RH Commercial Insight

7 Commercial Insight May 2020  15% of the total rent payable is waived (i.e. the landlord waives $4,500 a month that it cannot recover);  15% of the total rent payable is deferred until after the pandemic period ends (i.e. $4,500 a month is deferred); and  Tenant Co Pty Ltd continues to pay the balance 70% of the total rent payable. Let’s say the pandemic period ends in August 2020. The deferred rent is then paid o ff in instalments over the next two years to August 2022. Even though the lease ends in December 2021, Tenant Co Pty Ltd must still continue to pay o ff the deferred rent. How will negotiations be formalised? We recommend that any negotiated outcome that complies with the Code be formalised in the form of a deed which both parties sign. Given the potential length of the pandemic period and the potential sums of money involved, it is important that clarity and enforceability is given to the terms of any negotiated resolution. This is especially the case where the lease ends before the time the deferred rent is to be paid back (as in the above example). In those circumstances, landlords will want the agreement to re fl ect that the deferred rent is to be repaid and potentially security held for non-payment. Please contact your property agent or Wilson Lawyers if you would like assistance formalising any negotiated agreement, or if you have any questions or concerns.** The full text of the Code can be found here. ** The information in this article is current as at 9 April 2020. It is for general purposes only, and re fl ects a rapidly -changing situation. The actual laws enacted by the State Government may vary the e ff ect of the Code as set out in this article. Consequently, this article is not intended to constitute legal advice. This article was wri tt en by: Wilson Lawyers 07 3392 0099