ScoMo announces rental relief package… for commercial properties

A couple of weeks ago we reported on the news that Prime Minister Scott Morrison was working on a new rental assistance package.

Today the government outlined a new plan, and whilst it brings welcome relief for many, it only applies to commercial properties.

coronavirus, rental package
Photo: Gwengoat/Istock

Prime Minister Scott Morrison has announced a new rental relief package for commercial tenants who have been impacted by coronavirus.

The new scheme will see landlords obliged to reduce rent for commercial tenants who have been impacted by coronavirus, in proportion to their reported income loss.

It will apply to any tenancies where the landlord has applied for the new JobKeeper payment to maintain its staff, and have a yearly turnover of $50 million or less. Any deferred payments must be allowed a period of no less than 24 months to pay off, regardless of how much time is left on their lease.

Scott Morrison described that landlords were legally required to speak with their tenants about rental arrangements, and they must not terminate the lease. On the other hand, tenants must honour their lease.

Whilst this brings relief for many commercial renters, the fate of many residential tenants remains uncertain. Mr Morrison described that matters relating to residential leases would be dealt with by state and territory governments.

Whilst there has been talk of an eviction ban, which is meant to protect tenants who cannot pay rent due to loss of income from coronavirus, it has not been legislated by individual states. At this point, landlords are technically still able to evict tenants with a “no-grounds” notice.

Speaking to the ABC on the new scheme, Kate Colvin, from affordable housing lobby group Everybody’s Home described:

“The reality is people are actually still being evicted. People lost their jobs sometimes now weeks ago and have no income.”

“A lot of people have tried to negotiate with their landlords,” she continued. “The landlords ha[ve] said, ‘No, you have to pay the full rent’. And there’s not a proper model in place to work out how that will be negotiated.”