- Covid-19 rent relief rules and regulations were introduced last year
- Lease agreements during the pandemic can be emotional - stay calm
- To resolves disputes, consider bringing in an 'unemotional' intermediary
A year ago, everything we considered as “normal” was about to change in Australia.
Over the Christmas and New Year’s break 2019/20, we enjoyed time with family and friends, perhaps hearing of a distant epidemic in Wuhan, China. For most of us, we considered this a “far from my bed” problem.
In the middle of March 2020, I celebrated my wife’s birthday with friends here in Australia, and we knew that going to a restaurant was about to become problematical.
Within a week, the national government implemented social distancing laws, pandemic rules and regulations. The new laws obliged businesses to close their doors or to change the way they operated.
An initial phase of panic throughout the entire country was the result. People rushed to supermarkets to get their necessary supplies, and business owners and managers agitatedly contacted their landlords or their representatives to discuss rent relief as the economy was about to take a turn for the worse.
After the initial confusion, the government introduced the National Mandatory Code of Conduct, a set of general guidelines for businesses and landlords to guide them through the steps on how to negotiate rent relief during this period. Soon after this code, state politicians introduced laws and regulations that adopted the code to their district, providing much-needed clarity.
One year on
We are one year into the Covid-19 pandemic in Australia, and we have seen several cases of disputes where the parties of lease agreements did not find resolutions between financially struggling landlords and businesses that require assistance during these challenging times.
Although the Commercial Tenancies (Covid19-Response) Act 2020 clearly states that specific actions are prohibited during the current emergency period, it also clarifies the steps you can take if the parties cannot agree on a deal that works best for all parties involved.
During the emergency period, a party to a lease can bring the dispute to the Small Business Corporation and a Tribunal’s attention. The Act articulates the steps, rules, and regulations that apply should the parties go down this track.
During these extended difficult, unprecedented, and unexpected times, negotiations can become heated arguments. It is always best practice to remain calm, open, cooperative, and, if possible, use an intermediary that does not have an emotional connection to the property or the business.
Plenty of individuals and businesses are affected by the pandemic. Working together and making compromises will bring the result that will get us all to the other side safely.
On a positive note, many tenants and owners have agreed to a type of rent relief package that worked well for all parties. Other tenancies have continued their business as usual and did not require assistance, and could continue to commit to their financial obligations under the lease. Whatever the situation may be, keeping an open and collaborative approach will lead to solutions. The Act allows for steps of resolution. However, the winners are those that agreed amicably to help each other.
Please refer to the Commercial Tenancies (Covid-19 Response) Act 2020 or contact the writer for further discussion around the possible avenues to explore if the parties need help.
“We are all in this together, but we are not all in the same boat.”
Each case and each tenancy is different, and parties should always obtain independent financial and legal advice based on their circumstances, financial situation, and lease agreement.
Disclaimer: This article contains general information and should at no time be considered financial or legal advice to the reader or to be offensive. The reader should always verify their situation with their financial and legal advisors before taken any further steps.