NSW Government will reintroduce the National Cabinet’s Mandatory Code of Conduct for Commercial Leasing in NSW until 13 January 2022 mandating rent relief for eligible tenants impacted by Covid-19.
A new $40 million Hardship Fund will also be established to provide a monthly grant of up to $3,000 for small commercial or retail landlords who provide rental waivers of at least the value of the grant and any land tax relief they are eligible for.
‘The Retail and Other Commercial Leases (Covid-19) Amendment Regulation 2021 (Regulation)’, a new set of regulations that has been introduced and will amend the previous set of regulations will include the following:
- Impacted lessee’s can request to renegotiate the rent payable under a lease whilst taking into consideration the economic impacts of the COVID-19 pandemic and the leasing principles set out in the National Code of Conduct.
- The National Code of Conduct is unaltered from the Code introduced in April 2020, and includes obligations on landlords to provide rent relief proportionate to the decline in turnover for the impacted lessee in the form of a 50% waiver and 50% deferral (a link to our previous summary of the National Code of Conduct is available here).
- Impacted lessees must provide evidence that they are an impacted lessee (within the meaning of the Regulation), which must be given within a reasonable time after it is requested by the landlord.
- Compulsory mediation is required prior to a landlord being able to make certain enforcement actions under a lease, including evictions and drawing down on security deposits.
This Regulation is applicable to commercial and retail tenants with a turnover of up to $50 million who are able to apply for the COVID-19 Microbusiness grant, COVID-19 Business Grant or JobSaver Payment.
Eligible landlords will also be entitled to apply for relief for up to 100% of their 2021 land tax liabilty. However, landlords 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.
If you need any assistance in relation to this or any of the current COVID related grants and support, please contact our office to discuss your eligibility and application options.