Commercial landlords in NSW are now required by law to provide rental relief to tenants with an annual turnover of up to $50 million following a legislative overhaul pushed through by the state government late last week.
Information for Commercial Landlords
The NSW Govt has amended the Retail and Other Commercial Leases (COVID-19) Regulation 2021 by reintroducing the Commercial Leasing Code of Conduct. You may be familiar with this Code of Conduct from last year. It now applies from 13 August 2021 through to 13 January 2022.
Eligible tenants include those with annual turnovers of up to $50 million and who are eligible for one of the COVID-19 support payments (ie have suffered at least a 30% reduction in turnover). Landlords must provide rent relief to their tenants in proportion to the tenant’s decline in turnover. The relief must be at least half waiver and the balance a deferral. Tenants must provide documents to their landlord substantiating their reduction in turnover.
The Regulation does not cover new leases entered into after 26 June 2021.
For an initial six months, tenants are protected from being locked out or evicted without first renegotiating rent and attempting mediation. Commercial landlords can still terminate a lease and evict a tenant for reasons unrelated to COVID-19.
The Retail and Other Commercial Leases (COVID-19) Regulation 2021 can be found on the Legislation NSW website.
Assistance to Commercial landlords - Land tax relief
Applications for land tax relief can be made to Revenue NSW for up to 100% of an eligible landlord’s 2021 land tax liability. The landlord must have provided the tenant rent relief of at least the amount of the land tax claimed.
Small commercial or retail landlords may also be eligible for a monthly grant of up to $3,000 if they provide their tenants rental waivers of at least the value of the grant and any land tax relief they are eligible for.
Please monitor the Service NSW website for more updates on this.
Information for Residential landlords
Landlords and tenants are encouraged to work together during this challenging time.
COVID-19 effected eligible residential tenants are protected from eviction for rent arrears until 11 September 2021. A landlord may continue to seek a termination for other reasons such as damage to property, sale of property, end of lease, no grounds termination etc.
Assistance to Residential landlords
Eligible residential landlords can apply for grants of up to $3,000 or land tax reductions (but not both) where at least the same amount is passed on to the affected tenant as reduced rent.
For more information:
Looking for more information about providing rental relief to commercial and residential tenants?
For any questions and support, please contact your local RSM adviser.