Commercial Code of Conduct implemented in WA

Nov 18, 2022, 10:50 AM

With the WA Government’s Code of Conduct now in place, find out what this means for small business commercial tenants and landlords.

Title : Commercial Code of Conduct implemented in WA

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News date : Jun 17, 2020, 08:00 AM

As we enter phase three of Western Australia’s roadmap to ease COVID-19 restrictions, more businesses will begin to reopen. With the WA Government’s Code of Conduct in place, there is a high possibility that the small business you love will still be there.

What is the Code?

The Code of Conduct is part of the Commercial Tenancies (COVID-19 Response) Regulations 2020, which was backdated to the 30 March 2020 and is in place until the 30 September 2020, unless extended further.

While the Regulations have been in place for a few months now, the Code was introduced recently to help provide guidelines for landlords and tenants with small commercial leases when negotiating rent relief during the COVID-19 pandemic.

Why is it needed?

We need to ensure that our economy keeps running, despite what has happened with the pandemic.

By ensuring that a Code is put in place, means that businesses will have a greater chance of being able to reopen their doors once allowed and landlords will continue to have businesses in their properties.

Commercial tenants

If you are a tenant in a small commercial lease struggling to pay rent during the emergency period, it is advised in the first instance to contact your landlord or property manager to discuss your options.

In order to qualify for rent relief as part of the Code, a commercial tenant must:

Operate under a small commercial lease; and
have a turnover of less than $50 million for the 2018-19 financial year; and
be eligible for the JobKeeper program, or

can prove a 30 per cent reduction in turnover due to the pandemic.

Commercial landlords

During the negotiation process, there are a few things that a landlord must take into consideration including:

Offering rent relief to eligible tenants within 14 days of the request being made or any other such period that is agreed.
Requesting reasonable evidence to show the tenant meets the eligibility criteria.
The rent relief provided must be at least proportionate to the tenant’s loss of revenue, with a minimum of 50 per cent of the relief to be in the form of a rental waiver, unless the tenant and landlord otherwise agreed.

Overarching obligations

In addition, the Code also stated that during the negotiation process both the landlord and tenant must ensure that they follow the guidelines listed below, in order to come to an agreement that benefits both parties:

Both must cooperate, and
act reasonably and in good faith, and
act in an open, honest and transparent manner, and
must provide each other with sufficient and accurate information that is reasonable in circumstances for the purposes of negotiations.

More information

For more information, make sure to view our Commercial Code of Conduct FAQs.

Alternatively, you can view the full Code of Conduct.

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