Commercial Leasing information during COVID-19
Article By: Sarah Cappello, Lawyer Cappello Rowe Lawyers Sydney
COMMERCIAL LEASING – The PM has announced a potential six-month moratorium on evictions, in a bid to help small businesses survive the economic impact of the Covid-19 pandemic.
The PM said late on Sunday that a series of principles had been agreed at Sunday’s national cabinet meeting to underpin and govern intervention to aid commercial tenancies.
“The most significant of those is that states and territories will be moving to put a moratorium on evictions of persons as a result of financial distress if they are unable to meet their commitments,” the PM said.
According to a press release posted to the PM’s website, other principles being consider include the reduction or waiver of rental payment for a defined period for impacted tenants and the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress.
Mr Morrison confirmed that work is currently being done by federal Treasurer Josh Frydenberg and his state and territory counterparts on commercial tenancies, with details to be announced shortly.
But he underlined the need for landlords to work with their tenants and banks on solutions now.
On Monday morning, the Australian Banking Association (ABA) announced that banks are teaming up to block landlords from evicting businesses by offering six-month loan repayment deferrals to an additional 30,000 businesses across the country.
Australia’s banks have agreed to expand their support to an extra 30,000 businesses by raising the threshold of those who qualify for a six-month deferral of loan repayments from the initial $3 million announced by the Australian Banking Association in March to up to $10 million in total loan facilities.
While the new measures apply to all sectors of the economy, on an opt-in basis, the ABA confirmed that commercial property landlords will be asked to provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears due to the pandemic.
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