by Tyler Smith | Jun 1, 2020 | Body Corporate Law
On 25 May 2020, the Justice and Other Legislation (COVID-19 Emergency Response) Amendment Act 2020 (Qld) (the JOLAA) was assented to by the Queensland Parliament.
The JOLAA amends a wide range of legislation in response to the COVID-19 pandemic, this article will focus only on the amendments to the Body Corporate and Community Management Act 1997 (Qld) (the BCCMA).
New Body Corporate Provisions
The JOLAA introduces new provisions, being Part 3 of Chapter 7 of the BCCMA, which seek to provide measures to alleviate the financial burden caused by the COVID-19 emergency on bodies corporate for community titles schemes and owners of lots included in the schemes.
The following new provisions of the BCCMA are in force from 25 May 2020, until 31 December 2020:
Sinking Funds Budgets – Section 323D allows a body corporate to adopt or adjust the sinking fund budget for the current financial year, by ordinary resolution, with only regard to the needs of the current financial year, without the requirement budget amounts to meet anticipated major expenditure for future years.
Contributions Levied – Section 323E grants the committee of a body corporate the power to extend the due date for payment of a contribution or installment to any date up to the end of the financial year, for either an individual owner who is suffering financial hardship due to COVID-19, or for all owners of all lots regardless of whether all of the owners are suffering hardship.
Penalties for Late Payments – Section 323F provides that penalties for late payments of contributions levied are placed on hold, and body corporates must not charge penalty interest for late payments between 25 May 2020 and 31 December 2020.
Recovery of Body Corporate Debts – Section 323G provides the body corporate with the discretion to postpone recovery proceedings past the usual two-year deadline. This means that even if a contribution has been outstanding for over two years and a body corporate would ordinarily be required to commence recovery proceedings (for example, pursuant to section 145(2) of the Body Corporate and Community Management (Standard Module) Regulation 2008 (Qld)), a body corporate may make the decision to allow an owner with further time to pay prior to commencing legal proceedings.
Power to Borrow – Section 323H permits a body corporate to borrow more without obtaining a special resolution or resolution without dissent.
When considering exercising these new powers, committees of body corporates will need to consider the individual needs of their body corporate and the circumstances of owners.
If you require assistance in understanding the application of the above mentioned provisions, or if you are a committee and would like advice regarding whether to provide concessions to a lot owner, please do not hesitate to contact Tyler Smith of our office by email at tyler@nautiluslaw.com.au or by telephone (07) 5574 3560. We will be happy to assist you.
by Tyler Smith | May 15, 2020 | Commercial Litigation, Consumer Protection, Credit Management, Credit Management Advice
Telemarketers got the best of you?
We have all received those uninvited telephone calls from someone desperately trying to sell us goods and/or services – often during dinner with the family or at the most inconvenient time possible.
At Nautilus Law Group, we have heard many stories of people agreeing to enter into contracts for goods and/or services as a result of an uninvited phone call, to later find out that the promises which were made to them by the person on the phone are not what they contracted for once they receive the goods or services.
These types of contracts may include a contract to join a program which claims to provide personalised training for property investment or wealth advice, for savings on electricity or natural gas, for home improvements, among many other possible contracts of the like.
The contract agreed to may be expensive and often after the call or even after endorsement of a contract for goods and services unsolicited, the consumer finds those promises evaporate and reality hits that they agreed to an inappropriate arrangement.
What can you do about it?
The Australian Consumer Law provides protections for situations such as this. If the contract for goods and/or services costs more than $100 but less than $40,000, and the contract was made as a result of an uninvited telephone call or an uninvited sale at your doorstep, it is likely that the contract is an unsolicited consumer agreement and specific protections will apply.
These protections include the seller being legally required to send you a copy of the contract within 5 business days after the telephone call, which must clearly state a cooling off period, and include a Notice of Termination which can be used by you to terminate the contract during the cooling off period.
There are further protections in the Australian Consumer Law which impose guarantees that goods be of acceptable quality, match any demonstration model or sample you inspected, be fit for the purpose the business told you it would be fit for and any purpose that you made known to the business before purchasing, and come with full title and ownership. In respect to offers for services (such as personalised wealth planning or property investment classes) the services must be provided with acceptable care and skill or technical knowledge, be fit for the purpose or give the results that you and service provider had agreed to, and the services provider must take all necessary steps to avoid loss and damage to you.
If you have entered into a contract for goods and/or services as a result of an uninvited telephone call or sale at your doorstep, or the goods and services do not meet the guarantees outlined in this article, you may have remedies under the Australian Consumer Law.
If you are unhappy with goods or services you have purchased and require some legal advice, please do not hesitate to contact Tyler Smith of Nautilus Law Group at Tyler@nautiluslaw.com.au or phone 07 5574 3560. We will be happy to assist!
https://www.accc.gov.au/consumers/sales-delivery/telemarketing-door-to-door-sales/unsolicited-consumer-agreements#unsolicited-consumer-agreements
https://www.accc.gov.au/consumers/sales-delivery/telemarketing-door-to-door-sales
https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees
by Tyler Smith | Apr 23, 2020 | Leasing, Property Law
On 7 April 2020, the Federal Government released the National Cabinet Mandatory Code of Conduct (the Code), which is applicable to certain commercial tenancies of small and medium enterprises which have been impacted by the COVID-19 pandemic (SME Tenancies).
The Code is to be introduced into law by each State and Territory by legislation or regulations and will apply from a date after 3 April 2020 (to be defined by each State or Territory in legislation or regulations) and continue to operate while the JobKeeper programme is operational, which is currently until 27 September 2020.
