The Queensland Government has now extended arrangements for eligible small businesses who need ongoing rent relief in accordance with the Retail Shop Leases and Other Commercial Leases [Covid-19 Emergency Response] Regulation.

In accordance with the Regulation, a Landlord cannot take a prescribed action against a tenant with an affected lease for failing to pay rent or outgoings, or not being open for trade during either the response period [29 March 2020 to 30 September 2020] or the extension period [1 October to 31 December 2020].

So, what has changed since the Regulation came into effect on 29 March 2020?

  • A rent reduction for the extension period can still be a combination of a waiver or deferral, however, the combination required to be offered by the Landlord no longer has to be a minimum of 50% waiver. Rent reductions can still be any combination of waiver and/or deferral of rent. For example, if a business has experienced a 30% downturn then they can seek to negotiate a 30% rent reduction, with 15% being waived and 15% being deferred. However, it is not mandated that the Landlord must accept this combination and in return, the landlord is permitted to only offer a deferral.
  • Some dates have shifted from 1 October 2020 to 1 January 2021 such as:
    • Taking a prescribed action by the Landlord (such as evicting a tenant, termination of a lease or a claim on a bank guarantee or security deposit); and
    • Repayment of any deferred rent agreed to during the extension period.
  • Rent deferred during the response period is still to be repaid from 1 October 2020, unless agreed otherwise.

Small businesses who wish to take advantage of these extended arrangements still need to remain eligible under the new regulations, so for example they must:

  • have an existing commercial lease
  • be operating this financial year
  • have a turnover of less than $50 million for the 2018-2019 financial year or are expecting a turnover of less than $50 million for the 2019-2020 financial year; and
  • be eligible for the JobKeeper payment scheme.

Small businesses and Landlords in the first instance should try and negotiate these leasing arrangements between themselves, and if unable to reach agreement, the Queensland Small Business Commissioner is offering a free mediation service to help tenants and Landlord navigate their way through these unprecedented times.

Where to from here?

Make sure you are across the upcoming changes and if you need any assistance, have any questions that need answering, or would like to discuss your situation any further, please reach out to our businessDEPOT legal team here.

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