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New support for commercial tenants and landlords

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Rent relief will be mandated for eligible tenants and smaller landlords can access a monthly grant

The NSW Government will re-introduce the National Cabinet’s Mandatory Code of Conduct for Commercial Leasing to mandate rent relief for eligible tenants impacted by COVID-19.

A new $40 million Hardship Fund will also be established to provide a monthly grant of up to $3,000 for small commercial or retail landlords who provide rental waivers of at least the value of the grant and any land tax relief they are eligible for.

The Retail and Other Commercial Leases (COVID-19) Regulation 2021  will be extended until 13 January 2022 and will require landlords to renegotiate rent having regard to National Cabinet’s Code of Conduct. The Code of Conduct requires landlords to provide rent relief in proportion with their tenant’s decline in turnover. Of the rent relief provided, at least 50 per cent must be in the form a waiver, and the balance a deferral.

The Regulation applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the COVID-19 Microbusiness grant, COVID-19 Business Grant or JobSaver Payment. It will prohibit a landlord from evicting or locking out a tenant for certain breaches of the lease unless they have first renegotiated rent and attempted mediation.

The NSW Government has also provided funding to the NSW Small Business Commission to provide additional staff to meet the demand for mediation and assist retail and commercial tenants and landlords to discuss discounts or renegotiating rents.

Eligible commercial landowners are able to apply for relief on up to 100 per cent of their land tax liability for 2021. To be eligible, the landowner must have reduced rent for the affected tenant by at least the amount being claimed for any period between 1 July 2021 and 31 December 2021.

The previous Retail and Other Commercial Leases (COVID-19) Regulation 2021 – which required commercial and retail landlords to attempt mediation before locking out or evicting their tenant – was due to expire on 20 August 2021 and has been amended to include these new measures.

More information for landlords and tenants can be found in the Commercial Leases and COVID-19 FAQs.

For information the Hardship Fund, see Commercial Landlord Hardship Fund.

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