In early 2020 as COVID-19 began to impact Australian business, the Federal Government recognized a need to provide some certainty to business in relation to leasing of premises. In April 2020, the Federal Government released the 'National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles During COVID-19'.
The code was adopted by the NSW Government in the Retail and Other Commercial Leases (COVID-19) Regulation 2020. The Regulation required landlords and tenants to negotiate in good faith the operation of their lease, with regard to the principles set out in the Mandatory Code of Conduct. The Regulation was due to expire on 31 December 2020.
On 1 January 2021, the Retail and Other Commercial Leases (COVID-19) Regulation (No 3) 2020 commenced extending the operation of the Mandatory Code in NSW to 28 March 2021. The Regulation now only applies to retail tenants with:
- a turnover of less than $5 million, and
- that qualify for the JobKeeper scheme
Once the Regulations expire on 28 March 2021 retail tenants will no longer have its protection. Landlords will not be required to negotiate any rent relief with their tenants and may terminate leases for unpaid rent. Unfortunately, it is too late for many commercial tenants to take advantage of the relief available under the Regulation if they have not already done so. However, if you are an eligible retail tenant there is still time to negotiate with your landlord.
If you think you may qualify or have any questions, we strongly suggest that you seek legal advice by contacting our team on 1800 650 656. We're here to help!
David Killen | Solicitor