Good news for NSW commercial and retail tenants!
The NSW State Government finally introduced the Retail and Other Commercial Leases (Covid-19) Regulation 2020 ('Covid-19 Regulation') on 24 April 2020.
The COVID-19 Regulation protects "impacted lessees" from any "prescribed action" by landlords for failure by the impacted lessee to pay rent, to pay outgoings or to open for business for all hours prescribed by the lease, as a direct result of the economic impact of COVID-19 restrictions, during the period commencing 24 April 2020 and ending on 24 October 2020.
A "prescribed action" includes:
- taking possession
- exercising a right of re-entry
- recovering the premises
- terminating the lease
- recovering the security deposit
- seeking damages.
An "impacted lessee" is a lessee:
- whose turnover was less than $50million for the 2019 financial year
- who is eligible for the Federal Government's Jobkeeper scheme
- who is leasing a commercial or retail premises.
The COVID-19 Regulation only applies to leases which commenced prior to 24 April 2020. However, it does apply to leases that commenced on or after 24 April 2020 where that lease is an option to renew an existing lease which commenced prior to 24 April 2020.
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.