While we await the new Code of Conduct for commercial tenancies to be enacted through State Legislation, you might be wondering what you can do for your business to get on the front foot in negotiating your commercial lease. We have put together a list of some things you can start doing now to get your business ready:

1. Make contact with your landlord and start negotiating with them now. There is more than enough detail in the Code of Conduct to guide the negotiations, and we recommend you contact us to review your lease to give you the best chance for success.

When the state legislation is passed, you will be at an advantage if you have already tried negotiating with your landlord and failed, because then you can be first cab off the rank to participate in the Government's binding mediation process. If you only start negotiating once the State Legislation has passed, then by the time you’ve figured out that negotiations aren’t working and you'll have to use mediation, you'll be stuck in the queue with everyone else who didn't start negotiations early.

Of course, another benefit of making contact with your landlord as soon as possible is that if they agree to provide you with a significant amount of rent relief, then you can start receiving that rent relief immediately, which your cash flow will thank you for.

2. When negotiating with your landlord, don't be afraid to ask questions about their financial situation. Remember, negotiations are not meant to be one-sided and you are not the only one who is expected to be open, honest and transparent.

We have seen tenants who are very obliging in handing over all of their information (like profit and loss statements) but forget that landlords are also required under the Code to provide sufficient information in return. At the very least, you should be asking whether the landlord is receiving any reduction in charges such as land tax or insurance, receiving any deferral of their loan payments, or are otherwise in a good financial position, as this should be taken into account in negotiating a fair and appropriate outcome.

3. Ensure that you're abiding by all other clauses in your lease, as all original clauses remain just as enforceable as they were before COVID-19.

If you fail to abide by an important clause in your lease, you will forfeit all of the protections provided to you under the Code (for example, the ban on evictions). Your landlord may already be looking for a way to get around the Code, so do not give them an easy "out" by breaching your lease.

For example, now is the time to make sure that your business falls squarely within the "Permitted Use" identified on the lease. If your lease says "bookshop" but you’re also running a cafe, then you need to amend the lease to make sure that the additional use is listed. If your lease requires you to operate during certain hours, you may include a reduction of those hours in negotiations with the landlord.

Our experienced property team can help with:

  • Reviewing your lease,
  • Negotiating with your landlord, and
  • Documenting any agreement reached.

To give you the best advice and help you get ahead of the curve, our team is staying up to date on all of the latest developments affecting you and your business. We're here to help in Bathurst, Oberon and Lithgow for all your Property and Commercial needs, give our team a call on 1800 650 656.

Aaron Strickland | Solicitor