Government to introduce mandatory commercial tenancy code of conduct

3 April 2020, Written by Matt Ogg

Government to introduce mandatory commercial tenancy code of conduct

Update (7 April): The mandatory commercial tenancies code has been formally announced by the PM. Click here for more

Prime Minister Scott Morrison has today announced a mandatory "give and take" tenancy code will be introduced to help struggling businesses get through the Covid-19 crisis.

Following a tentative draft code that was reached by industry bodies in retail, pharmacy and shopping centres, the National Cabinet has been working on an enforceable code that is close to being finalised. 

Companies wishing to apply for the code to come into force will need to meet the similar conditions as those applying for the JobKeeper package, with a prerequisite that they have experienced at least a 30 per cent drop in revenue. The tenant will also need an annual turnover of less than $50 million.

"If you're in that situation and you're a tenant, we'll be working on a mandatory code of practice to ensure the landlord and the tenant can get through this period, and on the other side be able to go back to business as usual," Morrison said.

"What is important as part of this code is that both parties negotiate in good faith," he said.

The PM says the idea is that the code be incorporated in the state and territory legislation. It should not be prescriptive but ought to follow the proportionality principle.

"The turnover reduction of the tenant needs to be reflected in the rental waiver of the landlord," he said.

"How that is done inside the lease is up to the landlord and the tenant. There are many different ways you can achieve this.

"If for example there was a three or a six-month rental waiver because a lessee or a tenant would have had to have closed their doors, and there's just no money coming in, one way to achieve that is to extend the overall lease by six months on the other side."

Another scenario could be that the parties agree to a different level of rent over the entire term of the lease.

"The banks will need to come to the party as well. The banks are not parties to those arrangements, and so that makes it legally a little more difficult.

"The banks are already moving to providing all sorts of new facilities and arrangements to their customers, and we would expect banks to be very supportive of the agreements reached by landlords and tenants who would be working under this mandatory code."

New measures for backpackers

The Prime Minister announced additional containment measures for backpackers on working holiday visas, whereby those wanting to work in a new area will need to undergo 14 days of self-isolation beforehand.

"There are particular places in the agricultural sector that rely on those workers each year as you go into the seasons either planting or for harvesting or for fruit picking and so on. And it's important that those businesses and those producers are able to continue to conduct their business," he said.

"Of course Australians who want to do that work, then please do get out there and do that work. And there'll be opportunities there for working holiday makers who are looking to engage in those occupations as they regularly do.

"They will be required to self-isolate and to go onto Australia.gov.au, and register for self isolation and do that where they are now for a period of 14 days before they transfer to another part of the country out in a rural or regional area."

He said this measure was being taken to ensure there is no lift-up of the virus moving from metropolitan to rural areas.

"This has been done to ensure that those producers can get the work done, but also to ensure that the communities are protected.

"At the same time working through the states and territories and local governments, we will be working to ensure that the workers' accommodation that will be in those places is also respecting strict health requirements.

"You can't have six backpackers in a caravan up out in rural parts of the country. That's not on. Not going to happen."

Update on results of social distancing measures

The Prime Minister started off his speech today highlighting how if it weren't for the actions taken to date and the virus were allowed to keep spreading at the rate of 12 days ago, we'd be looking at more than 10,500 cases in Australia compared to the current level of 5,315.

"In fact, some commentators who are doing the maths were suggesting that we would have had 8,000 cases just as recently as last weekend," he said.

"That is a tribute to the work that has been done by Australians in getting around and supporting the very sensible measures that have been put in place all around the country by the state and territory governments, but we must continue to do this.

"We need to continue to keep the pressure on. We need to continue to suppress the virus. We are now at single digit rates of growth, but we need to do more."

He said discussions are now focused on a six-month period, but that is no guarantee and the situation could be like this for longer.

"We pray it's shorter, but a six-month period should give people a good indication of what they have to ready themselves in terms of the changes they're making in their daily lives," he said.

"We are in what we described today as a National Cabinet as the suppression phase. We are now In a place where we're seeking to put the pressure down on constraining this virus in Australia.

"We then need to look at the recovery phase which is beyond, and I want to assure Australians that the National Cabinet is very focused on those issues as well."

Chief Medical Officer Brendan Murphy added the number of cases internationally is likely five to 10 times the one million-plus figure that is being reported.

"In Australia we're pretty confident that our testing has been the best in the world," he said.

"The growth rate has been falling, it's about five per cent per day at the moment."

In terms of community transmission, there have been 300 cases in Sydney, 60 in Melbourne and 30 in Brisbane. 

Starting this afternoon the government will be publishing a daily dashboard on Health.gov.au with all the key statistics and data, including a simple summary of key features from the Chief Medical Officer.

Murphy said the government's modelling for the virus' spread will be released next week.

Updated at 2:20pm AEDT on 3 March 2020.

 
Author: Matt Ogg

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