Publication

COVID-19: QLD Leases Regulation

by Chris Drayton and Kristina Jukic
29 May 2020
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Further to our update circulated on 28 May 2020, the QLD Government that same day after we had finalised the update published its Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Regulation).  Click here to access the Regulation.

We summarise some key points below for your convenience:

  • Purpose – mitigate effects of the COVID-19 emergency on lessors and lessees under affected leases by giving effect to the National Code good faith leasing principles and establishing a process for resolving disputes.
     
  • What is an “affected lease”? – retail shop leases and leases under which the premises are to be wholly or predominantly used for carrying on a business and the lessee under which is an SME entity (an entity with annual turnover of less than $50m) and is eligible for the jobkeeper scheme.
     
  • What is the “response period” – the period commencing 29 March 2020 and ending 30 September 2020.
     
  • A lessor is prohibited from taking a “prescribed action” (for example terminating a lease, re-entering premises or claiming on security) on the grounds of a lessee under an affected lease failing to pay rent or outgoings or to open for business during the response period.
     
  • A lessor must not increase the rent payable by a lessee under an affected lease during the response period.
     
  • A party to an affected lease may request the other party to negotiate the rent payable and other stated conditions of the lease.  Within 30 days after sufficient information has been provided for the purpose of the negotiation, a lessor must offer the lessee a reduction in the amount of rent payable under the lease and any proposed changes to other stated conditions. No less than 50% of a rent reduction must be in the form of a waiver of rent.
     
  • The Regulation also details dispute resolution procedures.

There are some provisions adding detail around the above key points and some exceptions and these should also be considered in each instance so the applicability of the Regulation or how it is to apply can be considered.

Please do not hesitate to contact us if we can be of any assistance.