The Retail and Other Commercial Leases (COVID-19) Regulation 2020  (Regulation) was amended on 3 July by the Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020  (Amendment Regulation). You can read our update on the Regulation, written when the Regulation was initially released in April 2020, here.

The obligation to renegotiate rent and other terms - changes to clause

The main change to the Regulation introduced by the Amendment Regulation is to the clause which sets out the obligation to renegotiate rent and other terms of commercial leases before the lessor can take a prescribed action (clause 7 of the regulation made under the Retail Leases Act 1994;  clause 5 of schedule 5 of the amendment of the Conveyancing (General) Regulation 2018).

The Amendment Regulation has clarified that the clause only applies to a lease to which an impacted lessee is a party.

Further, new sub clauses now provide that an impacted lessee must give a statement to the lessor that the lessee is an impacted lessee and provide supporting evidence. If the impacted lessee fails to do so, the lessor is taken to have complied with the clause.

Relevance of change

The statement that the lessor will be taken to have complied with the clause is relevant due to clause 7(1) (of the regulation made under the Retail Leases Act 1994),  which states that a lessor must not take any prescribed action against an impacted lessee due to a failure to pay rent during the prescribed period unless the lessor has complied with the clause. Therefore, this amendment makes clear that if a lessee has failed to provide sufficient proof that they are an impacted lessee, the lessor has complied with clause 7 and is permitted to take prescribed actions during the prescribed period.

The changes apply only to negotiations which have not yet completed, and do not extend to matters for which court or Tribunal proceedings are underway.

Duane Keighran Emma Croskery
Leasing - commercial and retail
Colin Biggers & Paisley

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.