Government to place six-month ban on commercial rental evictions

The government has put a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress, who are unable to meet their commitments due to the impact of coronavirus.

“There is a lot more work to be done here and my message to tenants, particularly commercial tenants and commercial landlords, is a very straightforward one. We need you to sit down, talk to each other, and work this out,” Prime Minister Scott Morrison said in a press conference.

“[It’s] about looking at the businesses which have been closed, [or] businesses that may have had a significant reduction in their revenues, and we need landlords and tenants to sit down and come up with arrangements that enable them to get through this crisis, so on the other side, the landlord has a tenant, which is a business that can pay rent… and we want the banks to help them achieve this outcome.”

The National Cabinet agreed to a common set of principles, endorsed by Treasurers, to underpin and govern intervention to aid commercial tenancies as follows:

  • a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus;
  • tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease;
  • the reduction or waiver of rental payment for a defined period for impacted tenants;
  • the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;
  • commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus;
  • landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements; and
  • cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government. and financial institutions to consider mechanisms to provide assistance.

“This is part of the hibernation approach where we want people – bespoke, customised to their own circumstances – to sit down and work these things out. There is no rulebook for this. We are in uncharted territory, but the goal should be shared.

“And that is a business that can reopen on the other side, not weighed down by excessive debts because of rental arrears. A landlord that has a tenant so they can continue into the future to be able to support the investments that they have made. And banks that have clients, both the landlords and the businesses. The three of them working together to ensure those businesses can get through and be there on the other side.”

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