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Rent Relief for Tenants of Retail and Commercial Leases

NSW government has amended Retail Leases Act (NSW) 1994 and Conveyancing (General) Regulation (NSW) 2018 to provide rent relief for retail and commercial tenants who have suffered financially due to the current lockdown.

Summary of provisions for rent relief for commercial tenants are as follows:

  • If you are a tenant of a retail or certain commercial property; and
  • Your business qualifies for one or more COVID 19 support packages (ie Micro Business Covid 19 Support Grant, COVID 19 Business Grant or Job Saver Grant); and
  • Your turn-over for 2020/2021 financial year was less than $50 million dollars; and
  • You have breached your lease by not paying rent, not paying outgoings, not being open for business during the prescribed hours under the lease;
  • Then the landlord cannot use most of their rights against you, such as seeking:
  • eviction,
  • termination of the lease,
  • damages,
  • payment from the guarantor of the lease,
  • recovery of whole or part of security bond under the lease.

(This list is not exhaustive – refer to the legislation for the full list please.)

Rights of the landlord

The landlords can still:

  • Take action against the tenant if during the prescribed period, the matter has been referred to mediation under Retail Leases Act NSW 1994 and the Registrar confirms that mediation has failed.
  • Take action against the tenant if the tenant is in breach of the lease due to reason not related to Covid19.
  • Seek a statement that the tenant is an impacted lessee within the meaning of regulation and evidence of same.

The regulation does not apply to leases:

  • Entered into on or after 26 June 2021 (unless it was an exercise of option to renew/extend the lease);
  • Under Agricultural Tenancies Act 1990; or

The prescribed period for this regulation is 13 July 2021 to 20 August 2021.

Rent Relief for Tenants of Residential Leases

If you are an impacted tenant which means:

  • You have lost employment or income due to COVID19;
  • Your work hours or income has been reduced due to COVID19;
  • You had to stop working or materially reduce your work hours due to your illness with COVID19, another household member illness with COVID19, your carer responsibility for another member sick with COVID19.

AND, as a result of any of the above:

  • The weekly income of your household has been reduced by at least 25% when compared to the average weekly household for the 4 week period immediately prior to 26 June 2021.

Then your landlord cannot terminate the lease if you:

  • Give notice to your landlord that you are an impacted tenant under the regulation; and
  • Pay at least 25% of your current rent.

Please note the regulation does not apply to Social Housing Tenancies.

The exemption under rent relief starts on 14 July 2021 and will end on 11 September 2021.

This article does not constitute legal advice and should not be relied as such. For legal queries, please contact us on 02 8014 5818 or email info@checkslaw.com.au.

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commerciallaw,commercialleases

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