NSW Commercial Leases During COVID

NSW Commercial Leases During COVID

Are you an eligible tenant? How can you seek relief?

As a commercial tenant in New South Wales, if you are doing your best to survive lockdowns, restrictions and the reduced ability to operate your business successfully, you should ensure you understand the relief available to you. Support is available to you under the most recent Regulations (Retail and Other Commercial Leases (COVID-19) Regulation 2021) – known as the ‘2021 Regulations’.

For a six-month period (13 July 2021 to 13 January 2022), commercial and retail property owners cannot take certain actions against an eligible tenant (for example evict you) unless you and the Landlord have first renegotiated rent and attempted mediation. Any negotiations must take place ‘in good faith’ and in line with principles in the National Cabinet’s Code of Conduct.

To be an ‘eligible tenant’, your lease must have commenced before 26 June 2021 (including any option commencing before 26 June 2021) and certain criteria need to be met:

  1. You must qualify for at least one of the Micro-business COVID-19 Support Grants. This requires you to:
    • have a turnover of between $30,000 and $75,000; and
    • have suffered a decline in revenue of 30% or more; and
    • operate a business that provides the primary income for a person associated with its business;

OR

  1. Qualify for the COVID-19 NSW Business Grant. This requires you to:
    • have an active Australian Business Number;
    • demonstrate that your business was operating in NSW as of 1 June 2021;
    • have had total annual Australian wages of $10 million or less as of 1 June 2021;
    • have an aggregated annual turnover of between $75,000 and $50 million for the year ended 30 June 2020;
    • have business costs for which there is no other government support available; and
    • maintain your employee headcount as of 13 July 2021;

OR

  1. Qualify for the Job Saver Payment, which requires you to:
    • have a turnover of between $75,000 and $50 million; and
    • have suffered a decline in revenue of 30% or more; and

In addition, you must remain committed to the terms of the Lease or any terms which have been amended.

Among the principles, which may be of most importance to you, is that your Landlord cannot (without agreement reached):

  • Evict you for non-payment of rent or outgoings.
  • Evict you if your business is not open during the hours specified in the Lease.
  • Recover a security bond or bank guarantee for non-payment of rent or outgoings.
  • Increase your rent.
  • Charge interest or fees on any unpaid rent.

Should you and your Landlord be unable to reach a resolution, your matter will be referred for Mediation with the Office of the Small Business Commissioner and further information can be found here.

Further information can be obtained when you contact our office.