Support for Commercial Tenants and Landlords
The NSW Government has implemented further measures to mandate rent relief for eligible commercial tenants impacted by COVID-19. The recently enacted Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2021 (“Regulation”) has re-introduced the principles of the National Cabinet’s Mandatory Code of Conduct (“Code”) which provided much needed assistance to impacted tenants during the lockdown period in 2020.
At this stage, the Regulation will be in force until 13 January 2022.
The amended Regulation now makes specific reference to the Code which mandates landlords to renegotiate rent and provide rent relief in proportion with their tenant’s decline in turnover. The rent relief must be comprised of:
- A minimum 50% waiver; and
- the balance to be deferred (with payment to be amortised over the greater of 24 months or the remaining length of the lease, and payment not to commence prior to the end of the pandemic period or a reasonable subsequent recovery period).
For example, if the monthly rent of a tenant is $10,000 and they have suffered a 100% reduction in turnover, the landlord must provide rent relief in the sum of a $5,000 waiver (50%) and a $5,000 deferral (50%).
The Regulation applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the COVID-19 Microbusiness grant, COVID-19 Business Grant or JobSaver Payment. It will prohibit a landlord from evicting or locking out a tenant for certain breaches of the lease unless they have first renegotiated rent and attempted mediation.
Eligible commercial landlords are able to apply for relief on up to 100 percent of their land tax liability for 2021. To be eligible, the landowner must have reduced rent for the affected tenant by at least the amount being claimed for any period between 1 July 2021 and 31 December 2021
Understanding Your Rights
Navigating the Regulation and Code can be a difficult process. If you need assistance with understanding your rights under the Regulation during these tough and uncertain times, please do not hesitate to contact Marcus Carbone from Southern Waters Legal on 9523 5535.
A copy of the Regulation and Code can be accessed below: