On 24 April 2020, the NSW Government enacted the Retail and Other Commercial Leases (COVID-19) Regulation 2020 to implement the Lease Code of Conduct.
The Regulation applied for a period of six-months, ending on 24 October 2020.
On 24 October, the NSW Government extended the protections under the Regulation for eligible tenants to 31 December 2020. This extension was enacted via a new regulation - Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020.
“The extension is about ensuring eligible businesses have certainty to trade over the coming months, particularly through the typically busy festive season. This will give businesses an opportunity to build cash reserves needed to support them and help them trade through 2021.”
Some Points to Know
The rent relief requirements and most other provisions remain the same.
- If a tenant has previously agreed to a rent relief arrangement with their landlord, this agreement is not automatically extended until 31 December 2020.
- If a tenant remains eligible under the new regulation, they can make a further request for rent relief before 31 December 2020, providing they are asking to negotiate rent relief for a new time period.
- To make a further request for rent relief, tenants will need to re-establish their eligibility.
Parties to an impacted lease must commence negotiations within 14 days of a request for rent relief, or another timeframe agreed to by both parties.
If a tenant was eligible under the Retail and Other Commercial Leases (COVID-19) Regulation 2020 but is not eligible under the Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020, this will not impact any rent relief they’ve already negotiated.
If a tenant hasn’t asked to negotiate rent before 24 October 2020, they may still ask - but they will need to demonstrate they were eligible under the first Regulation.
And for the Landlords?
Eligible landlords that reduce the rent of tenants between October and December 2020 can apply for a land tax concession of up to 25% on relevant properties.
This concession is in addition to the concession provided to landlords that reduced rent before 30 September 2020.
If you have a query relating to any of the information in this article, or you would like to speak with someone in Holman Webb’s Property Group, please don’t hesitate to get in touch today.