Commercial Tenancies

Commercial Tenancies Relief supports business tenants, commercial property landlords and owner-operators significantly affected by COVID-19.

The Relief includes commercial leasing principles and a rates relief scheme. It requires landlords to negotiate in good faith with tenants who:

  • qualify for the Commonwealth JobKeeper program (note that new JobKeeper arrangements apply from 28 September 2020); and
  • cannot afford to pay their rent, or keep up regular business hours due to the impacts of COVID-19

before terminating the lease or taking other adverse action against the tenant.

Landlords and tenants should discuss alternative lease arrangements having regard to the leasing principles in the  National Code of Conduct (the National Code).

The rates relief scheme allows property owners to receive assistance with their general rates bill if they reduce rent for tenants significantly affected by COVID-19. The support is targeted to landlords with tenants that have been significantly impacted by COVID-19, including affected owner-operators.

If a tenant’s business income is significantly impacted by COVID-19 they should discuss alternative rental payment arrangements with their landlord in line with the National Code principles. Those businesses not significantly impacted by COVID-19 must continue to pay rent.

Extension of Commercial Tenancies Declaration

On 10 September 2020 the ACT Government extended arrangements offered to Small and Medium Enterprises who are struggling to pay commercial rents during the COVID-19 Health Emergency through the Leases (Commercial and Retail) COVID-19 Declaration 2020 (No. 2) (the new Declaration).

The new Declaration comes into effect on 28 September. It will stay in place until no later than 31 January 2021.

The new Declaration maintains the requirement for a landlord to engage in good faith negotiations with an impacted tenant before moving to terminate the lease or take other action against the tenant. The definition of an impacted tenant in the new Declaration reflects upcoming changes to the JobKeeper scheme that will be in effect from 28 September 2020.

The new Declaration will also revoke the current Leases (Commercial and Retail) COVID-19 Emergency Response Declaration 2020 (the first Declaration). Impacted tenants under the first Declaration will remain protected for prescribed breaches that occurred between 1 April 2020 and 27 September 2020.

Commercial tenants

If you own a business and are finding it difficult to meet your rental payments due to COVID-19, you can request a rent reduction from your landlord.

If you have qualified for the Commonwealth JobKeeper program and have turnover of less than $50 million a year, your landlord must negotiate with you about your rent and other terms of your lease before taking action against you for failing to pay rent. Please note that new JobKeeper arrangements apply from 28 September 2020.

This is a requirement for landlords under the Leases (Commercial and Retail) COVID-19 Emergency Response Declaration 2020. This is also a requirement under the new Commercial Leases Declaration which applies from 28 September 2020.

The Declaration requires landlords to engage in good faith negotiations with eligible tenants having regard to the leasing principles set out in the National Code.

The ACT Government introduced this requirement so these important business relationships can continue, despite the impacts of COVID-19.

For a complete breakdown of the new requirements and who they apply to see the ACT Government Guidance Note.

Requesting a rent reduction

To request a rent reduction:

  • Review the Commercial Leases Declaration and the guidance notes to understand the requirements;
  • Contact your landlord in writing to request a meeting to negotiate a rent reduction based on the National Code;
  • Prepare evidence of your eligibility under the Commercial Leases Declaration; and
  • Negotiate your new rental arrangements.

You can contact the Local Business Commissioner for support at any point in the negotiation.

COVID-19 Local Business Commissioner

The COVID-19 Local Business Commissioner is working with the ACT business community to implement the following:

  • working with commercial tenants and landlords to mediate changes to commercial lease arrangements;
  • providing advice to the ACT Government on systemic issues facing the business community in the ACT as a result of COVID-19; and
  • referring individual businesses that require assistance to relevant government support.

Please note the role of the Local Business Commissioner is to assist you to reach an agreed outcome through mediation. The role of the Commissioner does not extend to the provision of legal advice in relation to leasing matters.

This service is voluntary, confidential and free. You can read the Instrument of Appointment for the full terms of reference. And you can contact the Commissioner to find out how to access this free service.

Email: CIE@act.gov.au
Phone: (02) 6207 8976

Landlord and owner operators

If your tenant has qualified for the JobKeeper program and cannot pay rent due to the impacts of COVID-19, you must negotiate in good faith with regard to the principles of the National Code before you can terminate an existing lease, or take other adverse action against the tenant. These principles address matters of rental reduction and consideration of your tenant's financial circumstances.

