Struggling to pay rent?

By |2022-06-29T11:27:55+10:0016-6-20|

As Queensland starts to re-open for business, after our COVID-19 peak – small and medium business owners are still struggling to pay rent.

We hear from many business owners who are striving to preserve their businesses, following the pandemic. We constantly see business owners who misunderstand what assistance is available from government – especially around eligibility for JobKeeper, and Queensland’s ‘Commercial Leasing Code’.

Could you be doing more to take advantage of JobKeeper (support for wages) and Code (relief from rent) assistance for your business?  Are you missing out on some of what you could and should be getting – or are you missing out completely?


We regularly see business owners making flawed assumptions, such as:

  • turnover needs to fall at least 30% before you can claim JobKeeper;
  • a bad month in May means that you should consider claiming from June;
  • because they have issued lots of bills (which haven’t been paid), they haven’t had a fall in turnover.

Those assumptions are often wrong. A proper, proactive conversation with your accountant might help you discover that:

  • you can apply for JobKeeper based on estimates of future turnover;
  • it might be more appropriate to use a ‘quarterly’ approach;
  • you may be able to use a ‘cash’ rather than ‘accruals’ approach to turnover, which may greatly assist with eligibility.

If you’ve assumed that you’re not entitled – or if you are unsure in any way – have you really considered this properly? Please: act quickly. Don’t wait – key eligibility dates are passing and you may lose some of your entitlements.  At the moment, we hear that the ATO is being flexible about these deadlines (but none of us expect that to last – do we?).

Commercial Leasing Code 

If you are eligibleµ to receive Job Keeper you are entitled to relief under the Commercial Leasing Code (also called the ‘Code of Conduct’).  This may seriously reduce the rent burden which is weighing down your business, at present. The relief you should get is proportionate to your reduction in turnover.†

Let’s stop for a moment and talk about being ‘eligible’ for JobKeeper.  We know that some people haven’t applied for JK, for cashflow reasons (because you have to pay employees first, then claim and wait for the Govt to pay), or for other reasons.  Good news: you don’t need to be claiming JobKeeper in order to get rent relief under the Code.  Usually, you’re eligible for Code rent relief, if you satisfy the ‘decline in turnover’ test at that time.¥

Have you already conducted some negotiations? Are you already receiving some rent relief for your business premises? If that was negotiated prior to 29 March – or if your circumstances have significantly changed since you first agreed – then you are entitled to revisit any current arrangement under the terms of the Code.

If you haven’t done anything yet about accessing the Code rent relief you’re entitled to, then – don’t wait around for your landlord to look after you.  If you’re subleasing from your franchisor or some other head landlord – don’t wait for them to act, either.

Consider writing to your landlord now:

  • to tell them that you are an “affected lease”.  You will need to qualify for JobKeeper – see above – and must run your business through the premises, or be a retail lease.  If you meet those tests, you’re automatically entitled to relief of rent under the Code.
  • to report that you’re eligible for JobKeeper.  If you’re actually enrolled, then send them your ATO enrolment receipt, if you like.
  • advising that you expect a fall in turnover of [whatever % you expect].
  • consider what information you can give them to accurately provide turnover information. It is confidential, but make sure it is consistent with other information you’ve submitted. NB: profit is not the issue – turnover is the issue.
  • requesting a proportionate amount of rent relief from 29 March onward‡.
  • you could remind them that they cannot call on any bank guarantee, personal guarantee or similar in the meantime.

We repeat: do not wait for your landlord to get rent relief underway.

In some circumstances, it might be appropriate to consider reducing payment of rent, or temporarily stopping payment altogether (especially if you have continued to pay rent reliably, like the fabulous tenant you are…). If you qualify for relief then, provided you have advised your landlord that you are “affected” and you’ve made reasonable attempts to negotiate, your landlord is not entitled to claim you’re in default, nor make any claim on security.

Is your lease expiring soon, or are you being asked to extend or take up a new lease?  The Code may have something to say about those things also – get in touch with us to discuss.

Practical steps

Have you been missing out on JobKeeper benefits, or Code rent relief which you’re entitled to?  Then you should:

– talk to your accountant, or another expert about enrolling and claiming for JobKeeper.  If you haven’t done that yet – do this first.

– talk to your landlord, and tell them the things we’ve recommended above – but write it down.

– ask your solicitor, or another trusted adviser for extra help if you need to.

µ Technically you may qualify for rent relief under the Code even if you are not actually claiming JobKeeper, but you probably should be considering both!
† you also need to be an ‘SME entity’ – but unless you’re a huge business or part of a huge group, chances are good that you will meet this requirement.
¥ there are some other technical rules in s.7(2) of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, mostly relating to weird, overseas, banking and insolvent structures – unlikely to be relevant to you.
‡ unless your JobKeeper eligibility starts later.

Article by Stephen Robertson ( and Paul Morris (, Nicholsons Solicitors (3226 3944)

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