How COVID-19 Affects Your Lease
On 14 July 2021, the NSW government implemented new emergency measures to provide protections for tenants experiencing financial hardship. The new law, Retail and Other Commercial Leases (COVID-19) Regulation 2021, applies to retail and commercial leases entered into before 26 June 2021.
The laws prohibit landlords from taking certain action against tenants impacted by COVID-19 (“impacted lessees”) for breaches during the period from 13 July 2021 to 20 August 2021. A breach can include failure to pay rent or outgoings and not trading during the hours specified in the lease.
A tenant is an “impacted lessee” where:
a. The lessee qualifies for a Micro-business COVID-19 Support Grant, a COVID-19 NSW Business Grant, and/or the Job Saver Grant; and
b. The turnover in the 2020–2021 financial year was less than $50 million.
A tenant bears the burden of proving to the landlord that it is an impacted lessee. Where it is established that a tenant is an impacted lessee, and the impacted lessee has committed a breach, a landlord will not be able to take any action until the issue has been mediated with the Small Business Commissioner.
Until a mediation occurs, landlords will be prohibited from taking any action such as eviction, re-entry, seizure of goods, termination or forfeiture of the lease or taking possession. The landlord will also not be able to require a payment of interest or impose a fee or charge on unpaid rent otherwise payable by the lessee.
However, a landlord and tenant can still come to their own agreement during this period, which can include an agreement that the landlord will be able to take any of the previously mentioned action.
This time, landlords are not obliged to apply for the rental waiver and deferral process which was in place in 2020.
If you have further questions about how these laws apply to your lease, contact us on 9589 6666 or write to Jonathon Prowse at email@example.com.