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Photograph%3A Cassandra Hannagan

Australia flags rent relief for commercial tenants, including restaurants and bars

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Prime minister Scott Morrison today announced relief would be on the way for commercial tenants in Australia, including some of the industries hardest hit by physical distancing laws, such as the hospitality and retail sectors. 

He promised landlords and tenants would have to abide by a "proportionality principle", such that landlords would give tenants a break on their rent proportional to the amount of income tenants had lost due to physical distancing laws. 

The code is expected to require landlords to offer rental waivers proportionate to the losses suffered by tenants. Morrison was clear that exact arrangements would have to be worked out between landlord and tenant on a case-by-case basis, but he stressed the relief would have to be proportionate to the losses. For example, a restaurant that had to close for three months might either decide on three-month rental waiver and a three-month extension of its lease, or it might be able to negotiate a lower rent for the entirety of the lease while keeping the length of rental the same. 

Tenant advocacy groups and landlord groups have been hammering out an industry code of practice in recent days, but Morrison said the code they'd presented to the national cabinet just wasn't good enough yet. 

"The industry code... has not got to the point that we believe it needs to get to to ensure sufficient security for tenants and landlords that are affected by these arrangements," Morrison said.

The PM said when the code was up to scratch it would be passed into law. The rental relief measures will only apply to businesses with a turnover of less than $50 million that are also eligible for the JobKeeper scheme – that is, businesses that have lost 30 per cent of revenue since March 1. 

The rental relief can't come soon enough for Australia's beleaguered hospitality industry, which has struggled to stay afloat despite many venues quickly pivoting to offer takeaway and delivery meals, as well as produce boxes, home-delivered cocktails and other ways to make money. 

Mike Rodrigues, chairman of hospitality lobbying group the Night Time Industries Association (and managing director of Time Out Australia), says many landlords have already stepped in to help their tenants, but more is needed: "In a survey we conducted this week, over 50 per cent of businesses surveyed said they had been extended some sort of rent relief already, but a prescribed scheme would bring certainty and a minimum guarantee of rent relief to a sector desperately in need of good news. 

“While we await confirmation of the exact terms of the commercial tenancy agreement from government, we would encourage landlords to be proactive in helping their hospitality tenants through this difficult time. Your best bet in seeing rents return in due course is most likely through your existing tenant getting its business back up and running, once we are through this challenging time." 

Want to toast the good news? Here are Sydney's best bars offering takeaway and delivery

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