The ACT Government has introduced the Leases (Commercial and Retail) COVID-19 Emergency Response Declaration 2021 (“The Declaration”) which came into effect on 2 September 2021.
We have highlighted the key points below.
The prescribed period will run from 12 August 2021 and does not have a fixed end date. The prescribed period will expire on the first day no COVID-19 emergency is in force, or, a later day notified by the Minister.
Eligibility – Impacted tenants that are offered the protection of the Declaration must demonstrate:
- that they are a lessee of a lease subject to the Leases (Commercial and Retail) Act 2001 in force before 12 August 2021; and
- decrease in turnover of 30% or more compared to the same month in 2019 or 2020 (this threshold is 15% for not-for-profit); and
- annual turnover of less than $50 million in the financial year ending 30 June 2021.
Landlords must provide rent relief to impacted tenants within the prescribed period in the same manner as outlined in the National Cabinet’s Code of Conduct being 50% rental waiver and 50% rent deferral and negotiate in good faith.
Landlords are prohibited from – taking a prescribed action against tenants (including issuing a termination notice, eviction of tenant or exercising a right of re-entry – see clause 10(2) for list of prescribed actions) to a tenant who fails to pay rent, outgoings or operate their business in the premises unless the landlord has engaged in good faith negotiations with the tenant.
Landlords must negotiate in good faith – which will require having regard to the financial hardship suffered by the tenant because of the economic impact of COVID-19 and express regard to the overarching principles set out in the National Cabinet’s Code of Conduct.
