A retailer in a Perth shopping centre has been slapped with a rent hike of $400 a month despite new tenancy laws rolled out during the pandemic banning landlords from putting fees up.
Invoices obtained by WAtoday show rent for a fast food outlet at Belmont Forum was increased by nearly $100 a week in June, despite the business reporting a drop in turnover of more than 50 per cent in the last few months.
The owner of the food court outlet, who asked that her name not be published for fear of repercussions, said the increase was threatening to bleed the business dry.
She said the outlet, which is part of a franchise, had requested rent relief from management after being forced to shut by COVID-19 restrictions, but all calls for help had gone unanswered.
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With only one employee eligible for the federal government’s JobKeeper wage subsidy, the owner said she was working around the clock to make ends meet when the rent increase hit last week.
“My partner and I haven’t taken a day off for three months now, working around the clock so we can keep the store running as we were unable to afford to hire or retain any staff,” she said.
“If the situation continues I would have to give up our business once the lease ends as there’s no point doing it anymore.
“I feel desperate.”
She said 30 per cent of their revenue went towards rent, with the remaining covering operating costs, payroll and franchise fees. With little wiggle room left, she said the additional $435 a month in rent could be the tipping point.
New commercial tenancy laws passed by the West Australian Parliament in April prohibit landlords from increasing rent until September 29 and restrict penalties for tenants reducing trading hours.
According to the government, the aim of the legislation is to help small commercial tenants in financial distress to survive the economic downturn due to restrictions imposed to combat coronavirus.
Consumer Protection director of legislation and policy Penny Lipscombe said rents could only be increased if there had been an increase in turnover, which seemed unlikely in this case since the business was eligible for the JobKeeper subsidy.
“If the tenant meets the definition of holding a small commercial lease in the Act a rent increase is prohibited during the emergency period,” she said.
“The tenant could raise this with the Small Business Development Corporation.”
When asked about the rent increase, Belmont Forum owner Perron Group said the company had been working closely with management to ensure all tenancies complied with the regulations.
“As the regulations have only been in place for a short period of time, and the centre is made up of more than 140 traders, we are still in the process of completing negotiations with all tenants,” a spokesman said.
“Our priority has always been to ensure that traders are treated fairly and consistent with the regulations and would urge any tenant with concerns to contact the centre management team immediately.”
The spokesman said circumstances varied from trader to trader, with some businesses more harshly impacted by COVID-19 than others, but he said all business owners who met the criteria set down in the regulations would be assisted appropriately.
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