How will COVID-19 impact your property settlement?

How will COVID-19 impact your property settlement?

Falling asset prices, changed court procedures and a pessimistic future economic outlook are valid factors which may negatively impact the outcome of your property settlement. Within the context of the COVID-19 pandemic, you should consider whether it is possible to put your property settlement on hold. If you decide to continue with a property settlement, be aware of the risks in relation to asset valuations, and consider the following three points.

1. Use percentages for the division of your assets

The financial crisis caused by the pandemic has resulted in a sharp drop in the value of shares, property, interest rates and superannuation. There is a way that you can still obtain a fair division of the assets that are included in a property settlement by using percentage division instead of predetermined dollar value.

In the case of property, there is a risk that the sale price does not reach the expected value due to the current limitations on open houses and the cautious buyer sentiment. For example, if orders were drafted so that the sale proceeds of the family home were split where one party receives the first $150,000 and the other receives the remaining sale price, the parties would be disadvantaged if the house sold for less than expected.

The better alternative in times of economic uncertainty is to divide the sale proceeds between the parties by way of a percentage split. In the previous example, one could allocate 65% to one party and 35% to the other party. This is a more realistic approach and enables both parties to bear the risk of an unsettled economy. However, you should still seek financial advice from a professional as to whether it is the best time to liquidate your assets or sell your property.

2. Take advantage of alternative dispute resolution

Due to health concerns and social distancing, the courts have delayed hearing non-urgent matters, which may result in the prolonged delay of hearing your settlement matter. However, alternative dispute resolution options remain open, including mediation and settlement conferences. The options of negotiation and mediation settlements have opened more time and cost effective pathways to resolving property settlements during this time.

There are a variety of technological tools available to facilitate alternative dispute resolution including Zoom, Skype and telephone conferences. Ultimately, this means that parties in property settlement matters, including their legal representatives, are able to participate in mediations without putting themselves and the health of others at risk.

Once you come to an agreement, this can be finalised by way of consent orders filed in court. Currently, consent orders may be filed online with the court electronically. Most courts are not allowing in-person attendances due to the COVID-19 restrictions.

3. Wait to value your business

In light of the economic turndown and closure of many non-essential businesses, it may be best to place potential valuations of businesses on hold until the economy recovers. Even if you have experienced profitability in the previous years, it is likely, due to the pandemic, that losses have resulted from reduced demand, office closures, staff being let go or stood down (see our article on standing down employees here) and affected supply chains. Some industries have experienced profit during this time, and if this is the case of your business it could be the perfect time to seek a valuation. We advise that you seek financial advice as to whether this is the best option for you.

Further Information

We know that a fast and cost-effective resolution is the most desirable in the circumstances. If you would like more information on how we can assist you with your property settlement matter or any other family law matters, do not hesitate to contact us on 9963 9800 or at

Commercial Leases during COVID-19: What You Need to Know

Commercial Leases during COVID-19: What You Need to Know

There has been a lot of dialogue in the media regarding the Federal Government’s initiatives to combat the impact of COVID-19 on Australian businesses. It can be confusing to understand what exactly your responsibilities are as a tenant or landlord in the circumstances.

In this article, we break down these initiatives for you and explain your responsibilities as either a landlord or tenant during these uncertain times.


The Mandatory Code of Conduct (the Code) applies to commercial tenancies, including properties which are:

  • retail
  • office
  • industrial

For Tenants

The Federal Government announced the introduction of the Mandatory Code of Conduct (the Code) which will apply to commercial leases for eligible small to medium enterprise (SME) tenants.

How do I know if I qualify?

The Code will apply to SMEs that:

  1. are suffering ‘financial stress or hardship’; and this means that you must demonstrate the ‘company’s inability to generate sufficient revenue as a direct result of the COVID-19 pandemic that causes the tenant to be unable to meet its financial and/or
    contractual commitments’
  2. are eligible for the JobKeeper program; and
  3. have an annual turnover of up to $50 million.

What are my obligations under the Code?

