Queensland’s Regulations for Implementation of Commercial Leasing Code of Conduct

Queensland’s Regulations for Implementation of Commercial Leasing Code of Conduct
Posted on 29 May 2020

Five weeks after enacting its Covid-19 Emergency Response Act 2020, Queensland has finally passed the necessary regulations to implement the National Cabinet Mandatory Code of Conduct released by the Federal Government in April 2020.

Each of the states and territories have responded promptly to the urgent need for protection of the health, safety and welfare of persons affected by the Covid-19 emergency. The pandemic has necessitated sweeping legislative amendments and new regulations to implement mechanisms to deliver national stimulus packages and protect small business, landlords and tenants.

The Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 has been passed in the Queensland Government on 28 May 2020. The enacted regulations are the second necessary step in Queensland’s implementation of the National Code and despite leading the other states and territories on 22 April 2020 with its Covid-19 Emergency Response Act 2020 promptly after release of the National Code, Queensland has taken some time to pass the subordinate legislation.

Roll out of the framework by the States and Territories

For more about Queensland’s Regulations, with a particular focus on dispute resolution, read further below. First, here’s how the other states and territories have introduced legislative reform to implement the National Code:

Western Australia: WA was a close second to Queensland, passing the Commercial Tenancies (COVID-19 Response) Act 2020on 23 April 2020. However, like Queensland it has delayed release of its regulations, until the end of May 2020. We are expecting an imminent release as the code of conduct is scheduled for publication on 29 May 2020.

New South Wales: the Retail and Other Commercial Leases (COVID-19) Regulation 2020was made under the Retail Leases Act 1994 and sections 85 and 87 and 102 of the Conveyancing Act 1919. It was published (and effective) 24 April 2020.

Northern Territory: On 25 April 2020 the Northern Territory’s Tenancies Legislation Amendment Act 2020 commenced, providing the framework for the Territory’s response to tenancy issues posed by COVID-19.

Victoria: In Victoria, on 1 May 2020, the Governor of Victoria made the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licenses) Regulations 2020(Vic) (Regulations), pursuant to the COVID-19 Omnibus (Emergency Measures) Act 2020.

ACT: The ACT is implementing the National Code through the Leases (Commercial and Retail) COVID-19 Emergency Response Commercial Leases Declaration 2020which came into effect on 12 May 2020.

Tasmania: Royal assent was given to the COVID-19 Disease Emergency (Commercial Leases) Act 2020on 13 May 2020.

South Australia:  On 14 May 2020 the SA Govt made amendments to the existing Covid-19 Emergency Response Act 2020with new Regulations commencing operation on the 15th May to regulate the negotiation and determination process.

Review of Queensland’s Regulations

The purpose of the Regulation is set out as to:

  1. Mitigate the effects of the COVID-19 emergency on lessors and lessees under affected leases by giving effect to the good faith leasing principles set out in the National code; and
  2. To establish a process for resolving:
    • Small business tenancy disputes; and
    • Affected lease disputes.

Pursuant to the Regulation, a lease of premises is an affected lease if it is a retail shop lease or a prescribed lease and the lessee must be an SME entity meeting the requirements for the JobKeeper Scheme.

The Regulations set out the general obligations of the parties to the affected lease including obligations for negotiating outcomes and dispute resolution.

Dispute Resolution

Part 3, Div1 – 6 of the Regulations set out the mechanisms for the dispute resolution process between the parties in circumstances where a negotiated outcome cannot be achieved. Where attempts have been exhausted, notice of the dispute must first be given to the Small Business Commissioner who will then nominate a mediator and set a mediation after seven days.

In accordance with the Regulation, if a mediation conference is convened, and a party fails to attend, there may be a costs award against that party in any subsequent proceeding relating to the dispute.

If a resolution is not achieved at the mediation, a party fails to attend, or the dispute is not settled within 30 days after the dispute notice is given to the small business commissioner, then application can be made to the Queensland Civil and Administrative Tribunal (QCAT) for orders to resolve the dispute.

Notice of such application to QCAT must be given to the small business commissioner in writing, by the applicant.

Importantly, the parties are only able to obtain legal representation for the purposes of the dispute resolution process if approval has been given by the mediator. Such approval is to be given in circumstances where the mediator considers that a lawyer would assist the parties in mediating the outcome, or the complexity of the matters the subject of the dispute justifies the involvement of legal representation.

If the landlord and tenant reach a settlement agreement, at any stage throughout the process, and it is later defaulted upon, the non-defaulting party can apply for enforcement of the settlement agreement.

Where to from here?

With the framework now firmly in place in Queensland, there is some certainty as to the options available to parties to lease disputes where negotiations have not been successful. Notwithstanding restrictions on legal representation during the formal process, we encourage parties to such disputes to obtain legal advice as to their rights and the appropriate steps, noting that there are applicable timeframes prescribed by the Regulations for requisite notices, convening of the mediation and making application to QCAT.

Should you require any assistance, don’t hesitate to contact any member of our team.

 

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E: info@croninmiller.com.au

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