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New WA code provides certainty for commercial tenants

The WA Government has introduced a new code of conduct to help commercial tenants and landlords reach agreements about rent during the COVID-19 coronavirus pandemic.

The code applies to small businesses, including retail stores, with an annual turnover of less than $50 million and which qualify for the JobKeeper scheme or have experienced a decline in turnover of 30 per cent or more during the emergency period (six months from March 30, 2020). Small charities only need to show a 15 per cent reduction in turnover. 

The code provides guidelines to assist commercial tenants and landlords to negotiate a rent relief agreement during COVID-19 to ensure businesses survive the economic downturn associated with the pandemic. It implements the key principles of a national code released by National Cabinet last month.

The code outlines a process for tenants to request rent relief and landlords are required to:

  • offer relief at least proportionate to the reduction in turnover that the business has suffered; and
  • provide at least half of that rent relief as a waiver, with the rest to be either deferred or waived.

The code was developed by Consumer Protection as part of the regulations of the Commercial Tenancies (COVID-19 Response) Act 2020.

The code will operate in conjunction with the Act, which provides protections such as a moratorium on evictions for small commercial tenants and prevents a landlord from increasing rent or charging interest on arrears during the emergency period.

For more information about the legislation, visit http://www.dmirs.wa.gov.au/covidcomten