  • You must remain committed to the terms of your lease (subject to any changes to the rental agreement as a result of negotiations with your landlord due to the Code).
    • Any failure to not properly abide by the terms of your lease will mean you forego any protections provided to you as a tenant under the Code.
  • You must negotiate in good faith.
    • This means to act in a sincere and fair way to ensure your interests as well as your landlord’s interests are considered.
  • Provide accurate information.
    • It is your responsibility to provide truthful financial information for the purposes of negotiation with your landlord. For example, you must provide evidence of your financial position such as accurate turnover figures and other relevant financial statements.
  • You must have regard to your landlord’s financial situation and ability to provide additional waivers and deferrals of rent.
  • Pay back your rental deferrals.
    • Payment of rental deferrals by the tenant must be paid in instalments or transferred over the balance of the lease term and for a period of no less than 24 months.
  • Consider your insurance policy.
    • Contact your insurance provider to find out whether your insurance policy will apply in the current conditions.
  • You must work towards achieving a mutually satisfactory outcome with your landlord.

For Landlords

Once the Code takes effect, ‘eligible’ tenants may be able to receive rent reductions, either in the form or waivers or deferrals by their landlords. A “waiver” means the liability no longer exists, whereas a “deferral” means the liability remains but is paid later.

What are my obligations under the Code?

  • You must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals of up to 100% of the amount ordinarily payable, based on the decrease in the tenant’s trade and profit during the COVID-19 pandemic period.
    • Rental waivers must constitute no less than 50% of the total reduction in rent payable.
    • Tenants may decide to waive the requirement for a 50% minimum waiver by an agreement with you.
  • You must not terminate your lease with your tenants due to non-payment of rent during the COVID-19 pandemic period.
  • You should provide to the tenant an opportunity to extend their lease for an equivalent period of the rent waiver and/or deferral period.
    • This is intended to provide the tenant additional time to trade, on existing lease terms, during the recovery period after the COVID-19 pandemic concludes.
  • You must discuss relevant issues to the tenancy, negotiate appropriate provisional leasing arrangements, and work towards attaining a mutually satisfactory outcome for you and your tenant.
  • You must act in an open, honest and transparent manner.
  • You must provide adequate and correct information within the context of negotiations.
  • You must communicate and pass on any reduction in charges (e.g. land tax, council rates). This is important if the lease obliges the tenant to contribute to “outgoings”.
  • You should, where appropriate, attempt to waive recovery of any other expense (or outgoing payable) by a tenant, under lease terms, during any period in which the tenant is not able to trade.
  • You must agree to a freeze on rent increases for the duration of the COVID-19 pandemic (except for retail leases based on turnover rent).

A copy of the Mandatory Code of Conduct can be found here.

Further Information

It is important to be fully aware of your obligations under your commercial lease agreement. If you would like more information on how we can assist you with your matter, do not hesitate to contact us on 9963 9800 or at Check out our blog here for further more information and analysis on the restrictions and rules in place during COVID-19.

Etheringtons Solicitors extends our deepest sympathies to those experiencing hardship or health concerns during this difficult time. Further information about COVID-19 can be found at:

COVID-19: Commercial and Retail Leases

COVID-19: Commercial and Retail Leases

Due to the recent outbreak of COVID-19, businesses and individuals are being forced to navigate a myriad of challenging issues which they have never had to face before. One of the most common questions businesses may ask is “I need to shut my business but what happens to the leases?”

To answer that question, the starting point is your lease agreement.

Tenant perspective

Businesses which rely on overseas supplies, tourists and overseas students, are experiencing a significant disruption in operations and a major decline in revenue. This will not only put a strain on their ability to deliver products but also on the cash flow thus making it challenging to keep the business afloat. In these circumstances, businesses are considering shutting their operations until the COVID-19 crisis is over.

Rent is a major expense for most businesses – particularly for retail shops in shopping centres. Tenants may be bound by long term leases which do not provide for early termination. One may look to the doctrine of frustration of contracts. Frustration of contract occurs when an event (beyond the parties’ control) occurs that makes the performance of the contract impossible. A frustrating event will end the contract early and allow each party to be discharged from future performance of the contract. Is COVID-19 a frustrating event? Frustration is incredibly difficult to prove and it is unlikely that a court will find COVID-19 to be a frustrating event but it depends on the circumstances of a particular case. If the government orders a lockdown, whilst difficult to prove, there may be an option for one of the parties to argue frustration.

