Many landlords not passing on support measures

WA has extended its COVID-19 commercial tenancy laws – but one pharmacy stakeholder warns that many landlords are telling pharmacies to “take it or leave it”

State Commerce Minister John Quigley and Small Business Minister Paul Papalia said in a statement that the emergency period is to be extended for six months, to March 28, 2021.

The move means existing laws, including the moratorium on evictions, freeze on rent increases and code of conduct for small business commercial lease rent relief negotiations, will continue to apply in a more targeted manner until this date, they say.

After September 29, 2020, when the current arrangements were due to end, WA’s commercial tenancies (COVID-19) legislation will be refined to offer assistance to small businesses that continue to experience financial hardship resulting from the pandemic and qualify for JobKeeper (or their loss in turnover is more than 30%).

These changes will be achieved through regulations currently being drafted.

The Small Business Commissioner and the State Administrative Tribunal will continue to provide free dispute resolution services in relation to the Act and associated code of conduct.

“While some WA businesses have successfully weathered the uncertainty of the past few months, we know many others are still doing it tough,” Mr Papalia said.

“Extending the emergency period will assist these tenants to negotiate further rent relief with their landlords to provide additional breathing space as the WA economy continues to rebound.”

But the Pharmacy Guild of Australia WA Branch is calling for additional certainty for community pharmacies facing financial hardship due to the COVID-19 pandemic, saying that many landlords are still not passing on the support measures to small and medium business owners.

Short-term relief is welcome but long-term reform is vital to business survival, the Guild says.

“It has become clear during this COVID period that legislation is required in order for tenants to receive the financial assistance they need to remain viable and survive into next year,” said Guild Director Matt Tweedie.

Independent tenancy expert David Halvorsen said that the extension is a common sense and practical decision given the severe and ongoing economic impact of COVID-19.

“In order to better manage the permanent structural impacts that we have seen emerge in the WA economy, the government should, as a matter of urgency, conduct its proposed review of the Commercial Tenancy (Retail Shops) Agreement Act 1985,” he said.

“This legislation was not very effective in protecting tenants pre-COVID and is certainly is not fit for purpose in the new economy.”

Throughout the COVID-19 pandemic, community pharmacy has continued to provide patient services. However, this has come at a cost, with 70% of WA pharmacies reporting a decline in turnover of at least 20%.

Many of these businesses are unable to access the financial support offered through the JobKeeper program to retain staff, and therefore are not able to access support provided through the Commercial Tenancies (COVID-19 Response) Act 2020, the Guild said.

Community pharmacies that have accessed government support, frequently report that landlords are acting outside the requirement to act reasonably and in good faith, and instead are engaging in difficult, protracted and delayed negotiations, it said.

“That the imbalance between landlord and tenant has required the National Cabinet to develop a Code of Conduct and two dedicated pieces of quickly drafted Western Australian legislation highlights the challenge,” Mr Tweedie said. 

“As a result, very few community pharmacies have been able to access their entitlements, but rather are caught between an offer of ‘take it or leave it’ from landlords and the alternative, which is an expensive and time-consuming determination service.”

The announcement acknowledges the stresses that commercial leases place on the viability of community pharmacy, the Guild said.

The Guild said it believes a review of the Commercial Tenancy (Retail Shops) Agreement Act 1985 is both required and long overdue.

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