Land Act Rent Waivers, Rates Decisions and Leasing Code
Legislation is coming through thick and fast from the Queensland Government, foreshadowed by the COVID-19 Emergency Response Act 2020 (Act), which has recently come into effect.
The Act has paved the way for the creation of Regulations under other affected legislation to bring the purposes of the Act into effect. The Act seeks to facilitate the continuance of small business, establish an office of small business commissioner and provide for matters relating to leasing.
QLD Government shares the pain but local government misses out
The Land (COVID-19 Emergency Response – Waiver and Deferral of Rents and Instalments) Regulation 2020 (Regulation) has come into effect and provides for the waiver and deferral of rent for certain leases under the Land Act 1994. Unfortunately, local government lessees are not eligible for relief.
Eligible leases include leases for primary production, sport or recreational clubs and communications, such as TV or radio. The Minister may publish notices waiving or deferring the payment of rent. If rent has already been paid but then a waiver is announced the tenant may be eligible for a refund. Overdue rent will not be waived or deferred. The Regulation expires on 30 June 2022.
Who needs a budget meeting? Rates Regulation incoming..
The Justice and Other Legislation (COVID-19 Emergency Response) Amendment Act 2020 (Act) was assented to on 25 May 2020.
It provides the power for a Regulation to be made which may provide for a local government to decide, by resolution other than at the budget meeting, what rates and charges are to be levied for the financial year ending 30 June 2021.
The Explanatory Notes to the Act reveal that the measure has been deemed important to support financial sustainability of local governments. The Notes also highlight that the power could result in property owners having their rates increased without equivalent increases in services.
There is no Regulation as yet. Stay tuned for further updates.
National Code now QLD reality
The Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 has been released.
It seeks to legislate Mandatory Code of Conduct and Commercial Leasing Principles (Code) set out by the National Cabinet some time ago. The Regulation itself provides that its purposes are to mitigate the effects of the COVID-19 emergency on lessors and lessees under affected leases by giving effect to the good faith leasing principles set out in the National Code and to establish a process for resolving small business tenancy disputes and lease disputes.
The Regulation provides eligibility criteria that differ slightly from the way they are expressed in the Code. However, the Regulation does provide that lessees must be eligible for the JobKeeper scheme before the Regulation will apply.
Under the Regulation, lessors must:
- Act in good faith in discussions, co-operate and act reasonably in all discussions and actions associated with mitigating the effect of the COVID-19 emergency on the parties to the lease;
- Not take prescribed actions i.e. terminating the lease or drawing on security bonds in certain circumstances;
- Not increase rent, unless rent is calculated on the basis of turnover;
- Renegotiate rent if requested and offer reductions in line with the terms of the Regulation.
Relief under the Regulation is to apply from 29 March 2020 to 30 September 2020.
If your local government needs further advice about navigating these new obligations contact our Team today.