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COVID-19: Eviction freeze on tenants unable to pay rent

The National Cabinet has announced a moratorium on evictions for the next six months for commercial tenancies in financial distress due to the impact of coronavirus.

The nation’s leaders agreed on Sunday that short-term intervention is needed for commercial tenancies to help businesses hibernate through the COVID-19 pandemic.

Prime Minister Mr Scott Morrison urged affected tenants, landlords and financial institutions to “sit down, talk to each other and work this out” to ensure that businesses can survive the crisis.

National Cabinet agreed to a common set of principles, endorsed by Treasurers, to underpin and govern intervention to aid commercial tenancies, which included the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress.

Under the moratorium, the National Cabinet decreed commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus.

“There is no rulebook for this. We are in uncharted territory, but the goal should be shared. And that is, a business that can reopen on the other side, not weighed down by excessive debts because of rental arrears,” Morrison said.

Landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements.

National Cabinet also advised cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance.

Morrison urged businesses to rethink their business model and applauded those who were already demonstrating innovation.

“We now have restaurants who are acting through takeaway. We have retail businesses that are doing more through their online platforms. We have phone-ahead and pick-up type services that are being established that remove the direct contact in retail circumstances,” he said.

Morrison will make further announcements about commercial tenancies this week.