As a landlord facing a request for a rental review due to COVID-19, what are the steps to consider before agreeing or denying the request?
Jonathon See from Townsends Lawyers assesses the steps required.
1. Collate and review leasing documentation and check the type/terms of the existing lease
2. Check relevant leasing laws applicable to the landlord’s lease – Advisable to check with the landlord’s leasing lawyer of the applicable leasing laws
3. Check if rent relief negotiation is required by law or is appropriate and in the financial interest of the landlord given the COVID-19 circumstances. Consider moratorium on tenancy eviction and inability to find a new tenant in short term. Check if the tenant is eligible under the law for rent relief.
4. Initiate rent relief negotiation and request sufficient and accurate information about the financial stress suffered by the tenant as a result of COVID-19 – take into account any government support payments the Tenant receives (either directly or as passed on to the Tenant from the landlord i.e. land tax relief)
5. Implement rent reduction in accordance with the lease agreement – advisable to formally implement the change with the landlord’s leasing lawyer
6. Document landlord’s decision in relation to the rent relief. This should include:
- details of the agreed rent reduction (e.g. temporary rent amount, period when temporary rent amount applies)
- reasons for the change (e.g. financial stress suffered by the tenant)
- request/supporting evidence relied on (e.g. calculations of decline in turnover, tax returns, Business Activity Statements, financial statements)
Jonathon See
Solicitor
Townsends Business & Corporate Lawyers
02 8296 6222
Jonathon@townsendslaw.com.au
www.townsendslaw.com.au