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Prime Minister Scott Morrison has announced new rental waivers and deferrals for commercial tenants hit by the impact of the coronavirus crisis.
Key points:
- Commercial landlords are legally required to engage with tenants who meet the criteria about rental arrangements
- They cannot terminate leases or draw on a tenant's security, while tenants must honour leases
- Mr Morrison said residential tenancies were a matter for the states and territories
Under the scheme, which was announced after a meeting of the National Cabinet on Tuesday, landlords will have to reduce leases in proportion to the reduction in the tenant's business.
The waivers will have to account for at least 50 per cent of the reduction in business.
Deferrals — rental payments that will need to be made, but can be put off — must be spread over the remaining time on a lease and for no less than 12 months.
That means that if a tenant had three months remaining on a lease, they would still have at least a year to make any deferred rent payment.
The code will apply to any tenancies where the landlord or tenant applies for JobKeeper and where they have a turnover of $50 million or less, Mr Morrison said.
The arrangements will be overseen by binding mediation and a mandatory code will be rolled out in each state and territory.
Mr Morrison said landlords were legally required to speak with tenants about rental arrangements and if they refused they would "forfeit their way out of the lease".
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"This preserves the lease, it preserves the relationship, it keeps the tenant in the property," the PM said.
"The code brings together a set of good-faith leasing principles.
"Landlords must not terminate the lease or draw on a tenant's security. Likewise, tenants must honour the lease."
For the larger commercial landlords, Mr Morrison is calling on banks to provide support.
Bill Henderson, the founder of Corporate House, Queensland's largest provider of serviced offices, is ropable about what he sees as the unfair nature of what has been announced.
"I listened to the Prime Minister. I listened to it three times. I couldn't honestly believe it the first time I heard it," he said.
"I tell you, many many landlords will, quite simply, go bust".
Mr Henderson is both a landlord and a tenant — renting some buildings and sub-letting the space.
"I think this policy is unique, among every [coronavirus] policy, it's absolutely unique," he said.
"Every policy to date has been to assist companies, organisations, enterprises, to get through this period of the pandemic, of the virus. Every single policy.
"This is the first policy where the Prime Minister has singled out a sector and said 'You will pay for someone else'."
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Uncertainty remains around residential tenancies
Mr Morrison said measures to help residents and their landlords with rent would be dealt with by state and territory governments.
Kate Colvin, spokeswoman for affordable housing lobby group Everybody's Homes, said it was disappointing renters had again been ignored by the National Cabinet.
"The reality is people are actually still being evicted," she said.
"People lost their jobs sometimes now weeks ago and have no income.
"They won't get extra JobSeeker allowance until right at the end of April and can't pay the rent.
"A lot of people have tried to negotiate with their landlords and the landlords has said, 'No, you have to pay the full rent'. And there's not a proper model in place to work out how that will be negotiated."
What the experts are saying about coronavirus:
While an 'eviction ban' has been mooted by the National Cabinet, it needs to be legislated by states and territories.
For now, the ban only relates to people who cannot pay their rent because theey have lost their income due to the coronavirus pandemic.
It does not stop landlords handing tenants a "no-grounds" eviction notice, Ms Colvin said.
"We need really clear provisions that require landlords to reduce the rent if people have lost income," she said.
"But we also need to see an end to evictions over this period.
"Because this winter is no time for people to be out in the cold. This is a time for people to be safe at home. They need their home to be safe in".
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Topics: covid-19, diseases-and-disorders, health, government-and-politics, australia
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