NSW needs a simple solution for commercial landlords and tenants

Urban Taskforce CEO, Tom Forrest, today called on the NSW Government to develop a clear guidelines to address the crisis created by the COVID-19 shut down.

“Clear, fair guidelines need to be developed. The simple mandate for “no evictions for 6 months” and “no lease terminations” is one-sided and makes “negotiation” impossible. Some commercial tenants are, unfortunately, taking advantage of this”, Mr Forrest said.

“As the NSW Government develops Orders or Legislation in relation to this field, it must consider the practicalities of any proposed system.

• The NSW Government should waive land tax for landlords hit by a decline in revenue. A deferral is not sufficient relief.
• A clear requirement for documented evidence must be provided before any deferral or rent relief is considered.
• Government should use the JobKeeper rules as a template for eligibility and financial support should be offered to commercial landlords which, where eligibility is established.”

“No one in the property industry wants to see those in genuine cases of financial hardship brought about by COVID-19 treated badly. This is particularly the case where a business’s revenue has sunk to zero as a result of the government mandated closedowns. However, where governments create a system with loopholes, some will take advantage of those loopholes.

“Many landlords, who are also struggling with a significant downturn in revenue, are being faced with a point-blank refusal to pay rent. There is currently no requirement that any proof be provided of a downturn in revenue like, for example, a copy of relevant BAS statements or a signed statement by a registered auditor”, Mr Forrest said.

Commercial landlords are required to pay land tax and have obligations to the banks and financial institutions. There are implications here all the way down the supply line and actual relief is necessary.

Mr Forrest said that when land is the subject of a development application which is stuck in the NSW planning system, land tax should not be levied on the basis of the higher land use, it should be levied on the basis of the actual use.

“The longer the NSW planning systems takes to approve a DA in an area which has been rezoned (it is the slowest in the country), the more property owners are fleeced by land tax. This needs to change”, Mr Forrest said.

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