Please note: the code of conduct for commercial tenancies was released by the WA Government on 29 May 2020. Read our recap of the new commercial tenancy legislative changes and code of conduct.
As Small Business Commissioner, I want to assure WA small business tenants experiencing financial hardship as a result of the coronavirus emergency that they are protected from eviction and being charged interest on unpaid rent. However, I would also urge those tenants who are continuing to trade to pay an appropriate proportion of their rent.
We have received a number of calls from concerned tenants and some landlords who are confused about their position in relation to paying or demanding rent.
Legislation enacted last week clearly defines a list of prohibited actions that landlords cannot take against tenants during the emergency period. This includes a moratorium on evictions, rent increases, charging interest on unpaid rent and trying to recover part of any security bond. However, it does not mean that tenants should stop paying their rent if they are capable of doing so.
I am calling for both sides to work together and not to seek opportunities to exploit the current circumstances.
In situations where tenants are experiencing a reduction in turnover, the Premier has called on commercial landlords and their managing agents to show compassion and to negotiate a fair and workable arrangement.
While the WA Commercial Tenancy (COVID-19 Response) Act 2020 has passed State Parliament, the associated regulations which will be based on the National Code of Conduct for SME Commercial Leasing (and include greater detail about rent relief) will take some weeks to complete. In the absence of these new regulations, a degree of uncertainty is likely to continue.
Tenants may have also heard about the land tax assistance program. Landlords can apply for this, if they have given tenants the equivalent of a three months waiver on their rent. The decision as to whether to apply is for the landlord to make. This application process will include landlords asking tenants for evidence of a decline in their turnover. While this is a reasonable request, it is not reasonable to ask for financial statements which are costly and onerous to produce.
Tenants are reminded that, even if they receive a breach or termination notice from the landlord or agent, there is still a process to be followed ahead of any possible eviction or other action. If tenants are unsure about what to do they should contact us for advice on their options.
I appreciate that there is a lot of concern in the small business community, however in the meantime I would urge people to remain calm – you are protected from eviction – and to continue to communication with your landlord.
Further details on this matter will be provided as soon as they become available.
Summary of commercial tenancy support for the COVID-19 pandemic
To understand what the new commercial tenancy support packages could mean for you, download our Commercial tenancy support: COVID-19 pandemic fact sheet. This is an easy to understand summary of each program, what it means for tenants and landlords, key application dates and useful links to more information.