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Commercial tenancies - Changes to commercial tenancies during COVID-19

IMPORTANT UPDATE: Landlords and tenants with protected commercial leases during COVID-19 (coronavirus) emergency period

On 4 September 2020, the Tasmanian Government announced that the financial hardship period will continue until 1 December 2020.

On 13 May 2020, the COVID-19 Disease Emergency (Commercial Leases) Act 2020 received Royal Assent. The Act gives effect to the Code of Conduct for commercial tenancies (the Code) agreed upon by National Cabinet on 7 April 2020.

Who does the Act apply to?

The Act applies to parties to commercial leases, where the tenant is eligible for the JobKeeper program and has a turnover of less than $50 million per annum.  The tenant does not need to have applied for JobKeeper but their circumstances must mean they are eligible.

A lease the Act applies to is known as a protected lease.

What does the Act mean for commercial tenants and landlords?

The Act is designed to:

  • govern the conduct of commercial tenants and landlords, and
  • provide additional protections and rent reductions for tenants experiencing financial hardship due to COVID-19.

It also provides:

  • a halt on evictions, taking possession or terminating a commercial lease due to non-payment of rent
  • a freeze on rent increases
  • a requirement that parties negotiate rent waivers or deferrals based on the commercial tenant’s reduced income due to COVID-19
  • facilitated mediation services for commercial tenants and landlords accessed through Consumer Building and Occupational Services if parties cannot reach agreement.

What period does the Act apply?

The changes are in effect for the financial hardship period which is currently from 1 April 2020 until 1 December 2020.

This period can be extended. The Act provides for a financial hardship period for up to 12 months.

Commercial Code Administration Committee

The Tasmanian government has established a Commercial Code Administration Committee to be chaired by the Director of Consumer Affairs and Fair Trading. The role of the Committee is to promote awareness of the Code of Conduct, monitor its operation and encourage commercial tenants and landlords to use it. Read the Premier's media release.

Where to next?

Tenants Landlords

Updated: 07 Sep 2020