COVID-19: What to do as a landlord or tenant in the current environment

Landlord or tenant in the current environment

Following on from our Facebook live last night [on 23 March 2020], Adriana explains what Landlords and Tenants should try and do in the current crisis with leases, amidst the COVID-19 Coronavirus pandemic.


KEY TAKE OUTS:

  • Landlords and Tenants what they should do in the current crisis under their lease
  • That Federal government is currently reviewing this situation if we go into lockdown

Following on from our Facebook live last night [on 23 March 2020] I thought I would reiterate some items the federal government are looking into being a review on a number of measures in order to protect tenants.  We would also hope in turn if pursued that they would also look at some sort of relief for landlords who own premises where they have purchased and are mortgaged or have financial obligations attached to their property to ensure they do not lose their property as well.

The ABC’s website says this:

The Prime Minister says the cabinet is working to “ensure there is a ban, under rental agreements” that people could be thrown out of their tenancies if they can’t pay rent during the coronavirus crisis.

He says the same would apply to commercial tenancies. 

Mortgage relief is also on the agenda.

“Equally, we’ve been working with the banks to ensure that people can get mortgage relief in those circumstances to reduce as many of their fixed costs,” Mr Morrison says. 

“There will be waivers that will be on things like electricity and things like that from utilities, so working on getting the price costs down and increasing the amount of support and payments there.”

The discussions and options being thrown are to increase the minimum amount of a statutory demand for non-payment of debt from $2,000 to $20,000 and to allow six months for a person to make payment which is a massive increase from [currently] 21 days or another option being a moratorium [stop period] placed on termination of leases for non-payment of rent.  We will keep you updated as this is  or when announced.

In the meantime, landlords and tenants should review their leases and look into any clauses under their lease that may give them some sort of relief being:  abatement of rent clauses; force majeure clauses.  There is also the law of frustration of leases but this is argued that whether a lease can be frustrated at common law if the tenant is unable to trade on account of mandatory closures.  This has been argued by a number of lawyers in previous cases but in essence has not been successful in Australia however not currently pursued to, nor tested by the High Court.  However, I believe now will be the time it will be revisited.


ABOUT ADRIANA CARE:

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Adriana is the Managing Partner for Coutts Lawyers & Conveyancers. She acts for large commercial financial institutions in relation to corporate governance, and the provision of retail and wholesale credit and funding facilities for both the commercial and consumer market.

She also acts for a range of ADIs, finance companies, vendor introduces and equipment lessors. She acts for a number of franchisor and franchisees, as well as small property developers, builders and commercial property leases and debt recovery. Adriana has also worked in the fields of insolvency, commercial disputes and litigation and occupational.


For further information please don’t hesitate to contact: We have a team of lawyers who can assist you in CampbelltownSydneyNarellanCamdenTahmoorHunter ValleyWollongong & Parramatta locations in Australia.

Adriana Care
Managing Partner
adriana@couttslegal.com.au
1300 268 887

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This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.