Many SMSF owns a business real property, in which the tenant is often a related party to the SMSF.

As a result of the economic impact of the COVID-19 pandemic and government restrictions imposed causing the widespread and substantial revenue reduction for many Australian businesses, many tenants are seeking rental relief from the landlords.

The below documents are now available for download in the Intello Help Center to assist with documenting the rental relief provided to the related party tenant.


  • Any information expressed in the documents does not purport to be any financial, tax or legal advice as we have not taken into account any of your or your client’s financial or tax objectives that are specific to you or your client’s circumstances.
  • While effort has been taken to make sure the information is as accurate and relevant as possible, it is at best construed as general information only. These documents may not be suitable for all lease situations.
  • You should not rely on the information provided as advice, instead seek your own independent advice from appropriately qualified practitioners or conduct your own research.

Template Tenant Request Letter and SMSF Trustee Minute Templates

The following template letters and resolutions can be downloaded below:

  • Request Letter – From the tenant to the fund seeking the relief
  • Trustee Resolution - Approving the rental relief
  • Confirmation Letter – From the trustee of the Fund to the tenant agreeing with the relief

How to Calculate SMSF Rent Relief for Commercial Tenancies

The Government has introduced a mandatory Code of Conduct for Commercial Tenancies which gives a framework for landlords and tenants to adhere to when determining rent relief.

At a high level, the rent relief amount needs to be calculated based on the reduction in the tenants turnover, for example if the related party business turnover has decreased by 40% due to COVID-19, the landlord should provide:

  • Rental deferral of 20%
  • Rent reduction/waiver of 20%

Any rent deferred can be paid to the landlord of a period of 24 months or more.

The following 14 items are the key points of the Code:

  1. Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period).
  2. Tenants must remain committed to the terms of their lease, subject to any amendments to their rental agreement negotiated under this Code. Material failure to abide by substantive terms of their lease will forfeit any protections provided to the tenant under this Code.
  3. Landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals (as outlined under “definitions,” below) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant’s trade during the COVID-19 pandemic period and a subsequent reasonable recovery period.
  4. Rental waivers must constitute no less than 50% of the total reduction in rent payable under principle #3 above over the COVID-19 pandemic period and should constitute a greater proportion of the total reduction in rent payable in cases where failure to do so would compromise the tenant’s capacity to fulfil their ongoing obligations under the lease agreement. Regard must also be had to the Landlord’s financial ability to provide such additional waivers. Tenants may waive the requirement for a 50% minimum waiver by agreement.
  5. Payment of rental deferrals by the tenant must be amortised over the balance of the lease term and for a period of no less than 24 months, whichever is the greater, unless otherwise agreed by the parties.
  6. Any reduction in statutory charges (e.g. land tax, council rates) or insurance will be passed on to the tenant in the appropriate proportion applicable under the terms of the lease.
  7. A landlord should seek to share any benefit it receives due to deferral of loan payments, provided by a financial institution as part of the Australian Bankers Association’s COVID-19 response, or any other case-by-case deferral of loan repayments offered to other Landlords, with the tenant in a proportionate manner.
  8. Landlords should where appropriate seek to waive recovery of any other expense (or outgoing payable) by a tenant, under lease terms, during the period the tenant is not able to trade. Landlords reserve the right to reduce services as required in such circumstances.
  9. If negotiated arrangements under this Code necessitate repayment, this should occur over an extended period in order to avoid placing an undue financial burden on the tenant. No repayment should commence until the earlier of the COVID-19 pandemic ending (as defined by the Australian Government) or the existing lease expiring, and taking into account a reasonable subsequent recovery period.
  10. No fees, interest or other charges should be applied with respect to rent waived in principles #3 and #4 above and no fees, charges nor punitive interest may be charged on deferrals in principles #3, #4 and #5 above.
  11. Landlords must not draw on a tenant’s security for the non-payment of rent (be this a cash bond, bank guarantee or personal guarantee) during the period of the COVID-19 pandemic and/or a reasonable subsequent recovery period.
  12. The tenant should be provided with an opportunity to extend its lease for an equivalent period of the rent waiver and/or deferral period outlined in item #2 above. 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.
  13. Landlords agree to a freeze on rent increases (except for retail leases based on turnover rent) for the duration of the COVID-19 pandemic and a reasonable subsequent recovery period, notwithstanding any arrangements between the landlord and the tenant.
  14. Landlords may not apply any prohibition on levy any penalties if tenants reduce opening hours or cease to trade due to the COVID-19 pandemic.


State Based Commercial Tenancy Relief Items

The following are also relevant for SMSF who own commercial property and lease to either a related party or third-party tenant:

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