business or is a non-profit body, has a likely annual turnover less than $50million and is an employer who qualifies for and is a participant in the JobKeeper Scheme.
Eviction and rent increase bans: Announced: Six-month ban on rent increases and evictions (non-payment of rent).
Negotiation requirements for rent arrangements: Announced: If an agreement on rent waivers and deferrals cannot be reached it may be referred for mediation
Additional relief: Announced: 25% land tax discount for the current year and a deferral of the balance of land tax payments until March 2021 if the landlord has given rent relief to its tenant
No announced rent relief payments
What's next?: Regulations to be made that will implement the Code
Western Australia
Current position: Legislation in force
Eligibility: Small commercial leases, ie. retail shop leases, leases for small businesses, incorporated associations or other leases prescribed by Regulation
Eviction and rent increase bans: Six-month ban starting 30 March 2020 on rent increases and evictions (rent arrears, failure to trade and other prescribed defaults)
Negotiation requirements for rent arrangements: Parties can apply to State Administrative Tribunal to mediate dispute
Additional relief: No announced rental relief payments as at 24 April 2020
Commercial landlords will be able to apply to the Small Business Development Commission from 1 May 2020 where they can demonstrate they have waived a small business tenant’s rent and outgoings for a minimum of three months (and will not seek to recover those amounts). Grants equal to 25% of land tax bill are available to eligible landlords
What's next?: A tenancy code of conduct will be implemented separately. The code will require landlords and tenants to negotiate rent relief. Further legislation allowing early termination by tenants in severe financial distress is still before the WA Parliament as at 17 April 2020
Commercial landlords will be able to apply to the Small Business Development Commission from 1 May 2020 for land tax relief where they can demonstrate they have waived a small business tenant’s rent and outgoings for a minimum of three months
