The NSW Government will re-introduce the Mandatory Code of Conduct for Commercial Leasing to mandate rent relief for eligible tenants impacted by COVID-19.
A Hardship Fund comprising $40million of grants will also be established to provide individual grants of up to $3,000 for certain commercial or retail landlords who provide rent waivers to their tenants of at least the value of the grant and any land tax relief that the landlord is eligible for under other measures.
The new enabling Regulation will remain in place until 13 January 2022 and landlords will be required to negotiate rent relief having regard to the Mandatory Code of Conduct. That Code requires landlords to provide rent relief in proportion to their tenant's decline in turnover. At least 50% of the relief granted must be in the form of rental waivers, and the balance can be by way of a deferral of rent.
The Regulation applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the NSW COVID-19 Microbusiness grant, the COVID-19 Business Grant or the JobSaver Payment. The previous iteration of the Regulation applied to commercial or retail tenants who were eligible for the now-closed JobKeeper grant.
Landlords affected will be prohibited from evicting or locking out a tenant for certain breaches of the lease unless they have first renegotiated rent and attempted mediation in accordance with the Coode of Conduct.
The office of the Small Business Commission has received additional funding to provide more staff to meet the demand for mediations and to assist retail and commercial tenants and landlords to negotiate new payment terms during the current outbreak of COVID-19.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.