Covid-19 lease protections end soon – are you prepared?

Landlords and tenants in WA are being reminded that the temporary commercial tenancy protections under the Commercial Tenancies (Covid-19 Response) Act 2020 are set to end on 28 March 2021.

The measure was originally put in place to support and protect small businesses during Covid-19 and avoid them having to shut down because of their inability to pay their rent.

From March 28 onwards the protections of the Act will only apply to negotiations that have been finalised by a written variation to a lease, are the subject of an ongoing dispute assisted by the Small Business Commissioner, or have proceeded to the State Administrative Tribunal.

If these conditions are not met, from 20 March landlords will, be able to take action against small-business tenants that were prohibited by the Act, unless a formal dispute process is already underway.

Small Business Commissioner David Eaton called on both commercial tenants and landlords to seek assistance immediately if they have not yet reached a formal agreement.

“It is essential for any parties to a small commercial lease experiencing ongoing financial hardship due to the pandemic to formalise rent relief agreements now, in order to be protected under the law,” Eaton said.

“Small businesses should also act now to forecast their operating expenses to avoid unexpected costs and manage their business finances effectively.”

Eaton highlighted the role of the Small Business Development Corporation and its dispute resolution service framework that can help tenants and landlords in reaching agreements on variations to existing leases.

“Tenants and landlords need to maintain a healthy working relationship, so it’s essential that rent relief negotiations recognise the challenges placed on both parties by the pandemic,” Eaton said. “Our team at the SBDC can help both parties negotiate together in a respectful and productive way to comply with the WA code of conduct for negotiating rent relief.”

This article was first published on Inside Small Business, a sibling website to Inside Franchise Business Executive.