Application of the Code
The Code applies to all commercial tenants (including retail and industrial tenants) who:
- are suffering financial stress or hardship due to the COVID-19 pandemic and are eligible for the Federal Government’s JobKeeper programme; and
- have an annual turnover of $50,000,000 or less (the Turnover Threshold).
In regard to franchises, the Turnover Threshold will be applied at the franchisee level.
In regard to retail corporate groups, the Turnover Threshold will be applied at the group level, and not the individual retail outlet level.
Overarching Principals
The Code provides overarching principals which work to meet the objective for SME Tenants and their landlords to share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to balance the interests of SME Tenants and their landlords.
The overarching principles include:
- SME Tenants and landlords share a common interest to work together to ensure businesses can survive and facilitate the resumption of normal trading activities;
- SME Tenants and landlords will negotiate in good faith to agree on temporary leasing arrangements to achieve mutually satisfactory outcomes;
- SME Tenants and landlords will act in an open, honest and transparent manner, disclosing sufficient and accurate information to achieve outcomes consistent with the Code;
- agreements must take into account the impact of COVID-19 on the SME Tenant in regard to revenue, expenses and profitability, and be proportionate to the impact;
- SME Tenants and landlords must assist each other in their dealings with other related stakeholders, including governments, utility companies, and financers in order to achieve outcomes which are consistent with the Code;
- landlords must not seek to permanently mitigate their risk in relation to default in negotiating agreements; and
- each lease must be considered on a case-by-case basis, having regard to the hardship suffered by the SME Tenant.
Leasing Principles
The Code provides the following leasing principles which should be applied as soon as practicable on a case-by-case basis:
- landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period);
- SME Tenants must remain committed to the terms of their lease, subject to any amendments to their rental agreement negotiated under the Code. Material failure to abide by substantive terms of their lease will forfeit any protections provided by the Code to a SME Tenant;
- landlords must offer SME Tenants proportionate reductions in rent payable in the form of waivers and deferrals of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the SME Tenant’s trade during the COVID-19 pandemic period and a subsequent reasonable recovery period;
- rental waivers must constitute no less than 50% of the total reduction in rent payable under principle #3 above over the COVID-19 pandemic period and may be greater where failure to do so would compromise the SME Tenant’s capacity to fulfil their ongoing obligations under the lease agreement, having consideration to the landlord’s financial ability to provide such additional waivers. SME Tenants may waive the requirement for a 50% minimum waiver;
- payment of rental deferrals by an SME Tenant must be amortised over the balance of the lease term, commencing after the end of the pandemic period; however, should less than 24 months remain in the term after the end of the pandemic period, then a SME Tenant may pay the deferred rent over a period and for a period of no less than 24 months, unless otherwise agreed by the parties;
- any reduction in statutory charges (e.g. land tax, council rates) or insurance incurred by a landlord will be passed on to the SME Tenant in the appropriate proportion applicable under the terms of the lease;
- a landlord should seek to share any benefit it receives due to deferral of loan payments by its financer, with the SME Tenant in a proportionate manner;
- landlords should where appropriate seek to waive recovery of any other expense (or outgoing payable) by a SME Tenant, under lease terms, during the period the SME Tenant is not able to trade, and landlords may reduce services to the leased premises in such circumstances;
- if negotiated arrangements under this Code necessitate repayment, this should occur over an extended period in order to avoid placing an undue financial burden on the SME Tenant. No repayment should commence until the earlier of the COVID-19 pandemic ending (as defined by the Australian Government) or the existing lease expiring, and taking into account a reasonable subsequent recovery period;
- no fees, interest or other charges should be applied on waived or deferred rent;
- landlords must not draw on a SME Tenant’s security for the non-payment of rent (be this a cash bond, bank guarantee or personal guarantee) during the period of the COVID-19 pandemic and/or a reasonable subsequent recovery period;
- SME Tenants should be provided with an option to extend leases for an equivalent period of the rent waiver and/or deferral period;
- landlords will not increase rent (except for retail leases based on turnover rent) for the duration of the COVID-19 pandemic and a reasonable subsequent recovery period; and
- landlords may not apply any prohibition on levy any penalties if tenants reduce opening hours or cease to trade due to the COVID-19 pandemic.
Reaching an Agreement
SME Tenants and landlords should apply the above Overarching and Leasing Principles to negotiate rent relief packages. If the parties fail to reach an agreement, the Code refers to a binding mediation process which will be implemented by each State and Territory; however, in Queensland legislation has not yet been introduced as at the date of this article.
Example of the Code’s Application
A tenant, who has provided sufficient and accurate information to the landlord which demonstrates that the tenant’s usual turnover is less than $50,000,000, has experienced a 70% reduction in turnover since 1 April 2020, due to COVID-19. The tenant is therefore an SME tenant and the lease is subject to the Code.
Taking the Code into consideration, the SME tenant and the landlord agree to the following:
- 35% waiver of rent during the pandemic period;
- 35% deferred rent to be repaid, interest free, over the final 24 months of the lease term;
- 30% of rent will continue to be paid during the pandemic period; and
- the landlord will not terminate the lease due to non-payment of rent and will not call on a personal guarantee.
The agreement is in accordance with the Code as the total waivers and deferrals are proportionate to the reduction in turnover, the total waivers represent half of the reduction in turnover, and the landlord is complying with the moratorium against termination and calling on security during the pandemic period.
If you require assistance in either understanding the application of the Code to your circumstances, or negotiating your lease pursuant to the Code, please do not hesitate to contact Tyler Smith by email at tyler@nautiluslaw.com.au, or phone on 07 5574 3560. We will be happy to assist you!
Code of Conduct – https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf
JobKeeper Payment FAQ – https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_2.pdf
JobKeeper Legislation – https://www.legislation.gov.au/Details/F2020L00419
Author – Tyler Smith
