Covid-19 (Coronavirus) and its impact on Businesses and Tenants

With the current Covid-19 (Coronavirus) pandemic increasingly affecting the health and livelihoods of so many people, it is inevitable that the economic impact of the pandemic will hit businesses hard as each passing day reveals more news about the devastating impact the pandemic has on Australia.

Since the outbreak of the Covid-19 (Coronavirus) pandemic, we at AH2 Legal have been busy fielding various questions from numerous concerned clients who are business owners and tenants of commercial property that they occupy for their business usage. Questions such as: “Do I still have to pay rent to my landlord?” and “What do I do if I want to delay payment of my rental and outgoings?” All of these concerns are legitimate and of an urgent nature, given the measures now being taken by the government including the shutting down of non-essential business from 23 March 2020.

The situation is evolving quickly and new measures are being announced on a daily basis by the Australia government to ensure that the impact towards businesses from the Covid-19 (Coronavirus) is minimized as much as possible and that the crisis is handled by all stakeholders as best as they can.

If you find yourself having difficulties with paying rent or are being evicted by your landlord, we at AH2 Legal stand ready to help in this difficult time of uncertainty. In this short article, we will be outlining a few tips on how to handle these tough times and hopefully assist you and your business in weathering this crisis.

As a result of this on-going Covid-19 (Coronavirus) pandemic:

1. We recommend that as a tenant with rental difficulties, that you immediately check your respective lease agreements to see if your lease agreement has any provisions for dealing with such a situation. For example, most commercial leases for businesses will have a provision for Guarantors and would stipulate that if the tenant is unable to make payment of rental to the landlord, that the Guarantor(s) would be responsible for payment and their obligations would kick in if the landlord chooses to enforce the particular provision.

2. We recommend that both the landlord and tenant communicate with one another as early as possible. This is vital as it helps to ensure that both parties are aware of and understand each other’s position during these uncertain times.

3. We understand that some of you might be seeking help with your rent by paying less or paying the rental late, because you are experiencing a downturn in business. If tenants intend to request rent relief from their landlords, they might need to provide business records to the landlord or agent. This is why we always recommend that tenants keep accurate business records to help show how trade has been affected.

4. You might also be able to seek a “repayment holiday” for your rent from your landlord as well as perhaps a delay in payment of outgoings to utility providers. These requests are subject to negotiation with your landlord and utility providers and we are able to assist in such negotiations.

5. We also recommend that the landlord and the tenant arrange a meeting (provided that they can maintain social distancing) to discuss the situation or send an email or letter to the other party detailing their specific issues and their request.

The Australian Prime Minister has advised that further work is being done on identifying how relief can be provided for tenants in both commercial and residential tenancies to ensure that in hardship conditions, there will be relief that will be made available and ensuring that tenancy legislation is protecting those tenants over the next six months at least.

These measures will adversely affect landlords but the Australian government is saying that in these difficult times, landlords will need to make sacrifices.

We at AH2 Legal will work hard to keep track of the various new measures and policies announced by the Australia government as the Covid-19 (Coronavirus) pandemic progresses and will keep you informed as much as we can during this time of crisis.

In the meantime, please stay safe and healthy. Stay home to help flatten the curve. Practice a high degree of personal hygiene and cleanliness in your homes. Stay calm and know that if you have any legal questions or issues, that we at AH2 Legal are available via telephone, email, and WeChat to help you out wherever we can.