Landlords and tenants have been eagerly awaiting guidance from the Government on how to deal with their tenancy issues as a result of the COVID-19 crisis.
On Saturday, 25 April 2020, the NSW Treasurer Dominic Perrottet and NSW Minister for Finance & Small Business, Damien Tudehope, confirmed new regulations published in New South Wales will give immediate effect to the NSW Government’s COVID-19 rental relief measures, endorsing the Federal Government’s National Cabinet’s Code of Conduct released on 7 April 2020.
The Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) (the Regulation) is made under the Retail Leases Act 1994 (NSW) and the Conveyancing Act 1919 (NSW). The amendments to the Conveyancing Act 1919 (NSW) amend the Amendment of Conveyancing (General) Regulation 2018 (NSW) in order to capture relevant non-retail commercial leases.
The Regulation is stated to be in effect for 6 months from 24 April 2020 and provides that it is repealed on 25 October 2020.
The NSW Government released the Regulation to give effect to the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID‑19 (the Code) adopted by the National Cabinet on 7 April 2020.
Generally speaking, the Code imposed a set of good faith principles for application to commercial tenancies (including retail, office and industrial) between owners/ operators/ other landlords and tenants. Under the Code, eligible tenants will be entitled to request rent reductions in the form of waivers and deferrals from their landlords. The Code applies to all small‑medium enterprise tenancies that are suffering “financial stress or hardship” (as that term is defined in the Code) as a result of the COVID‑19 pandemic, where the tenant:
- is eligible for the Commonwealth Government’s JobKeeper program; and
- has an annual turnover of up to $50 million.
The NSW Government has put together an informative factsheet and FAQ's with some frequently asked questions relating to the implementation of The Code in NSW.