Eviction moratorium and code of conduct to protect WA businesses
New laws introduced by the McGowan Government to establish a six-month moratorium on evictions for certain commercial tenancies in Western Australia and establish a mandatory code of conduct to assist with negotiations between landlords and tenants have now passed the WA Parliament.
The aim of the legislation is to help small commercial tenants that are now in financial distress to survive the current economic downturn due to restrictions imposed to combat the COVID-19 pandemic.
Apart from the eviction moratorium which is backdated to March 30, 2020, other elements of the legislation include:
- A freeze on rent increases;
- Restriction on penalties for tenants who do not trade or reduce their trading hours;
- No interest to be charged on rent arrears;
- The introduction of an enhanced dispute resolution process; and
- A prohibition on landlords progressing proceedings that occurred after the restrictions were imposed but before these laws come into operation.
A code of conduct will also be developed based on the National Cabinet Code of Conduct to provide a framework for negotiations to be carried out in good faith between landlords and tenants to agree on rent relief measures.
The impact the COVID-19 restrictions have had on the business with regard to revenue, expenses and profitability will be taken into consideration when determining and implementing appropriate deferrals, reductions or waivers of rent as well as sharing costs.
The laws that will come into effect this week allow for the emergency moratorium period to be varied by regulation if required.
Comments attributed to Premier Mark McGowan:
"It is crucial for the WA economy that small businesses are able to survive this period of restrictions and it's hoped these measures will support efforts in preventing business failures and get people back to work when it's over.
"We urge all commercial landlords and tenants to enter into negotiations with a sense of shared destiny and to understand each other's difficulties at this time.
"Business closures will benefit no-one, so mutually acceptable arrangements are urgently required to help save these businesses so they can bounce back quickly."
Comments attributed to Commerce Minister John Quigley:
"The new laws formalise decisions made by the National Cabinet to provide some relief for businesses impacted by the COVID-19 restrictions and ensure that mutual agreements are being reached to protect the survival of the business during this challenging period.
"Mechanisms will be put in place for commercial tenants who can't reach an agreement with their landlord to go to the Small Business Commissioner for mediation or conciliation. Parties can also take the dispute to the State Administrative Tribunal for resolution.
"The hope is that businesses will be able to resume normal trading after a reasonable recovery period with temporary arrangements in place that are appropriate for individual circumstances."
Premier's office - 6552 5000
Commerce Minister's office - 6552 6800