The National Cabinet agreed a mandatory code of conduct on 7 April 2020, outlining a set of “good faith leasing principles” for commercial tenancies, between landlords and tenants, where the tenants have been affected by Covid-19.

Leasing Principles

  • Where it can, rent should continue to be paid; where there is financial distress as a result of Covid-19, tenants and landlords should negotiate a mutually agreed outcome
  • There will be a proportionality to rent reductions based on the decline in turnover to ensure that the burden is shared between landlords and tenants
  • There will be a prohibition on termination of leases for non-payment of rent
  • There will be a freeze on rent increases (except for turnover leases)
  • There will be a prohibition on penalties for tenants who stop trading or reduce opening hours
  • There will be a prohibition on landlords passing land tax to tenants (if not already legislated)
  • There will be a prohibition on landlords charging interest on unpaid rent
  • There will be a prohibition on landlords from making a claim to a bank guarantee or security deposit for non-payment of rent
  • Ensure that any legislative barriers or administrative hurdles to lease extensions are removed, so that a tenant and landlord could agree a rent waiver in return for a lease extension

Who is this applicable to?

This will apply to tenants who are eligible for the Commonwealth Government’s JobKeeper assistance and is a business with a turnover of less than $50 million.

Commencement and Expiry

This Code comes into effect in all states and territories from a date following 3 April 2020. Parties must adhere to “The Code” during the Covid-19 pandemic period, as defined by the period during which the JobKeeper programme is operational.

What does this mean for commercial property landlords?

The Australian Banking Association has announced that “commercial property landlords can get relief as long as you provide an undertaking to the bank that for the period of the interest capitalisation, you will not terminate leases or evict current tenants for rent arrears as a result of Covid-19”.


The Australian Government’s code of conduct is aimed at helping Australian businesses through these uncertain times with a fair set of rules for both the landlord and the tenant. Businesses are encouraged to work toward a fair agreement with the landlord.

Let Us Help

If your business has a turnover of over $1 million, ABJ Solutions is offering a complimentary 30 minute Zoom meeting to help answer questions and model critical decisions with you. Get in touch with us today so that we can help guide you through this challenging time.