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Revised leasing code of conduct splits landlords, retailers

Retailers are still vulnerable to Covid impacts, says ARA CEO. Image: @Dari via Twenty20

As called for by several industry associations in recent weeks the NSW Government has reinstated the Leasing Code of Conduct in order to further protect businesses from the difficulties of an ever-extending lockdown, with premier Gladys Berejiklian now hinting the state could remain locked down until at least November.

“This is a time when all of us have to take stock and take the situation for what it is,” Berejiklian said on Sunday. “We’re looking at what opportunities we can provide our citizens in September and October.”

ARA boss Paul Zahra welcomed the leasing assistance, with rent largely the biggest issue for most retailers struggling with reduced sales failing to make up the difference, and, for the last two months, no code of conduct to steer negotiations putting retailers and landlords in a difficult spot.

“Many are scrambling trying to keep their businesses alive with mounting costs and little or no money coming through the door,” Zahra said.

“We have been in intense discussions with the NSW Government over this matter – particularly in recent weeks as lockdowns show no sign of easing. The Government not only listened – they have improved the scheme by increasing relief to landlords as well as tenants.”

Landlords must now give rental relief to tenants equal to their decline in turnover, spread between a rent waiver and a deferral.

And, under the code, landlords are required to provide this relief to tenants with an annual turnover of up to $50 million – a figure that seems too large to landlords, who have reacted negatively to the move.

“We think it’s bad policy, badly made,” Angus Nardi, executive director of the Shopping Centre Council of Australia, said according to AFR.

“We were pushing for a $5 million turnover threshold and our members [are] already supporting genuine SMEs that are doing it tough. We’re pretty shocked that the government went with the $50 million threshold.”

Under the current code, property firms argue, they will be stretched thin supporting both businesses that need their help and those that don’t.

And, with each week that the state remains in lockdown costing retailers potentially $1.5 billion, Zahra is urging customers to continue to support their local businesses.

“Every dollar you spend keeps someone in a job.”

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