COVID-19 Leg­is­la­tion Amend­ment (Emer­gency Mea­sures) Act 2020 (NSW) – RETAIL LEAS­ES ACT 1994 (NSW)

The COVID-19 Leg­is­la­tion Amend­ment (Emer­gency Mea­sures) Bill 2020 (NSW) was passed by both Hous­es of the New South Wales Par­lia­ment on 24 March 2020, which received assent yes­ter­day (Emer­gency Mea­sures Act). Amongst oth­er things, the Emer­gency Mea­sures Act intro­duces a new Part 11 (Response to COVID-19 pan­dem­ic) into the Retail Lease Act 1994 (NSW) (Act).

In addi­tion to the Act, the amend­ment (in Part 11) also applies to Agri­cul­tur­al Ten­an­cies Act 1990, Board­ing Hous­es Act 2012, Res­i­den­tial (Land Lease) Com­mu­ni­ties Act 2013 and any oth­er leg­is­la­tion relat­ing to the leas­ing of premis­es or land for com­mer­cial pur­pos­es. That is to say that the amend­ment also applies to com­mer­cial leas­es. Accord­ing­ly, it is like­ly that the Con­veyanc­ing Act 1919 (NSW) will also be impact­ed to the extent that it deals with restric­tions on, and relief against, for­fei­ture of retail and com­mer­cial leases.

The new Part 11 of the Act has been estab­lished to enact a response to the COVID-19 pan­dem­ic, as it:

  1. pro­hibits the lessor (land­lord) from recov­er­ing pos­ses­sion of premis­es or land from the lessee (ten­ant) in par­tic­u­lar circumstances;
  2. pro­hibits ter­mi­na­tion of a lease by a lessor in par­tic­u­lar circumstances;
  3. reg­u­lates or pre­vents the exer­cise or enforce­ment of anoth­er right of a lessor under the lease or an agree­ment relat­ing to the premis­es in par­tic­u­lar cir­cum­stances; and
  4. exempts a lessee, or a class of lessees, from oper­at­ing a pro­vi­sion of the Act or any agree­ment relat­ing to the leas­ing or licens­ing of the premises.

These reg­u­la­tions can only be made (upon the rec­om­men­da­tion of the Min­is­ter to the Gov­er­nor) in cir­cum­stances where:

  • Par­lia­ment is not sit­ting, and is unlike­ly to sit with­in two weeks after the reg­u­la­tions are made; and 
  • in the Minister’s opin­ion, the reg­u­la­tions are rea­son­able to pro­tect the health, safe­ty and wel­fare of lessees under the Act.

Reg­u­la­tions made under this sec­tion of the Act, expire six months after the reg­u­la­tion com­mences or an ear­li­er date decid­ed by Par­lia­ment (by res­o­lu­tion of either House of Parliament).

Mov­ing for­ward in this cur­rent envi­ron­ment, land­lords should be par­tic­u­lar­ly mind­ful of the amend­ments to both retail and com­mer­cial leas­es dur­ing the COVID-19 pan­dem­ic, when deal­ing with ten­ants and the premis­es. Legal advice should be sought where sit­u­a­tions relat­ing to the pro­vi­sions of the new Part 11 of Act are con­cerned. We are con­sid­er­ing the COVID-19 pan­dem­ic and its impact on our land­lord and ten­ant clients in real time and will con­tin­ue to remain avail­able for you dur­ing this glob­al crisis.