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National Cabinet Mandatory Code of Conduct (Code) for Commercial Tenants and Landlords released on 7 April, 2020

How can we assist you?

The Code for Commercial Tenants and Landlords released on April 7th by the National Cabinet contains complex provisions that if not properly understood by you, could lead to an outcome for you that is sub-optimal and which could penalise your business financially for many months to come.

In this article we have provided a summary of the main provisions contained within the Code however, we encourage you to seek assistance. Our Commercial Leasing Team is ready to assist you to negotiate with your Landlord/Tenant.


If you are unsure of your rights and obligations as an eligible Tenant or a Landlord during this period of uncertainty, please take a moment to consider the points below as well as read the  Code to ensure you understand the full extent of your entitlements and obligations under the Code as well as your lease during this period.

If you engage us we can guide you through the Code and your negotiations including documenting any arrangements you make.  We can explain the application of the Code to you and assist you in formulating a negotiation position.
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Intestacy rules of the Succession

Order of death can be important where it is relevant to the determination of the destination of the estates of the deceased. This was demonstrated in NSW Trustee and Guardian v State of New South Wales [2015] and demonstrates the need to have a Will Lawyer prepare a Will for you.

In this case a mother and son were found dead in their shared home. Both the mother and son died without a Will, so the destination of the estates and the persons entitled on intestacy would be determined by the sequence of death. The mother was a widow, with one child and there was no evidence that the mother had remarried, entered into a de facto relationship or had an issue after her husband’s death.  The son was unmarried and there was no record that he had ever had any children.

Depending on the sequence of death, there are two potential outcomes. If the son had died first the entirety of his estate would pass to his mother. From there the assets would be distributed according to the intestacy rules of the Succession Act 2006. Alternatively, if the mother died first her estate would pass to her son and then be distributed in accordance with the intestacy formula.
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Changes to Property Transactions

The Conveyancing (Legislation) Amendment Act 2018 introduces changes that will provide better protection for purchasers buying property off the plan and more flexibility to those using electronic land contracts and deeds.

Off the plan Contracts:
An off the plan contract is used to sell a property such as a strata unit without its own separate title, given the property does not exist at the time contracts are exchanged.

Off the plan contracts can be beneficial to both property developers and purchasers. For property developers, finance is generally dependent on the percentage of lots that have been pre-sold.

For purchasers, these off the plan contracts are a popular way to enter the property market. This is because the construction and settlement periods can take years, providing extra time for buyers to save funds required for settlement.

However, due to the very nature of the transactions, off the plan purchasers are particularly vulnerable to the actions of developers. The new laws aim to address this vulnerability.
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Unjust Put and Call Options – When a developer Comes Knocking

When a developer approaches you to buy your home (and you’re interested), you need to ensure you get as many facts as you can and seek legal advice. Sometimes the developer may not wish to purchase your land straight away, and you may enter into an agreement to sell and purchase land in the future.

A ‘Call option’ is essentially an approved right granted to the buyer by the seller of a property. This right requires the seller to sell the property to this buyer on the agreed terms at a future point in time. For example, you agree to sell you home to the developer in 2 years for a million dollars. A call option is beneficial in that the price agreed upon will not change irrespective of pricing fluctuations in the property market. A ‘put option’ is an approved right granted to the seller by the buyer. This right enables the seller to request the buyer to buy the land at a future point in time.
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Property Law – Retail Leases Act Changes

Parties to retail leases need to be aware of amendments to the Retail Leases Act 1994 (NSW) (“RLA”) that have come into effect on 1 July 2017.

Some of the key changes to leasing of retail premises and their effects are identified below:
  • New Lessor Disclosure Requirements– Requires full disclosure in the lessor’s disclosure statement of any obligation of the lessee to contribute to the lessor’s outgoings and prevents recovery from outgoings that are not disclosed. This means a lessee will not be liable to pay any amount in respect of any outgoings unless the liability to pay the amount was disclosed in the disclosure statement for the lease.
  • Turnover Rent – Lessees may find shelter from turnover rent clauses in leases by utilising online transaction which now excludes online sales revenue, except where the goods are delivered from or at the premises (or the Centre) or where the transaction takes place while the customer is at the premises.
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Property Law tested by Developer

Jobema Developments Pty Limited is the first developer to test the new property law introduced by the Conveyancing Amendment (Sunset Clauses) Act 2015, which requires vendors to either obtain the consent of purchasers before they can rescind an off-the-plan contract in reliance on a sunset clause in the contract, or to obtain the permission of the Supreme Court to do so.


In this case, Jobema, the defendant, purchased a development site from Xycom, who had exchanged a number of off-the-plan contracts with a sunset date for the registration of the strata plan of 31 December 2015. As part of the purchase, Jobema would assume Xycom’s obligations under the exchanged off-the-plan contracts, one of which was with Mr Wu.

Xycom had carried out minimal work on the project before it had been sold. While Jobema commenced work immediately, the project was not completed by the sunset date. As required by the new legislation, notice of the proposed rescission was served on Mr Wu and the notice cited several reasons for the delay and the proposed rescission. Mr Wu did not consent to the rescission and Jobema subsequently applied for leave in the Supreme Court under the Conveyancing Act.
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Strata committee powers and obligations

The new strata legislation imposes a high standard of care and diligence on the strata committee when it carries out its functions, such that individual strata committee members can be personally liable for their actions. However there are powers which are afforded to the strata committee, which include orders to dispose of abandoned goods left on common property, the power to make orders for payment of contributions (which operates as an enforceable judgment), and the power to dismiss applications for mediation if frivolous or lacking substance. To learn more about your rights as members of a strata committee please do not hesitate to contact one of our qualified strata lawyers in Sydney. Accessing executive committee legal advice from an experienced Owners Corporation Solicitor will ensure that every executive committee member is aware of their obligations and responsibilities.

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Repair and Maintenance

There was a statutory duty on the Owners Corporation to repair common property (section 62(1) of the Strata Schemes Management Act 1996 (NSW)) but no automatic right to damages. Damages for breach of this statutory duty under the new legislation are now automatic. The Owners Corporation will not be under an obligation to repair if it has commenced proceedings against the owner for damage to the common property. For further Owners Corporation Legal Advice please contact a specialist strata lawyer at Matthews Folbigg.