Protection for commercial tenants is now the Law

On 7 April 2020, the Federal Cabinet released a code of conduct (the Code) to govern Small to Medium Enterprise Commercial Leases during the COVID-19 pandemic. On 24 April 2020, the NSW Government passed the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (the Regulations), adopting the Code. The Regulations apply to retail, commercial and industrial leases entered into before 24 April 2020. The Regulations also apply to options to extend or renew existing leases, exercised after 24 April 2020. Lessor Restrictions The Regulations prohibit a lessor from taking action against an impacted lessee for the lessee’s failure to pay rent, outgoings, or not operating during lease-mandate

(Nearly) insolvent tenants and protecting commercial landlords

If you are the landlord of commercial property you may find yourself wondering what, if anything, you should be doing to protect yourself from your tenant suffering an insolvency event. What about the cash bond or bank guarantee, or your property left in the premises for use by the tenant? Are your interests legally secure? The Personal Properties Securities legislation (PPSA) (which became effective in 2012) requires landlords to take active steps to ‘perfect’ some of their interests under a lease (which may include registration on the public register called the Personal Properties Securities Register (PPSR)), otherwise those interests might ‘vest in’ the tenant upon the tenant’s insolvency

Best Lawyers In Australia 2020

Henry William Lawyers is delighted to announce that a number of our lawyers have been recognised by Best Lawyers for their expertise: Nick Noonan - Labour and Employment Law Alex Linden – Bet-the-Company Litigation, Litigation, Alternative Dispute Resolution and Insolvency and Reorganization Steve Godding – Superannuation. We are very proud of the achievements of Nick, Alex and Steve.

Residential Tenants set up to overcome COVID-19 Pandemic

On 15 April 2020, the NSW Government passed the Residential Tenancies Amendment (COVID19) Regulation 2020 (the Regulations). The Regulations aim to provide relief to residential tenants impacted by COVID-19 for the next six months. The Regulations affect tenants and landlords of leases governed by the Residential Tenancies Act 2010 (NSW) (the Act). Parties to residential leases should familiarise themselves with these changes. Importantly, the Regulations introduce a moratorium on landlords issuing a notice of termination to tenants affected by Covid-19, for non-payment of rent or charges. This moratorium applies only to an “impacted tenant”, defined in the Regulations as a member of a house

VA is Back in the Game: Commercial Leasing Code and the Colette Judgment

In the initial days of the COVID-19 pandemic, the voluntary administration (VA) process was riddled with additional complexities due to forced closures under Government orders. The personal liability of voluntary administrators for rents, which kicks in after 5 business days under s 443B of the Corporations Act 2001 (Cth), posed a particular problem. 2 developments have put the VA process back on the table in practical terms. The National Cabinet’s Mandatory Code of Conduct (Code) arguably removes a current impediment on a distressed company engaging in the voluntary administration process. The NSW Government has not yet legislated for the Code to apply though that is expected imminently. I

COVID-19 Business Relief Package

The Australian Banking Association (ABA) has recently expanded its ‘COVID-19 Business Relief Package’ (Relief Package), meaning that 98% of all businesses with a loan from an Australian bank are now eligible to access the Relief Package. Is your business eligible to access the Relief Package? Your business will be eligible to access the Relief Package if it: has been adversely impacted by COVID-19; owes less than $10 million in total debt to its credit providers; and is not in arrears in respect of its debt repayments as of 1 January 2020. Businesses that satisfy the above criteria will be entitled to access the Relief Package regardless of its size or number of employees. This means that th

Update: Code of Conduct Commercial Tenancies

Last week, the Federal Government released the Commercial Tenancies Code of Conduct (Code). The Code seeks to provide cash flow assistance to Small to Medium Enterprise leases during the Covid-19 pandemic, and is to be incorporated into each State and Territory’s legislation. Yesterday, the NSW Government confirmed its intention to implement the Code. The Government also announced a proposed $440 million tax break to support landlords and tenants. The relief is proposed to be provided by way of land tax concessions and is intended to be split 50/50 between the commercial and residential sectors. Landlords that are eligible will be able to apply for a land tax concession of up to 25 per ce

Code of Conduct for Commercial Tenancies

The Federal Cabinet has released a code of conduct (Code) to govern Small to Medium Enterprise (SME) Commercial Leases during the COVID-19 pandemic. The Code’s purpose is to impose good faith leasing principles to aid cashflows for SME tenants and landlords. The Code reflects that landlords and tenants have a common interest in working together, and should negotiate in an open, honest, and transparent manner. It is intended that the Code will be incorporated into each State and Territory’s legislation. We will need to examine the legislation passed by the NSW Government, to determine how faithfully the Code is incorporated. The Code is designed so that financial hardship as a result of the

Will the coronavirus breathe life into the defence of necessity?

The economic impact of the coronavirus already appears likely to exceed anything we have experienced in our working lives, yet the events of the global financial crisis of 2008 provide us with some guidance on how events are likely to unfold. There will be an initial phase in which governments, businesses and individuals take steps to absorb the blows to the economy and maintain some kind of equilibrium – this, perhaps, is where most of us are now. And then, after a time, corporations will begin to study the ruins of their balance sheets, and start to consider how all those gaps in revenue might be filled. The larger part of this task will, naturally, consist of re-establishing businesses

For Tenants: the Calvary has (Almost) Arrived

A short while ago, Prime Minister Scott Morrison said he hoped to have a mandatory code for commercial landlords and tenants in financial distress published next week. This should deliver the much anticipated and sorely needed financial relief commercial tenants have been waiting for. The mandatory code will apply to tenants where they have a turnover of less than $50million and are part of the JobKeepers program. “The turnover reduction of the tenant needs to be reflected in the rental waiver of the landlord,” said Mr Morrison. He said for businesses that had to shut their doors for three months, the tenants and landlords could agree to extend the lease for three months at the end of the

The importance of the stay on ipso facto clauses during COVID-19

COVID-19 has created a myriad of challenges for businesses in Australia, one of which is potential insolvency. Amendments to the Corporations Act in 2018 may provide relief in to companies entering into voluntary administration, receivership or a scheme of arrangement by preventing certain contracts from being terminated due to insolvency. There is a ‘stay’ on termination clauses being enforced, which may be extended due to circumstances arising from COVID-19. Read the full article here.

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