‘Force majeure’ means an unforeseeable event that prevents you fulfilling a contract. Force majeure clauses allow parties to a contract to end the contract early where a party is affected by an unavoidable or unforeseen event such as destruction of premises or a natural disaster. Typically leases do not contain force majeure clauses. If it does, however, the clause may list lockdown as one of the force majeure events. If the government orders shopping centres to close in order to slow down the spread of virus, it may constitute a force majeure event allowing early termination.

Force majeure clauses are contractual terms which the parties agree upon execution of contract. They are express terms which cannot be implied. Frustration, on the other hand, is a common law principle.

You may want to continue operating, however, your landlord may decide to shut the building to prevent the spread of COVID-19. Your lease agreement should contain a clause in a tenant’s favour allowing a reduction in rent if you cannot reasonably access the premises. You may also consider a claim against your landlord for breach of quiet enjoyment of the premises.

Landlord perspective

Your tenant may unilaterally decide to shut their business or store due to spread of COVID-19 and demand a rent relief for the period of closure. Tenants do not have a right to unilaterally shut their business and demand rent relief, without an express condition in a lease allowing the tenant such a right unless they can successfully argue ‘frustration’ or ‘force majeure’.

Your retail tenant will be required to shut if the government requires retail shops to close. Both parties are required to adhere to notices or orders issued by public and statutory authorities. A failure to comply with government notices or orders constitutes a breach of your lease.

You tenant does not have a right to withhold rent under any circumstances. Recently, however, in response to the COVID-19 outbreak, legislation has been passed to regulate or prevent the exercise or enforcement by a retail lessor of a right that they have under the lease or the Retail Tenancies Act or Retail Leases Act. This includes prohibiting a lessor from taking possession of the premises. These measures will last no longer than six months commencing 25 March 2020.

Practical approach to leases

As the COVID-19 situation is evolving daily, we recommend that you check your lease documents and consider the actions you should be taking to minimise the damage to your business, if you are a tenant; or to your investment, if you are a landlord. You should also be reviewing your insurance policies to ascertain what losses are recoverable under your policy, if any.

Further information

If you would like further information regarding leases or simply corporate and contract law advice, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via email at

COVID-19 Challenges: Strata buildings and body corporates

COVID-19 Challenges: Strata buildings and body corporates

It is an uncertain time for everyone with the rapid increase of COVID-19 infections and government restrictions. To slow the spread of the virus, the protective measures may last up to six (6) months. There may also be further restrictions. Such measures have a momentous impact on those who live in a strata complex.

Due to the rise of high density living, more and more people are living in strata buildings where resources, assets and facilities are shared. This means that strata residents have higher risk of exposure to virus. Think of how many people touch lift buttons, the stair rail and entrance door handles. This is an unfortunate reality for many, which can be extremely difficult to avoid. Social distancing is almost impossible in high rise lifts.

1. Disclosure

Where there is someone that lives or works in the building, or even someone who has visited the building, has a confirmed case of COVID-19 or has been asked to self-isolate, there may be an obligation for the strata corporation to notify the building residents. This can be easily done by sending out notices and placing further notices in the common areas. For privacy reasons owners corporations cannot disclose the name, the unit number or any other information which might identify the person(s) who has contracted the virus or is required to self-isolate.

2. Repair and Maintenance

Owners corporations are responsible, under the Strata Schemes Management Act 2015 (NSW), to repair and maintain common property. In doing so, owners corporations should be proactive and take the necessary precautions to ensure the building is safe and protect their residents from the risk of the virus spreading. Where possible, these include:

  1. closing amenity rooms;
  2. closing recreational facilities;
  3. increasing cleaning and sanitisation protocols in the building;
  4. installing sanitisation stations, if possible;
  5. encouraging residents to use proper hygiene measures and to self-isolate; and
  6. restricting meetings.

3. Health and Safety for workers

Where a contractor is working on site, owners corporations have legal obligation to upkeep the health and safety of the workplace. This includes taking the necessary precautions to protect workers from harm, including the risk of contracting COVID-19.

4. Restrict AGM, EGM and other meetings

Recently, the government has implemented strict social distancing rules which include:

  1. all persons should be at least 1.5 metres apart;
  2. there should only be 1 person per 4 sqm indoor; and
  3. public gatherings must be avoided altogether.

