Thinking | 24 September 2020

NSW Government extends COVID-19 commercial tenancy regulation to end of 2020

By Kitty Vo and Maurice Doria 

The NSW Government has recently announced that the Retail and Other Commercial Leases (COVID-19) Regulation (COVID Regulation) will be extended until 31 December 2020. The COVID Regulation, which is due to expire on 25 October 2020, was passed earlier this year to assist commercial landlords and tenants in NSW to negotiate rent relief deals within the framework set out under the Federal Government’s National Mandatory Code of Conduct for commercial tenancies. Please refer to our original article here, which summarises the NSW legislation.

As part of the recent announcement, landlords will also be entitled to receive up to 25% land tax concession where landlords provide rent relief to tenants in financial distress from October to December 2020. A copy of the NSW Government’s media release can be viewed here.

However, the extension of the COVID-19 Regulation does not mean that current arrangements between landlords and tenants are automatically extended. Where existing rent relief deals between landlords and tenants are due to end in October 2020 and the tenant wishes to seek further rent relief, the tenant must sit down with their landlords to negotiate and re-establish their eligibility for rent relief for the extended period. Landlords are also obliged to respond to a tenant’s request within a reasonable time frame.

Although other States and Territories have also extended expiry dates of the various COVID-19 commercial tenancy legislation recently, as different legislation apply in each Australian jurisdiction it is necessary to check the specific expiry dates for the jurisdiction that your commercial or retail premises is located.

In related news, the Supreme Court of NSW recently considered the impact of COVID-19 on a retail lease in the context of relief against forfeiture and clarification regarding how the COVID-19 regime works in practice. The judgments in the Sneakerboy case were examined by our Litigation & Dispute Resolution team here

 

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