Rental law changes to shield tenants during coronavirus

Insights26 Mar 2020

Legislative responses to COVID-19 are reshaping legal norms. On 24 March 2020, NSW followed the lead of the United Kingdom and a range of states in the US by passing legislation enabling a moratorium on lease evictions.

By Maurice Doria

The COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 (NSW) passed both houses of Parliament. Item 2.18 amends the Retail Leases Act 1994 (NSW) to authorise new regulations to be made under the Agricultural Tenancies Act 1990 (NSW), Retail Leases Act 1994 (NSW) and all legislation relating to commercial leases to:

prohibit recovery of possession by a landlord or owner of premises or land;
prohibit lease termination by a landlord or owner of premises or land;
regulate or prevent the exercise or enforcement of another right relating to the land by a landlord or owner of premises or land; and
exempt one or a class of tenants, residents, or lessees from the operation of a provision under the relevant legislation.

Any regulations made under these changes will have two thresholds:

Parliament must be unlikely to sit within 2 weeks after the regulation is made, and
the regulations must be in the Minister’s opinion reasonable to protect the health, safety and welfare of tenants, residents, or lessees.

It is intended that the regulations will expire after 6 months, or earlier if the Parliament decides to repeal them. At the time of writing, new regulations have not yet been announced.

The amendments, however, do not specifically address matters such as reduced trading hours or rent relief. Another national cabinet meeting was held on 25 March 2020 – on the agenda was the possibility of offering some rental relief, however it could be several days until details will be finalised. As such, until there is further clarity, landlords and tenants will need to reach commercial agreement regarding any variation to their lease terms.

It is imperative now more than ever to stay tuned to the workings of Parliament to ensure you know your rights during this tumultuous time.