FOXLAW on QLD Property Law

QLD: Commercial Tenancies and the National Mandatory Code of Conduct

Yesterday, the Prime Minister announced that a Mandatory Code of Conduct has been agreed on which will impose good faith leasing principles. The Code applies to commercial tenancies (both retail and non-retail tenancies). 

It applies only to SME tenants (those with turnover under $50M), who are eligible for the JobKeeper program.

This Code will be legislated and regulated in Queensland. It is intended to continue while the JobKeeper program remains operational.

Landlords will not be able to terminate leases for non-payment of rent during the pandemic period. Landlords must not draw on a tenant’s security for the non-payment of rent (e.g. cash bond, bank guarantee or personal guarantee).

Regarding rent (including waivers or deferrals), the aim of the Code is to ‘share’ the financial risk and cashflow impact, between landlords and tenants.

The Code contains a number of ‘Overarching Principles’, ‘Leasing Principles’ and a ‘Binding Mediation’ mechanism. A full copy of the code is available here: https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf 

The intention is for landlords (and tenants) to agree to tailored, bespoke (customised) and appropriate temporary arrangements for each SME tenant, taking into account their particular circumstances, on a case by case basis. 

This is where solicitors will be able to bring the most value (working collaboratively with other professionals where appropriate – e.g. accountants, managing agents, financial planners, insolvency practitioners, etc).

#negotiatewithempathy

Cheers,
Josh Fox
Foxlaw