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No more COVID-19 relief for commercial tenants in NSW?

Yes, except for certain retail tenants, the temporary COVID-19 relief ended for all commercial tenants in NSW on 31 December 2020.

The relief has only been extended until 28 March 2021 for retail tenants:

  • under retail shop leases (within the meaning of the Retail Leases Act 1994) entered into on or before 24 April 2020;

  • who qualify for the jobkeeper scheme (under the eligibility requirements that apply from 4 January 2021); and

  • whose turnover was less than $5 million in the 2018-2019 financial year.

The above extension took effect on 1 January 2021, pursuant to the Retail and Other Commercial Leases (COVID-19) Regulation (No 3) 2020.

So what are the key provisions of the extended relief for eligible retail tenants?

The following applies to eligible retail tenancies during the period 24 April 2020 to 28 March 2021:

  • No rent increases: landlords cannot increase the rent (other than turnover rent).

  • Landlords must pass on reductions in charges: landlords must pass on to tenants a proportionate amount of any reduction received in the payment of land tax, statutory charges or insurance (if a tenant is required to contribute a fixed amount towards their payment).

  • Landlords must negotiate: landlords cannot take certain prescribed actions against tenants (e.g., terminate a lease, evict a tenant, claim on a security bond, etc.) for not paying rent or outgoings during the period 24 April 2020 to 28 March 2021 unless the landlord firstly enters into “good faith” renegotiations about the rent and any other terms of the lease. Tenants must evidence that they qualify for the relief.

Notwithstanding the above requirements, landlords and tenants are still free to negotiate their own mutual agreements on any matter.

Any agreements reached between landlords and tenants should be formally documented, preferably in a deed of variation of the lease. Bronte Law can assist in documenting any such agreements for eligible retail landlords or tenants.

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