Queensland Government passes regulation to implement Leasing Code

Queensland Government passes regulation to implement Leasing Code

The Queensland Government has now passed regulations implementing National Cabinet’s mandatory code of conduct—SME commercial leasing principles during COVID-19.

The Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) (the Regulation) is made pursuant to the COVID-19 Emergency Response Act 2020 (Qld), which authorised the Government to pass regulations dealing with, among other things, retail and commercial leases.

Under the Regulation, lessors under affected leases are prohibited from taking certain prescribed actions on any of the following grounds during the response period:

  • a failure to pay rent for a period during the response period;
  • a failure to pay outgoings for a period during the response period; or
  • the business not being open for business during the hours required under an affected lease during the response period.

These prescribed actions include (among other things):

  • recovery of possession;
  • terminating the lease;
  • evicting the lessee;
  • exercising a right of re-entry;
  • claiming on a bank guarantee, indemnity or security deposit for unpaid rent or outgoings; and
  • exercising or enforcing another right by the lessor under the lease or another agreement relating to the premises.

Critically the response period is the period starting 29 March 2020 and ending 30 September 2020.

The Regulations set out a process for the negotiation and renegotiation of rent and other conditions which appear to be largely consistent with the Code, although the requirements relating to deferred rent appear inconsistent in that the maximum period for repayment is capped at three (3) years, while the Code provides that this period is the longer of the balance term of the lease or two (2) years.

It is important to note that the Regulations include obligations of confidentiality to the parties (and their advisors and other authorised persons).

The Regulation also contains more detailed processes for dispute resolution.

If you are a commercial tenant or landlord and would like assistance in this area please contact us today on 07 5606 7332, or via our webform to make an appointment –  please let us know if you would like a telephone or videoconference appointment.

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