The national cabinet has now met and produced the Mandatory Code of Conduct which imposes a set of good faith principles to apply to retail, office and industrial tenancies. The Code sets out how landlords and tenants must share the financial risk and cashflow risk during the COVID-19 period. The Code sets out how the relationship between landlords and tenants must be developed, noting that all premises are different so that a collective industry position is not possible for each of the different styles of tenancies.
During the pandemic period, or a reasonable subsequent recovery period, landlords must not terminate a lease for non-payment of rent. A number of provisions are listed in the Code obligating how the ongoing relationship will be developed and continue. Finally, if the parties cannot reach agreement, the issue is then to be referred to the relevant State of Dispute Resolution Authority for a binding mediation. Obviously, and to bring an early certainty to the relationship, there is no reason why private mediation cannot be implemented and, provided the parties can reach agreement, a binding agreement is then entered into. For a number of reasons, a facilitative mediation which is only binding once the parties reach agreement is widely considered a better forum than to attend at what must be a binding session. The legislation has not yet been passed by the NSW Parliament as to specific details, but we suspect that this will happen reasonably quickly.
If you require assistance with lease disputes, please get in touch by filling out our online enquiry form with details of your matter and we will get back to you as soon as possible.
