State Commercial Leasing Emergency Act Passed

The much anticipated COVID-19 Omnibus (Emergency Measures) Bill 2020 has passed both houses of the State Parliament today (Act).

However, the catch is that the Act itself doesn’t endorse the Federal Cabinet Mandatory Code of Conduct for SME Commercial Leasing Principles just yet, but rather has authorised the creation of regulations that will give effect to the principles of the Code (Regulations).

The Regulations have not yet been drafted but it appears from both an announcement made two days ago from the State Government together with the creation of the Act that the Code is going to be endorsed.

The Act allows for the Regulations to affect the operation of eligible lease by:

  • Prohibiting the termination of eligible leases.
  • Changing periods in a lease by which things may apply.
  • Limiting other rights or exempting a landlord or tenant from complying with a written obligation under a lease or governing statute.
  • Modifying the operation of an eligible lease or a statute to that lease.
  • Extending the term of an eligible lease.
  • Deeming a provision of the Regulations to form part of an eligible lease.
  • Imposing new obligations under an eligible lease on landlords and tenants.
  • Modifying or exempting compliance with agreements to eligible leases.

Each of these points are necessary to allow Regulations to apply which will give effect to everything that the Code is looking to achieve.

The Act also creates a regime for the Regulations to impose compulsory mediation before litigation and allows for Regulations to impose offences for non-compliance.

The Regulations may also apply retrospectively which they state can be as early as 29 March 2020 and the Act has abolished the need for pubic consultation and an impact statement before the Regulations can be given effect to.

All of this has created the necessary foundation for the creation of Regulations required to endorse the Code.

What remains to be seen is how far these Regulations will go which we anticipate will be even greater than the leasing principles set out in the Code, this being evident by the fact that the Regulations are also to apply to commercial licenses to occupy land for business purposes and not just a commercial lease.  

For support in facilitating discussion and documenting temporary commercial tenancy arrangements please contact the Beck Legal team on 54453333.


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