COVID-19: Western Australia implements its own regulations to protect commercial tenants.

On 29 May 2020, Western Australia released the Commercial Tenancies (COVID-19 Response) Regulations 2020 (Regulations). The Regulations, alongside the Commercial Tenancies (COVID-19 Response) Act 2020 (Act), provide clarity on how the National Cabinet’s Code of Conduct is to be implemented in Western Australia.

The Regulations apply from 30 March 2020 to 29 September 2020 (emergency period).

Who do these Regulations apply to?

The Regulations apply to ‘eligible tenants’, who are small to medium enterprises with a turnover of less than $50 million and are either:

• eligible for JobKeeper; or
• has had a 30% reduction in turnover as a result of COVID-19.

Protections for tenants.

The Act prohibits a landlord from taking ‘prohibited action’ against a tenant, if it breaches the lease during the emergency period by failing to:

• pay rent or pay outgoings; or
• open for business during the hours specified in the lease.

‘Prohibited action’ includes to:

• eviction;
• re-entering the premises;
• termination of the lease;
• seeking damages or payment of interest on unpaid rent or outgoings; and
• claiming on a bank guarantee, indemnity or security deposit for unpaid rent or outgoings.

Landlords are also prohibited from increasing the rent during the emergency period.

Rent relief under the Regulations.

A tenant may make a written application to a landlord with supporting evidence to show it is an eligible tenant.

A landlord must make an offer of rent relief within 14 days of receiving the request. The landlords offer:

• must provide that no less than 50of the rent relief is in the form of a waiver;
• apply during the emergency period;
• may relate to up to 100% of the rent payable under the commercial lease; and
• must be at least proportionate to the reduction in the tenant’s turnover.

Formalising revised rent.

Any commercial agreement reached between the parties should be carefully documented by way of a Deed of Variation to ensure it is binding between the parties and their successors.

The Deed of Variation should include provisions regarding:

• the period during which the variation applies;
• the amount of rent to be paid during the emergency period;
• the apportionment between waiver and any other form of rent relief;
• the timetable for deferral repayments.

We can help.

If you are renegotiating your lease, we can help you navigate this process in line with the Regulations and the Act, and assist you to draft a Deed of Variation covering the important points listed above.

For details of all of our COVID-19 tips and updates, visit the Bespoke COVID-19 Hub.