COVID-19 LEASE ADVICE
Victoria: News Alert
Ban on rent increases and evictions extended
“Evictions will continue to be banned for residential and commercial tenants until December 31, unless in rare and specific circumstances,” Victorian Treasurer Tim Pallasa August 21, 2020
Get the Rent Relief You Deserve
If you lease or rent a shop, restaurant, office, manufacturing or industrial premises or warehouse, or other commercial premises and you have suffered a reduction in turnover since March this year, Leasepro can get you the Rent Relief you deserve. Rent relief is typically at least 30% but there is no limit and we will consider all of the circumstances relating to your lease or occupancy agreement.
Plus for eligible leases and occupancy agreements, once a valid application has been made you can not be evicted or have your lease terminated during the current Covid-19 period because of failure to pay rent.
For tenants and lessees, Leasepro Legal will review your lease, provide you a fixed list of questions, review your answers and provide a preliminary letter of advice as to the availability of any entitlement to rent relief taking into account the various considerations outlined above. If applicable, Leasepro will prepare and submit an application / request for Rent Relief on your behalf taking into account the mandatory requirements under applicable legislation and the material circumstances relating to the lease / occupancy agreement and your circumstances.Before you incur any cost, Leasepro will provide you with written information regarding our fixed fees and obtain your approval.
Call or contact us. Its free to find out how we can help.
And when your ready we can get working for you straight away.
Want to Get Out of Your Lease Early
Unfortunately many restaurants, cafés, bars, hospitality & entertainment venues, hotels, motels, shops and tourism venues are no longer viable to operate as a result of Covid-19 and its effect on society and Australia’s economy.
To make matters worse many business owners & operators have many months or even years still to run under very expensive leases or occupancy agreements. Often too, personal guarantees, security deposits or bank guarantees have been provided to Lessors.
Leasepro can review your commercial, industrial, office lease or occupancy agreement and related documents and circumstances and provide an expert opinion whether you can terminate or cancel the lease or agreement early and if so, tell you how to do it.
For tenants and lessees, Leasepro Legal will review your lease or occupancy agreement, provide you a fixed list of questions, review your answers and provide a preliminary letter of advice as to the availability of any right to terminate or cancel the lease or occupancy agreement. If applicable, Leasepro will prepare and send a notice of termination or cancellation of the lease or occupancy agreement. Before you incur any cost, Leasepro will provide you with written information regarding our fixed fees and obtain your approval.
Call or contact us. It’s free to find out how we can help.
And when you’re ready we can get working for you straight away even during the current disruption.
Impact of Covid-19 on Commercial Leases
A large proportion of commercial tenants have suffered a dramatic decline in custom and revenue as a result of government restrictions on store openings, unilateral closures of stores and offices and the downturn of custom resulting from lockdowns.
Tenants are frequently requesting suspensions or reductions of rental payments or simply failing or refusing to pay rent. Arguments being raised for tenants to support rent relief where the relief under Covid-19 Legislation does not apply, for instance for tenants who are not eligible for the JobKeeper scheme, include: force majeure (disruption caused by a wide-scale event out of the control of the parties), frustration of contract (the failure of the underlying purpose of a contract), rent abatement, lessor representations regarding visitor traffic and of course commercial considerations. Tenants and their agents and even advisors should be mindful that force majeure, and rent abatement arguments would be dependent on express clauses in the lease and that such provisions are not the norm and even where present are often too narrow to support rent relief in the current turmoil. Frustration of contract is a principle of law that does not depend on a contractual term for support however frustration is a high threshold particularly in the case of leases that ordinarily entails a substantial failure of the underlying object of a contract not a mere interruption. Representations by Lessors for example regarding visitor traffic in shopping centres have in practice been rare for many years and would typically require fairly cogent evidence.
The force of these arguments would therefor variously depend on the precise lease terms (which typically are not encouraging for force majeure or rent abatement arguments), the expired & un-expired term of the lease, the permitted and actual use of the premises, the degree and precise cause of the downturn in tenant’s trade and revenue, legislation, case-law and commercial considerations such as the desirability of supporting a ‘good’ tenant to ride through a temporary storm at a time when most likely there isn’t a better option. The perceived reliability of a tenant and the absence of any conflict or difficulties in the past will of course be material in this regard.
Practical considerations also are of significance including that Covid-19 has at once somewhat reduced the capacity of the courts and tribunals to hear disputes and likely imbued a greater degree of sympathy towards those whose livelihoods are being undermined through no fault of their own. In any event, dialogue between landlords and tenants in search of a deal to enable tenants to get through the current turmoil, perhaps with some measure of upside for the lessor later, is preferable to an escalating legal dispute however lessors with loss-of-rent insurance should be mindful that rent relief concessions granted in favour of tenants are likely to be rejected as insured or recoverable loss in a similar vein that lessors have considered tenants who suspended trading when not ordered to do so were acting voluntarily.
We consider that many of the discussions between tenants and lessors outside the strictures of the State legislation providing rent relief during the Covid-19 period of 29 March to 29 September have been lacking in rigour. Legal terms like abatement were being brandished almost reflexively and lessors’ do not seem to be seeking the precise information and documents from tenants that would truly inform a fair and balanced outcome to the current upheaval which is indiscriminately affecting lessors, tenants and the broader community.
For leases and licence agreements to which the State Legislation providing for rent relief applies, the entitlement to rent relief is clear-cut in most cases although the level and form of the discount is subject to negotiation based on all of the circumstances relating to the subject lease or licence agreement.
Consistent with the prior National Cabinet Mandatory code of conduct , Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period).
In most States and territories, for tenants with annual turnover reduced by at least a 30% and below $50 million dollars, in receipt of a JobKeeper wage subsidy and who have made a proper request for rent relief, landlords are required to provide rent relief in the form of rent deferral and rent waiver/abatement. Such rent relief must take into account the tenant’s reduction in turnover associated with the leased premises and the other circumstances relating to the Lease including both the lessor’s and tenant’s circumstances. The proportion of the rent relief that is required to be in the form of a waiver (rather than a deferral) varies among the State legislation. The parties are required to exercise good faith. Whilst parties are not obliged to provide actual financials these can lend weight to a party’s position in regard to rent relief.
Contact us now for assistance or further information.
We are working through the current situation affecting our community.
Covid-19 Regulations currently in force regarding commercial leases include:
Covid-19 Regulations currently in force regarding residential leases include: