Commercial tenancies - COVID-19 response
COVID-19 commercial tenancy laws extended
The State Government has decided to extend the emergency period under the Commercial Tenancies (COVID-19 Response) Act 2020 (WA) until 28 March 2021. This means that the existing laws, including the moratorium on evictions, freeze on rent increases and code of conduct will apply until this date. In line with the Commonwealth Government’s modified JobKeeper program, the protections will be targeted to apply only to those tenants who experience financial hardship as a consequence of the coronavirus COVID-19 pandemic.
See the Commerce Minister's announcement: WA to extend COVID-19 commercial tenancy laws
Terms we use on this page
Commercial Tenancies (COVID-19) legislation = Commercial Tenancies (COVID-19 Response) Act 2020 WA and Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA).
Emergency period (for the purpose of the Commercial Tenancies COVID-19 legislation) is now 30 March 2020 to 28 March 2021. However the government may change the end date to be earlier or later, depending on the status of the COVID-19 pandemic.
Commercial tenancy code of conduct to assist during COVID-19
The WA Government has introduced a code of conduct to help commercial tenants and landlords reach agreements about rent during the COVID-19 coronavirus pandemic.
Read more in the Commerce Minister's announcement or see the code on the Western Australian legislation website: Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA).
How do I know if Commercial Tenancies (COVID-19) legislation applies to me?
The Commercial Tenancies (COVID-19) legislation is made up of two parts:
- the Commercial Tenancies (COVID-19 Response) Act 2020 (WA); and
- the Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA), which contains the WA Mandatory Code of Conduct (WA Code).
The Commercial Tenancies (COVID-19 Response) Act 2020 applies to small commercial leases during the emergency period. From 30 September 2020, some changes will be made to how the legislation applies.
A small commercial lease is a:
- retail shop lease as defined in the Commercial Tenancy (Retail Shops) Agreements Act 1985 (CTA Act); or
- a lease where the tenant is a small business as defined in the Small Business Development Corporation Act 1983 (SBDC Act);
- lease where the tenant is an incorporated association as defined in the Associations Incorporation Act 2015 (AI Act); or
- another type of lease prescribed by regulation.
Some parts of the legislation, such as the WA Code, only apply to an "eligible tenant". These are small businesses, including retail stores:
- with an annual turnover of less than $50 million; and
- which qualify for the JobKeeper scheme or have experienced a decline in turnover of 30 per cent or more. Charities only need to show a 15 per cent reduction in turnover.
What protections does the legislation contain?
- six-month moratorium on evictions due to non-payment of rent;
- freeze on rent increases;
- restriction on penalties for tenants who do not trade or reduce their trading hours;
- prohibition on landlords making a claim on any form of security (e.g. a bank guarantee or security deposit) for the performance of the tenant’s obligations under the lease; and
- prohibition on landlords progressing action against a tenant for a breach that occurred after 30 March 2020, but before the start of the new laws.
What does WA’s Code require?
- offer relief at least proportionate to the reduction in turnover that the business has suffered; and
- provide at least half of that rent relief as a waiver, with the rest to be either deferred or waived.
What happens to the WA Code after 29 September 2020?
The WA Code will continue to apply after 29 September 2020.
However, from 30 September 2020, if a tenant’s business improves so that they are no longer eligible for JobKeeper or cannot meet the decline-in-turnover tests for JobKeeper (because their loss in turnover is less than 30 per cent), then the WA code will no longer apply to that tenant.
This page will be updated with more information on the processes for renegotiation of rent relief after 29 September 2020 as soon as it becomes available.
What is the National Code and how does it relate to the WA Code?
On 7 April 2020, the National Cabinet released the Mandatory Code of Conduct – Small to Medium Enterprises (SME) Commercial Leasing Principles during COVID-19, and announced States and Territories would implement the Code via legislation or regulation.
For more information see the National Cabinet Mandatory Code of Conduct.
The WA Code applies to small commercial leases and is based on the national code principles outlined in this video:
The WA Government made modifications to the National Code to ensure it is suitable for Western Australia.
The WA Code is available on the Western Australian Legislation website.
I’m a commercial tenant, how do I use the WA Code to negotiate with my landlord?
What should tenants do after 29 September 2020?
If you have a small commercial lease and you continue to be an eligible tenant (annual turnover of less than $50 million and qualify for the JobKeeper scheme or have had a decline in turnover of 30 per cent or more) the Commercial Tenancies (COVID-19) legislation, including the WA Code, will apply to you.
An eligible tenant can ask their landlord to continue existing rent relief arrangements or renegotiate rent relief for the period after 29 September 2020. Tenants should provide landlords with details of loss of turnover on an ongoing basis, e.g. month by month. Rent relief should be proportionate to a tenant’s reduction in turnover and should be adjusted as turnover changes.
What if we can’t reach an agreement under the WA Code?
If an agreement cannot be reached under the WA Code, the Small Business Commissioner can mediate or conciliate.
Disputes can be taken to the State Administrative Tribunal if they cannot be resolved through conciliation.
I am having difficulties negotiating with my landlord/tenant, what can I do?
The legislation includes processes for resolution of disputes arising out of, or in relation to, the operation of the Act or WA Code, including provisions to protect landlords where tenants are refusing to pay rent despite the capacity to do so.
If you are experiencing difficulties negotiating with your landlord or tenant please contact the Small Business Development Corporation for advice and assistance.
For further advice and assistance
Visit the Small Business Development Corporation's pages: Dealing with coronavirus, New commercial tenancy legislative changes and Small business tenants and landlords to work together.
What financial assistance is available?
- Australian Government small business stimulus/relief package: visit the Small Business Development Corporation website for details.
- WA Government land tax assistance program: In response to issues faced by the landlords of commercial properties whose small business tenants have been impacted by the COVID-19 coronavirus pandemic, the WA Government announced a $100 million land tax assistance program. Applications opened on 1 May 2020 and commercial landlords are invited to view the eligibility criteria and register for more information about the program via the Small Business Development Corporation. The land tax assistance program has been extended to the end of March 2021.
- WA Government - WA small businesses to receive $17,500 grant to assist during COVID-19 (16 July)
- ACCC - Insurers to be authorised to continue relief measures for small businesses (10 June)
- WA Government - Procurement changes to help boost local businesses during COVID-19 (27 May)
- WA Government - Supporting WA businesses re-opening through COVID-19 (15 May)
- WA Government - McGowan Government exercises new powers to help ratepayers (8 May)
- ACCC - The very bad, and some good, from COVID-19 (5 May)
- ACCC - Retailers granted authorisation to collectively negotiate with landlords (22 April)
- ACCC - Shopping centres to co-operate to support retail tenants (3 April)
- ACCC - Small business guidance about refunds and cancellations due to COVID-19 (2 April)
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