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ABC News
Health
By Jacob Kagi

Rent relief helped when COVID-19 shut Luna Cinemas, but now that's due to end

Ingrid van den Berghe accepts rent needs to go back to normal.

When the pandemic forced iconic Perth movie haven Luna Cinemas to shut its doors in March, managing director Ingrid van den Berghe feared the closure might be permanent.

"I actually thought we would not open again," she said.

"It was awful … we did not know if our business could survive the lockdown."

But nearly two months ago, after the easing of restrictions, the arthouse theatre in Leederville did reopen — and trade has now returned to about 60 per cent of usual levels.

The Federal Government's JobKeeper program and other COVID-19 economic support measures helped significantly, while rent relief offered by landlords through a mandatory code of conduct was crucial.

"It gave us a way forward to negotiate with the landlords, a very clear way of moving forward," Ms van den Berghe said.

"I am really grateful, it helped enormously."

Little clarity about next step

The code of conduct, put in place by the State Government to help businesses that were either forced to close or saw their trade plummet, required landlords to offer rent relief to affected tenants.

Any tenant which had lost more than 30 per cent of its usual revenue was required to be offered rent relief, proportional to that income drop.

Now the clock is ticking on that program — with little clarity about what will come next.

The temporary code — described as an extraordinary measure in the face of unprecedented lockdowns — is due to expire on September 29, and the State Government is yet to decide what to do next.

Premier Mark McGowan said there were three options: continue the arrangement, abolish it, or come up with "a far more nuanced" scheme.

Landlords 'can't shoulder burden forever'

According to the Property Council, the time has come to abandon those rules.

"Landlords have been pleased to stand up to the request by government to share the financial risk," Property Council executive director Sandra Brewer said.

"But their ability to do that forever is not possible."

Ms Brewer said landlords had been left to shoulder an excessive amount of the financial burden of the pandemic through mandatory rent relief to commercial tenants.

The industry has also been frustrated by a land tax concession scheme that has seen little take-up.

"Commercial property owners are telling us they do not have deep pockets to continue to provide support, especially in an environment where the WA economy is recovering so well," she said.

Ms Brewer said once the code expired, landlords would continue to work with tenants who needed assistance — pointing to the relatively low number of disputes registered over rent relief during the pandemic.

Door to ongoing assistance left open

But Mr McGowan indicated rent assistance could continue in some form, saying some businesses still needed help.

"There are some tenants out there that are still in a state of great hardship," he said.

"Balancing the fact there are a lot of tenants who are back on their feet … whereas other businesses are still suffering enormously, so we have got to find a balance in all those things."

Cabinet has not decided whether the code would be extended, changed or abolished — but Mr McGowan said an announcement would be made soon.

He said the Government would proceed with an option that was "workable and appropriate for the times".

Tenants thankful for support

Luna Cinemas is one of scores of businesses whose rent is set to return to pre-pandemic levels within weeks.

Trade is still 40 per cent down, but Ms van den Berghe said she accepted rent needed to go back to normal.

Part of the reason she is comfortable with that is knowing the mandatory code could return if a fresh COVID-19 outbreak forced another shutdown.

"If we have the unfortunate situation like New Zealand did and have to lock down, [we] can go back to the template and start talking again," Ms van den Berghe said.

"It shows we have got a way to move forward if the business wants to come out the other side."

For now, Ms van den Berghe is relieved to be trading again — and thankful for help from governments and landlords.

"We have seen a lot of enthusiasm about coming back to the movies, which is terrific," she said.

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