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The Property Council of Australia will work closely with state and territory governments on the detail of the implementation of the new commercial tenancy code of conduct, but says there are a number of questions unresolved by ³Ô¹ÏÍøÕ¾ Cabinet’s decision today.

“We recognise the importance of helping Australian commercial landlords and tenants deal with the difficult impacts of the pandemic period,” said Ken Morrison, Chief Executive of the Property Council of Australia.

“The Code released by ³Ô¹ÏÍøÕ¾ Cabinet today sets out principles to guide discussions between commercial landlords and tenants, and it asks commercial property companies to shoulder a lot of the financial burden.

“There is no doubt that this will be difficult for some property companies, who also have their own financial commitments and obligations to meet.

“We are pleased that ³Ô¹ÏÍøÕ¾ Cabinet has recognised that banks and financial institutions need to support commercial landlords with regard to their debt covenants. This is important.

“We also are relieved that the risky idea of allowing tenants to terminate leases has been taken off the table. That would have been a dangerous precedent for our financial system.

“We will be engaging very closely with state and territory governments on the detail of the Code, who now have responsibility for its implementation.

“There are a number of changes that should be made to the Code, including to protect the position of small property companies,” Mr Morrison said.

Mr Morrison said the Property Council would be seeking further detail from governments on their plans for meaningful land tax support and other assistance for commercial property owners.

“We must avoid a situation where too much of the burden of delivering relief for tenants is expected to be carried by commercial property owners, which include many smaller investors and businesses themselves.

“Similarly, larger property owners have complex financial obligations of their own, including to offshore lenders, which must be given careful attention,” Mr Morrison said.