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Commercial Leasing During Lockdown – What To Do If You Can’t Pay Rent

Many business owners are wondering how they will afford to pay their rent over the next few months as lockdown measures continue. 

This strain has particularly impacted those that were part of stage one and two restrictions (such as bars, clubs, gyms and travel businesses), many of whom are already struggling. As we move to stage three lockdown and more businesses are forced to close, many business owners are calling for a pause in rent to survive. 

Notably, Solomon Lew, the chairman of premier investments which oversees brands such as Just Jeans, Smiggle and Peter Alexander, has told landlords that the company will not pay rent while closed due to the crisis. 

We feel as if there are promising signs on the horizon. There is a strong indication the government is set to introduce a bill that will stop landlords from evicting tenants – residential or commercial, for the next six months. 

Nothing is set in stone yet, so it’s up to you and your landlord to negotiate a change in lease payments if required.

These issues would usually be brought to the Victorian Civil and Administrative Tribunal (VCAT). All cases are now adjourned until mid-May, so even if a landlord wanted to evict a tenant such disputes would not be able to be adjudicated in the near future. 

Of course, the flow-on effect of any bill that alleviates rent payments from tenants will be banks giving mortgage holidays to landlords who will not be able to pay their mortgage without the rent from their tenants. 

If the parties want some certainty, the best advice is to take a practical approach and negotiate sensibly. The government have made it clear that relief will come; we just don’t know exactly in what form that will be yet. So keep that in mind when in discussions with your landlord or tenant.

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Commercial Leasing During Lockdown – What To Do If You Can’t Pay Rent : City Pacific Lawyers

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