Extension of the Retail and Other Commercial Leases (COVID-19) Regulation to 31 December 2020. Extension of the NSW Regulation for rent relief to tenants
On 23 September 2020, the NSW Government announced the Retail and other Commercial Leases (COVID-19) Regulation (Regulation) will be extended until 31 December 2020.
The Regulation, which was set to expire on 25 October 2020, gives effect to the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles During COVID19. A summary of the Regulation published by Swaab’s Property Team can be accessed here: https://www.swaab.com.au/news/covid-19-retail-and-other-commercial-leases-covid-19-regulation-2020.
The central feature of the Regulation is the proportionality principle of rent relief to tenants according to turnover decline, and this applies for both retail leases and commercial leases. This is targeted at small to medium businesses, as the Regulation applies to a tenant that qualifies for the Job-Keeper scheme and has a turnover of less than $50 million.
Tenants who previously enjoyed rent relief under the Regulation can seek further rent relief for the 25 October to 31 December period, but they will first be required to re-establish their eligibility. Also, a Tenant who did not qualify for relief up to 25 October is able to qualify if the Tenant meets the eligibility criteria during the extended period.
Landlords will also be able to receive up to 25 per cent land tax concession where they provide additional rent relief to commercial and residential tenants suffering financial hardship during this October-December period. This land tax concession is in addition to the concession already provided to Landlords who reduced rent between April-September this year.
For more information about the Regulation and this land tax concession, visit https://www.service.nsw.gov.au/campaign/covid-19-help-small-businesses/commercial-lease-support.
We will provide any further updates to the Regulation as they become available.
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The Swaab property team