Scott Morrison has warned commercial landlords they will be looking for new tenants in a “very bad market six months from now” if they fail to show rental mercy during the coronavirus pandemic.
The Prime Minister urged landlords to renegotiate rental agreements ahead of new national guidelines to be discussed in the bipartisan national cabinet on Friday.
The federal government and state premiers will consider measures to encourage commercial landlords to provide rental relief to businesses in financial stress.
“I would urge landlords and tenants to work this out. They’re going to need each other on the other side,” Mr Morrison said.
“I tell you what the great incentive for a landlord is: if that tenant goes bust and can’t pay rent. Then they’ve got no one paying rent and they’ll be looking for a tenant in a very bad market six months from now.
“So my advice to landlords is: sit down with your tenants and work it out.”
While state governments have already committed a moratorium on evictions for the next six months, there are no clear guidelines around rental relief.
New rules and support for residential renters will be decided in the coming weeks.
Mr Morrison said tenancy issues had been a key focus of national cabinet since the body of state and federal leaders was established last month.
“Whether it’s the retailers groups, the landlord groups or the banks and others, they’ve all been engaging very constructively in how we can deal with this very difficult issue,” Mr Morrison says.
“Particularly a retail tenant in the majority of cases, who has had either shut their doors or have had a significant reduction in their revenue.
“Now, they are obviously greatly assisted by the two measures we’ve most recently put in place — both the JobKeeper arrangements, but also the cash flow arrangements we put in place prior to that — which could provide up to $100,000 to these businesses.
“But there will be quite a significant disruption to that normal tenancy arrangement. And what we are seeking to do, working with the states, is to ensure that there are the appropriate incentives in place for landlords and tenants to get together, particularly those who are under great stress.”
Property Council of Australia chief executive Ken Morrison last week called for a balanced solution for an industry in serious trouble.
“The risk is landlords get squeezed like lemons with falling rents on one side and obligations to financiers on the other,” he said.
“If landlords are able to support their tenants in need, which they want to, then they are also going to need support.”
This article originally appeared on www.theaustralian.com.au/property.
