Navigating Leases and the COVID-19 Outbreak

The outbreak of COVID-19 is impacting global markets across all industries and causing significant disruption to businesses around the world.

In this moment of uncertainty, and the situation rapidly changing, we are closely monitoring both State and Federal government proposals to ensure that your rights as Landlords and/or Tenants are protected.  These proposals might include preventing Landlords taking possession of leased premises and facilitating rent relief for Tenants.

The Victorian Government stimulus package announced last week also included the ability for commercial tenants in government buildings to apply for rent relief as well as the ability to defer land tax for eligible small businesses.  There have also been announcements from the City of Geelong and the City of Port Phillip flagging rental relief for their tenants.

In a move that may well be replicated in other States, the Tasmanian Government is currently debating a Bill that would prevent Landlords from terminating a Lease for the non-payment of rent for a period of 120 days, with a possible extension of a further 90 days in exceptional circumstances.  Obviously such legislation, if passed, would see significant benefits accrue to certain Tenants.

If you are being financially impacted by the COVID-19 crisis, it is crucial that you review your contractual documents, including leases, to determine your legal rights.  Your lease may contain a force majeure clause or other provision which extends relief from the performance of certain obligations under the contract when certain circumstances beyond the control of the parties, or one of them, arises.

There are also common law rights, such as the frustration of a contract, which may have application.

We understand that these are challenging times. Our team is currently operating remotely and will be available via phone or email if you need us.