The NSW Government has announced an extension of six months of the Regulations that were earlier introduced to assist tenants and landlords whose finances have been disadvantaged on account of the COVID-19 pandemic. The Retail and Other Commercial Leases (COVID-19) Regulation was due to expire on 25 October 2020 but will now remain in effect until 31 December 2020. Depending on how the next few months play out, there may or may not be further extensions.
The Regulations provide that landlords who lease premises to an “impacted lessee”, being those who:
- Qualify for the Federal JobKeeper subsidy, meaning that they have experienced at least a 30% reduction in turnover from a relevant comparable period; and
- Had a turnover of less than $50 million in the 2018-19 financial year.
In the event that a tenant fails to pay rent or open for trade in accordance with the lease:
- Evict the tenant.
- Re-enter the premises.
- Recover funds held under a security bond.
- Call on any guarantees given under the lease, or
- Terminate the lease.
Further, except where a tenant's rent payable is based on turnover, landlords cannot increase the rent payable by the tenant, even if a rent review date arrives. A landlord must also pass on any discounts afforded by authorities in respect of statutory charges which are payable in the form of outgoings.
Tenants must re-establish their eligibility for the extension period if they wish to request further rent relief. Landlords must respond to a tenant's request for further relief within a reasonable period of time.
Landlords who grant rent relief in respect of properties for which they are liable for land tax between October and December 2020 can apply to Revenue NSW for a concession on land tax payable for the 2020 land tax year. This new concession is in addition to the concession already provided to landlords who granted rent relief between April and September 2020.
The concession will be applied against any unpaid 2020 land tax and refunds will be issued where the full yearly payment has already been made.
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.