Small businesses shut down to stop the spread of coronavirus will soon have their rent reduced in proportion to the drop in their revenue.

Prime Minister Scott Morrison released the code of conduct for renters and landlords. Known as “the Code”, its purpose is to impose a set of good faith leasing principles for application to commercial tenancies between owners/operators/other landlords and tenants. As such, the Code includes rental waivers and deferrals for commercial tenants hit by the impact of the coronavirus pandemic.

The Code will apply to any tenancies where the landlord or tenant applies for JobKeeper and where they have a turnover of $50 million or less, and will be given effect through relevant state and territory legislation which it will complement during the coronavirus crisis period. It’s goal is to share the financial risk and cashflow impact while balancing the interests of tenants and landlords. It will apply on a casy-by-case basis.

A key point of the code is that commercial landlords will not be able to terminate leases or draw on a tenant’s security, while tenants should honour leases.

“This preserves the lease, it preserves the relationship, it keeps the tenant in the property,” Mr Morrison said on Tuesday.

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“The code brings together a set of good-faith leasing principles.

“Landlords must not terminate the lease or draw on a tenant’s security. Likewise, tenants must honour the lease.”

Banks will provide support for larger commercial landlords, and an independent body would be set up to mandate the new rules.

The National President of the Pharmacy Guild of Australia, George Tambassis, said the Code would provide clarity for commercial tenants, including community pharmacies, where they need to negotiate arrangements with landlords during the Covid-19 downturn.

“Fundamentally, as the Prime Minister said, it is about sitting down and working out an agreed course so that we can all get through this together, and with normal business and employment able to resume,” Mr Tambassis said.

In Oakleigh, real estate agent Jim Lazogas, told Neos Kosmos that he has been inundated by emails from tenants calling for rental reductions. “I have communicated with leasers and they have all agreed to discounts from 35 to 55 per cent. Nobody declined,” he said, and called for measures to be taken to give landlords land tax reductions.

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Finance Minister Mathias Cormann indicated earlier on Tuesday that landlords who supported their tenants in financial distress because of the pandemic would receive land tax relief.