The document summarizes changes to foreign investment, land tax, and commercial leasing laws in Australia in response to the COVID-19 pandemic. Key points include: - The foreign investment review threshold is now $0, review timeframes have increased to 6 months, and foreign investors may face additional conditions. Not seeking approval can result in penalties. - Land tax relief includes a 25% rebate, waiver of the 2% foreign surcharge, and deferred payments for 2021. Rebates must be used to provide relief to tenants impacted by COVID-19. - New laws provide protections for commercial tenants who are SMEs eligible for JobKeeper. Landlords must provide at least 50% rent waiver and

1. Property: Real Estate and
Contracts post COVID-19
Rob Lalor, Director
Rhennen Ford, Associate

2. PresentingWednesdays with RedchipWebinar
Rob Lalor
Director
robertl@redchip.com.au
Rob heads up our Property team
delivering expert advice in property
developments and complex
commercial conveyancing. Rob also
works heavily in the Commercial
space.
Rhennen Ford
Associate
rhennenf@redchip.com.au
Rhennen has extensive QLD and
national expertise in all legal aspects of
property transactions particularly in
retail, commercial and industrial leasing
and general commercial acquisitions
and disposal.

3. Foreign Investment Review
Board Changes

4. Foreign Investment Review Board changes and
costs for foreign persons
• Changes to foreign
investment framework to
remain in place during
Coronavirus pandemic.
• Proposed foreign investment
now requires approval by
Foreign Investment Review
Board (FIRB).
• Applies to all foreign
investment regardless of value
or nature of investor.

5. Key Changes to Foreign Investment Review Board
• Monetary screening threshold now at
$0.
• Review timeframe increased from
30 days to 6 months, including
existing applications.
• Foreign investors may be subject to
additional conditions.
• Applications which support
Australian businesses will take
priority.

6. Consequences for not seeking Foreign Investment
Review Board approval
• Not seeking FIRB
approval (even if
unintentional)
considered as a breach
of the Act.
• Serious civil and
criminal penalties may
apply.

7. LandTax Changes

8. Land tax relief for commercial
and residential property owners
in response to COVID-19
pandemic.
Relief includes:
• 25% land tax rebate.
• 2% foreign surcharge land
tax waived.
• 3-month deferral of land tax
for year ending 30 June 2021.
LandTax– and the concessions that may be
available

9. How can landlords access the relief?
• 25% land tax rebate landlords
must apply through an online
application made through
their onlineOffice of State
Revenue (OSR) account.
• 2% foreign surcharge waiver
applied automatically by the
OSR.
• 3-month deferral for land tax
in 2021 applied automatically
by the OSR.

10. Eligibility criteria for 25% land tax rebate
One of the following criteria must apply:
• Landowner leases property to 1 or more tenants whose
ability to pay normal rent affected by COVID-19, and
the landowner provides rent relief (at least 25%)
compliant with Qld Gov’s “leasing principles”
OR
• Landowner has property available for lease, ability to
secure tenants affected by COVID-19 and the
landowner requires relief to meet financial obligations
(mortgage etc.) compliant with Qld Gov’s “leasing
principles”.

11. • Landowners expected
to apply rebate firstly
to provide relief to
tenants.
• Any remaining rebate
goes to landowners
own financial
obligations (debt and
other expenses).
Further information on 25% rebate

12. Lease Arrangements & Deals

13. The Retail Shop Leases
and Other Commercial
Leases (COVID-19
Emergency Response)
Regulation 2020 (Qld).
Legislation

14. Who does the Regulation apply to?
The Regulation applies to “affected” retail and
commercial leases where:
1. the lease is binding on the parties on
commencement of the lease (whether or not the
lease has actually commenced);
2. the tenant is a “SME entity” meaning the tenant
has a turnover of $50 million or less; and
3. the tenant is eligible for the JobKeeper program.

15. The Regulation will capture leases
that commence after 29 March
2020.
Note, however, that relief will
only apply to rent and outgoings
payable by a tenant during the
period from 29 March 2020 to
30 September 2020 (Response
Period).
What about leases commencing after
29 March 2020?

16. What if an agreement for relief has already been
made?
• The Regulation makes it clear
that it does not affect the
validity of an agreement
entered into before or after
commencement of the
Regulation that is inconsistent
with the Regulation.
• Parties are free to enter into an
agreement inconsistent with
the Regulations.

17. In order to determine
the tenant’s eligibility to
relief, the Regulation
requires the tenant to
provide sufficient and
accurate information to
the landlord evidencing
their eligibility.
When is a tenant eligible and what needs to be
proved?

18. What kind of relief is available?
There is no mandatory amount of rent relief required to be offered.
The relief offered to a tenant must relate to the Response Period
(29 March 2020 to 30 September 2020 ) and have regard to:
1. all the circumstances of the tenant, including reduction in turnover;
2. the extent to which a failure to reduce the rent payable would
compromise the tenant’s ability to comply with the lease; and
3. the landlord’s financial position, including whether it has received any
financial relief.
At least 50% of the rent relief granted must be waived.
The remainder of the rent relief must then be deferred.

19. Does the relief also apply to outgoings?
NO
Landlords are however
required to pass on any
reduction they receive in
statutory charges, such as
land tax and rates, or
insurance premiums to the
tenant where the tenant
contributes to such charges.

20. Are there repayment obligations and what are the
timeframes?
Deferred rental payments
must not be required to be
repaid earlier than 1 October
2020 and over a period
between 2 and 3 years.

21. Can tenants request a lease extension?
If rent is waived or
deferred, the landlord must
offer the tenant an
extension to the term of
the lease on the same
conditions for an
equivalent period as the
rent was waived or
adjusted.

22. What are the restrictions on Landlords?
During the Response Period, landlords under applicable leases will be
prevented from:
1. recovering possession of the premises;
2. terminating the lease;
3. evicting the tenant;
4. seizing any tenant property;
5. forfeiting the lease;
6. charging interest or other penalty charges;
7. drawing on the security under the lease; or
8. enforcing a guarantee,
where that action relates to failure to pay rent, outgoings or carrying on
the permitted use from the Premises.

23. What if theTenant and Landlord cannot agree?
Where parties cannot reach
agreement on leasing
arrangements, the Regulation
includes a dispute resolution
process for the parties to
follow.

24. What are the obligations on theTenant?
Tenants are still required to comply with the
terms of the lease, where possible.
The protections under the Regulation only
apply to the tenant’s obligation to pay rent,
outgoings and keep the business open and
operating. So this does not apply to tenants
that fail to comply with other substantive
terms of the lease.

25. Questions?
07 3223 6100

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Managing business transactions during COVID-19