Rental Reduction Agreement

About Product

This is a legal agreement to reduce the rent on commercial, residential or rural property. It can also be used by a SMSF trustee landlord to reduce the rent on a lease of property with a related party.

► $129.00 (inc GST) - OR provided under your unlimited membership

► The master document has been signed off by LY Legal and is congruent with Australian law.

General Information

Due to the COVID-19 economic and business crisis, many businesses are struggling with poor cash flow. Some landlords are taking reduced rent, or a rent waiver for a period of time.

This includes SMSF Trustees with related party lessees. The Commissioner of Taxation has stated that he will turn a blind eye to any compliance issuen this regard.

Benefits

Easy and quick to use.
A bona fide legal Rental Reduction Agreement that operates by way of a binding deed not a simple non-enforceable minute.
It does not supplant the existing lease agreement but simply changes rent and potentially use of premises; such as sub-letting.
The agreement has been signed off by lawyers LY Legal.
The agreement can be rolled over to a new one, if the term expires and the business is still in trouble. The Commissioner has given compliance relief to 30 June 2021 - see FAQs.

Frequently Asked Legal Questions

Does it change the existing lease agreement?

The existing lease agreement continues to operate with the Rental Reduction agreement, applying alongside the existing agreement and only impacting in key areas such as rent and use of property.

Can the Landlord insert specific conditions?

Yes the Landlord and tenant, just like in the existing lease, can agree to specific conditions that will apply to the Rental Reduction agreement which will have the force of the existing lease.

What leases does it cover?

The Rental Reduction agreement can be used for commercial, residential and rural leases whilst the Covid19 crisis continues. It is not just for related parties but all parties to use.

How does it apply for SMSFs?

It is a legal agreement between a SMSF landlord and a tenant, including a related party tenant such as a family trust or company. The Commissioner has stated: "Some landlords are giving their tenants a reduction in or waiver of rent because of the financial impacts of the COVID-19 and we understand that you may wish to do so as well. Our compliance approach for the 2019–20 and 2020–21 financial years is that we will not take action where an SMSF gives a tenant – who is also a related party – a temporary rent reduction during this period."

How long does this document take to assemble?

Depending on the complexity of the data, this document should take approximately 5-10 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .

Is this document a legal document?

All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”

However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.

The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:

“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.

Is the document easy to read?

All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.

What lawyers sign off on the LYD documents?

All LYD documents are prepared and signed off by LY Legal.

Are the LYD documents reviewed regularly?

All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.

Can I get a sample of this document?

Yes, please email support@lyd.com.au to request a sample document for you to review.