Will you give commercial tenants a rent holiday?

Gave a 33% discount on regional retail, for April. But asking for transparency on their trading figures for future discounts...

 

Gone half rent for a few. Deferred rent for a few. Another I'm about to lock him since he's gone AWOL.

 

Today's AFR : Landlords fried as food chains cut rent

" .... advised a Melbourne landlord it would pay 50 per cent of the rent and outgoings for the month of April within three days of receiving signed consent."

 

For businesses hard hit surely commercial landlords would come to the table. Yeh if you go the bank and ask for a holiday your repayments and interest would be capitalised and that would hurt. But wouldn't that be better than the alternative of having a vacant property during a recession?

 

So someone was telling me in his contract there’s a specific insurance that the tenant bought in favour of the landlord which covers this situation. So he’s going all guns blazing with lawyers when the tenant (a huge group in itself) is trying not to pay now

 

A guarantee perhaps. It's the alternative to a bond. Bank is obliged to release it on request. But then the tenant may refuse to pay

 

It’s been almost 3 months since the lockdown begin.
I am wondering if people have resolved the rent issue on the commercial leasing.

My commercial tenant has not paid anything (rent and outgoing) since March.

 

Have they been trading, trading in a reduced capacity or closed?

 

They stopped trading in late March and started opening again last week.

I have offered 50% rent discount for April and May, and gradual increase rent in proportion to the number of customers allowed in the premise.
Tenant seems to want more.

is this common in the hospitality sector?

 

Our QLD medical centre tenant who a few months ago requested 6 month at 50% reduced rent are still paying full rent.
It has not progressed any further, they have not followed up.
It seems like they were just having a go by sending out the request to all their leased sites, as the letter was from the head leasing department.

 

How are things looking now a month or two on for all things commercial in your area?

 

I've had around 4 commercial tenants (retail) that have just disappeared and not paid a cent. That's probably a rental holiday. Had another 3 who are showing me their financials where their revenue has fallen around 70-80%, so they're paying 20-30% rent, although one of them was just on the verge of recovering and now the Vic Premier has mucked it up again by not strictly enforcing lockdowns the first time in quarantine hotels. I still remember people lecturing me about human rights a few months ago and how 'humane' the lax rules here are where people (turns out some are infected) can roam around freely. Nice.

 

You're lucky you're getting 50%. If I was you I'd take it and keep quiet. See post above.

 

I have offered them 50% discount for 6 months, yet I haven’t received a single cents.
It’s so frustrating when landlord can’t do anything until September.

 

Oh nothing we can do except get run over. I feel sorry for the landlords who don't have like 1 year+ of buffer. ScoMo has basically thrown them under a bus since they're a minority of like 2% (commercial landlords)?

 

Its not until september, with Jobkeeper 2.0 are extended thru march 2021.. landlord cant do anything. As long as tenant can proof 30% down and eligilbe for JK 2.0.

The commercial code remain valid as long as Jobkeeper are running.


COMMENCEMENT/EXPIRY
This Code comes into effect in all states and territories from a date following 3 April 2020 (being the date that National Cabinet agreed to a set of principles to guide the Code to govern commercial tenancies as affected by the COVID- 19 pandemic) to be defined by each jurisdiction, for the period during which the Commonwealth JobKeeper program remains operational.

 

To be honest, I'm thinking of getting permits on my sites to build up, given these guys are not paying rent anyway.