Covid-19 lockdowns give rise to commercial leasing disputes

Legislation introduced by the South Australian government in the early stages of the COVID-19 pandemic in 2020, (namely,  the Covid-19 Emergency Response Act 2020 and COVID-19 Emergency Response (Commercial Leases No 2) Regulations 2020), provided special protections to tenants, preventing landlords from imposing rent increases and/or evicting tenants experiencing financial hardship caused by ongoing restrictions and lockdowns.

This in turn caused confusion from landlords and tenants alike, leading to a spike in commercial lease disputes and both tenants and landlords seeking legal advice from commercial and property lawyers throughout South Australia.

With a new emphasis on negotiating on good faith, and businesses being able to continue to trade after the end of the COVID-19 pandemic, many issues were resolved  without litigation being instigated via negotiations between the parties and mediation, however, more contentious disputes were still being referred to and dealt with in the Magistrates Court.

With the ever-present risk of further Covid-19 outbreaks, businesses across the state face continued uncertainty and financial pressures brought about by ongoing disruptions to trade, especially amongst the state’s hospitality and retail sectors. These ongoing economic challenges highlight the importance of regular and frank communication between businesses and landlords and ensuring rights between the parties are properly documented (i.e. via lease agreements).

A lawyer with leasing experience can assist with a range of matters including, to:-

A Scammell & Co lawyer can also represent either party in any legal proceedings which may be brought before a court because of an unresolved dispute over a lease.

*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.

 

In troubled times existing commercial leasing arrangements may be in need of scrutiny

Coronavirus related economic impacts continue to affect commercial leasing, but there are options available to both tenants and landlords.

Commercial and retail tenants and landlords have been greatly affected by ongoing trading restrictions and forced closures due to the pandemic. This prompted state and territory governments to introduce temporary emergency response legislation. The legislation restricts rent increases for tenants and the ability of landlords to terminate lease agreements.

While such an initiative cushioned the economic fallout for businesses who qualified for financial support, these measures are due to expire in February. Therefore, both tenants and landlords continue to face uncertainties.

Whilst we can be tentatively optimistic about the handling of the pandemic and the economic outlook here in SA, only time will tell how businesses fare in the long term. In the meantime, parties may need to renegotiate on leasing arrangements before emergency legislation is repealed.

A lawyer with experience in leasing can assist with a range of leasing matters such as:

Any renegotiations should be appropriately documented. Depending on the specific arrangements this may entail a simple letter or side deed, or a more formal variation to the current lease.

A Scammell & Co. lawyer can also represent either party in any legal proceedings which may be brought before a court as a result of an unresolved dispute over a lease.

Click here for further information on Scammell & Co.'s commercial and company law services.

*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.