This is a requirement for landlords under the Leases (Commercial and Retail) COVID-19 Emergency Response Declaration 2020. This is also a requirement under the new Commercial Leases Declaration which applies from 28 September 2020.

It applies where commercial tenants have qualified for the Commonwealth JobKeeper program and have turnover of less than $50 million a year.  Please note that new JobKeeper arrangements are in place from 28 September 2020.

For a complete breakdown of the new requirements and who they apply to  see the ACT Government Guidance Note.

If you offer, or have offered, to reduce your tenant’s rent due to COVID-19 you may be eligible to apply for a rebate on your commercial rates from 1 April 2020 until 31 December 2020.

Owner-operators significantly impacted by COVID-19 can also apply for a rebate, from 1 April 2020 until December 2020.

The support to commercial landlords of properties with an average unimproved value (AUV) of $2m or below are based on the following tiered category system to ensure business tenants or owner operators suffering the most financial hardship get the highest level of support:

Category 1

Businesses partially affected or unaffected (no more than 30 per cent reduction in business income).

Business tenants should continue to pay rent.

Category 2

Businesses significantly affected (at least 30 per cent reduction in business income) but still operating.

Landlords with business tenants in this category, can receive 25 per cent of any reduction to a tenant’s rent as a rebate from the government. This rebate is capped at $5,000 per quarter (or around $380 per week) or total quarterly rates (whichever is lower).

Category 3

Businesses who have effectively shut-down operations (at least 80 per cent reduction in business income).

Landlords with business tenants in this category can receive 50 per cent of any reduction to a tenant’s rent as a rebate from the government. This rebate is capped at $8,000 per quarter (or around $615 per week) or total quarterly rates (whichever is lower).

How to reduce your tenant’s rent

To reduce your tenant’s rent and receive the rates rebate:

  • Review the Commercial Leases Declaration and the guidance notes to understand your obligations and those of your tenant;
  • Contact your tenant in writing to request a meeting to negotiate a rent reduction having regard to the National Code;
  • Review your tenant’s eligibility in line with the tiered category system; and
  • Negotiate new rent arrangements with your tenant.

You can contact the Local Business Commissioner for support at any point in the negotiation.

How to apply for rebates

  • If you are a landlord of commercial property with an AUV of $2m or less, renting to one or more tenants who fit into category 2 or 3, you can apply by completing the Commercial rates credit: Landlords application.
  • If you are the owner-operator of commercial property with an AUV of $2m or less and your business income has been impacted in the same way as category 2 or 3, you can apply for a rebate by completing the Commercial rates credit: Owner-operators application.
  • If you are the owner of commercial property with an AUV of more than $2m, you can still apply to the Government for assistance. However, the extent of support will depend on your circumstances. Click here to find out how to apply.
  • Visit the ACT Revenue Office website for more information about rates rebates.

COVID-19 Local Business Commissioner

The COVID-19 Local Business Commissioner is working with the ACT business community to implement the following:

  • working with commercial tenants and landlords to mediate changes to commercial lease arrangements;
  • providing advice to the ACT Government on systemic issues facing the business community in the ACT as a result of COVID-19; and
  • referring individual businesses that require assistance to relevant government support.

Please note the role of the Local Business Commissioner is to assist you to reach an agreed outcome through mediation. The role of the Commissioner does not extend to the provision of legal advice in relation to leasing matters.

This service is voluntary, confidential and free. You can read the Instrument of Appointment for the full terms of reference. And you can contact the Commissioner to find out how to access this free service.

Email: CIE@act.gov.au
Phone: (02) 6207 8976

Other assistance for commercial property owners

Find out more about support you will automatically receive and other support you might be eligible for through the ACT Government's Economic Survival Package page.

Download the COVID-19 commercial tenancies and owner-operated businesses fact sheet

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Acknowledgement of Country

We acknowledge the Traditional Custodians of the ACT, the Ngunnawal people. We acknowledge and respect their continuing culture and the contribution they make to the life of this city and this region.

Last Updated: September 11 2020