WA COMMERCIAL TENANCIES CODE RELEASED
A long awaited Commercial Tenancies Code of Conduct for Western Australia has been finalised and released by the State Government Friday 29th May. The regulations complement the Commercial Tenancies (COVID-19 Response) Act 2020 and will apply until 29 September 2020, unless otherwise extended.
The following summary highlights some key inclusions in the Code.

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Eligibility
To receive rent relief under the Code, tenants must:
• Operate under a small commercial lease; and
• Have a turnover of less than $50 million for the 2018-19 Financial Year; and
• Be eligible for the JobKeeper program, or
• Can prove a 30% reduction in turnover due to the pandemic
There are also specific rules and exemptions for tenants depending on their corporate structure.

Requests for information
• Tenants must seek rental relief in writing and state they meet the eligibility requirements
• Landlords can request “sufficient and accurate information” to verify tenant’s eligibility and reduction in turnover
• Examples listed in the Code includes information held in accounting software
• Requests for information must be reasonable

Minimum rent relief
• Landlords must provide rent relief that is proportionate to a tenant’s reduction in turnover
• At least 50% of rent relief must be provided in the form of a rental waiver, unless otherwise agreed
• There are scenarios where landlords may have to consider a greater than 50% rental waiver
• Landlords have 14 days from a written request for rent relief to make a rent relief offer to a tenant
• Tenants can request to re-negotiate rental relief if existing arrangements are less favourable than those available under the Code

Outgoings
• Where tenants are unable to trade due to the pandemic, landlords must consider waiving outgoings for the period of time the tenant was unable to trade
• Landlords must not charge tenants outgoings above their proportionate contribution to a tenant’s outgoings
• If landlords have already charged tenants outgoings that exceed their proportionate contribution, tenants must be reimbursed

Prohibited actions
• The Code was created after State Parliament passed the Commercial Tenancies (COVID-19 Repsonse) Act 2020
• The Act prevents landlords from taking a number of actions against tenants where non-payment of rent or financial hardship caused by the pandemic are involved
• This includes no evictions and no increases to rent
National Cabinet’s principles around good faith negotiations are also included in the Code.

Should you have any queries or feedback, please reach out to your MLV Asset Manager.
 

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