With such strict measures, this limits the ability for owners corporations to hold general meetings. If a meeting must be held and approvals are required, you should consider:

  1. holding an electronic meeting (video conferencing), where possible;
  2. asking every owner to sign a waiver to waive the requirement to hold a meeting and consent to the resolutions at the resolutions of the meeting; or
  3. holding the meeting but ensure it is held at a venue which accommodates for the current social distancing rules (outdoor space) but this would only be possible for smaller body corporates.

We recommend that you seek legal advice before deciding whether or not to hold a meeting.

Further information

It is important to be fully aware of your obligations and options during these difficult times. If you would like further information, please do not hesitate to contact one of our experienced strata law solicitors on 9963 9800 or via email at

More information about COVID-19 can be found here:

Recent bushfire crisis: My home insurer refused to renew my policy. What do I do?

Recent bushfire crisis: My home insurer refused to renew my policy. What do I do?

The recent bushfires across the country have had devastating effects on the lives of so many Australians. Many have lost homes, treasured possessions and most terribly, a family member or friend.

Recently, we have had clients call us to seek advice on their rights in respect of their home insurance. Some overlooked paying their insurance premium. When they were told to evacuate their homes, they rang their insurer to check that their policy was current and were told that they had not paid the premium and therefore the policy had expired. They asked to pay the premium immediately to renew the policy. However, their insurer refused to renew the policy due to the high risk of bush fires in the area.

Notice Provided by Your Insurer

The Insurance Contracts Act provides that an insurer must notify an insured customer in writing no later than 14 days before the expiration of their policy stating that their policy will expire if not renewed or negotiated in that time.

It is important to note that if the insurer did not provide this notice, even though you did not renew your policy, the policy is taken to continue as if you had renewed for the period of the original policy. So it is important to check first whether you have received this notice.

In August of 2019, a similar event occurred where Coles Insurance declined to continue coverage for properties classified in high-risk flood zones in NSW. Coles Home Insurance informed customers with properties in Waterside Estate that it would terminate policies in the area at their time of renewal due to the outlined flood risks in the region. The customers could elect to have the decision reviewed.

Special Circumstances

However, you might be able to show that there were special circumstances that made it impossible for you to renew your policy. These may include that you were overseas, or severely ill and in hospital.

Seeking Legal Advice

It is important to be fully aware of your insurance renewal date and ensure your insurer is keeping you accurately informed about the status of your policy.

If you would like further information regarding building insurance or general litigation or insurance advice, please do not hesitate to contact one of our experienced litigation solicitors on 9963 9800 or via email at

The team at Etheringtons would also like to extend our heartfelt sympathies to all those affected by the recent bushfires and commend the hard work and sacrifice by the fire fighters.

5 Costs to Factor in When Buying a Home

5 Costs to Factor in When Buying a Home


If you are currently in the process of buying, looking or saving for a house, there are extra costs beyond the property’s price tag that you need to know about.

1. Transfer duty (previously known as stamp duty)

When you purchase a property in NSW, you are required to pay transfer duty. This is a tax on property which varies depending on the value of the property. Generally, you will pay more transfer duty if the property you are purchasing is expensive.

2. Pest and building inspections

Before purchasing property, it is recommended that you have pest and building inspections to determine the property’s condition and to avoid problems and extra costs in the long run. These inspections are especially important for older properties. Make sure you appoint a qualified person such as a licensed builder, surveyor or architect.

3. Mortgage registration

You are required to pay a fee to formally register your mortgage in NSW. This mortgage registration payment is required by the state government to register the security for a home loan. This is important as it allows any potential buyers to check claims against the title of your property.

4. Loan application or establishment fee

When you take out a home loan, you may be required to pay an establishment fee. This payment may be required by the bank to pay for the setting up of your home loan. However, some lenders will waive this fee, so it may be worthwhile to ask.

5. Mortgage insurance

If you are borrowing more than 80% of the property value, you may be required to pay ‘Lenders Mortgage Insurance’ (LMI).  The lender’s valuation of the property determines this fee.

Further Information

It is important that buyers are aware of any additional costs which may be required when purchasing a property. If you have any questions or concerns, we can provide additional information and advice to you regarding your situation. If you would like to discuss your concerns with a legal professional please contact us on 9963 9800 or at