Retailers and shopping centres unite, agree on eviction moratorium

On Sunday night, Prime Minister Scott Morrison announced a series of principles to underpin and govern intervention to aid commercial tenancies.

Among them are a six-month moratorium on evictions, the reduction or waiver of rental payment for a defined period for impacted tenants and the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress.

Speaking to the country, the PM said to tenants and landlords: “We need you to sit down, talk to each other and work this out.”

Heeding the PM’s advice, the National Retail Association (NRA), the Australian Retailers Association (ARA), the Pharmacy Guild of Australia (PGA) and the Shopping Centre Council of Australia (SCCA) sat down earlier this week and negotiated a deal favourable to both sides.

Calling for a national approach through the implementation of a code of conduct for retail leasing that assists both retailers and landlords, the industry groups gave their opinion on each of the PM’s principles.

While agreeing to a short-term, temporary moratorium on evictions for non-payment of rent, the industry bodies did disagree that tenants should be able to terminate leases on the ground of financial distress.

“While other principles apply to the short term, this principle allows an entire lease, which may run for years beyond COVID-19, to be terminated. This does not encourage retailers to work with landlords and financial institutions to formulate a recovery plan,” the groups said.

They, however, vowed to work together in “good faith” to reach a commercial outcome which ensures retailers resume trade and become financially viable within a defined recovery period.

SCCA executive director Angus Nardi explained that shopping centre owners and retailers have a mutual interest in business continuity.

“It’s positive to have a unanimous and timely approach to tackle the pressing challenges we all confront in the current environment in a way that is fair and balanced to everyone,” Mr Nardi said.

ARA CEO Russell Zimmerman agreed, adding that it all comes down to working together to assist policymakers.

“Our industry has a track record of working together, including on challenging issues, and this is about working together and assisting policymakers in the next phase, given our group’s longstanding engagement on retail leasing issues,” he said.

The industry groups have also requested the government to reduce statutory charges such as land tax and council rates, which would be passed on to give relief to tenants.

Further, they reiterated that landlords and tenants not significantly affected by the coronavirus are expected to honour their lease and rental agreements.