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.
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 cent on relevant properties.
In relation to the Code, the NSW Government confirmed their intention to adopt the following key measures:
Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code;
A ban on the termination of a lease for non-payment of rent; and
A freeze in rent increases.
In order to facilitate these changes, NSW Small Business Commission will be strengthened with extra staff and an injection of $10 million from the $1 billion Working for NSW Fund to increase mediation and advisory services to the commercial sector.
Other measures set out in out in our previous article are expected to be incorporated as well. It is likely the relevant NSW legislation will be debated in Parliament in the coming days.