Commercial and Residential Leasing relief: COVID-19 2021

Residential Leases

On 14 July 2021, the NSW Government enacted the Residential Tenancies (Covid-19 Pandemic Emergency Response) Amendment Regulation 2021 (the Regulation). The Regulation protects impacted tenants, who meet the criteria below, from termination of their residential tenancy agreement or recovery of possession of the premises. If you are an impacted tenant, and you give your landlord notice that you are an impacted tenant, and you continue to pay at least 25% of the rent payable under your lease, you are exempt from the parts of the Residential Tenancies Act 2010 that could result in your lease being terminated from 14 July 2021 until 11 September 2021.

An impacted tenant is a member of a household affected by COVID-19. A household impacted by COVID-19 is if any 1 or more rent-paying members of the household have:

1. Lost employment or income as a result of the impact of the COVID-19 pandemic, or
2. Had a reduction in work hours or income as a result of the impact of the COVID-19 pandemic, or
3. Had to stop working or materially reduce the member’s work hours, because of
   • the member’s illness with COVID-19, or
   • another member of the household’s illness with COVID-19, or
   • the member’s carer responsibilities for a family member ill with COVID-19

and as a result of the above, the weekly household income has been reduced by at least 25% compared to the average weekly household income for the 4 weeks immediately preceding 26 June 2021.

Commercial Leases

On 14 July 2021, the NSW Government enacted the Retail and Other Commercial Leases (COVID-19) Regulation 2021 (the Regulation). The Regulation introduces temporary measures to limit lessor’s being able to exercise particular rights if the lessee is an impacted lessee for commercial leases entered into before 26 June 2021 (excluding leases entered by option to extend or renew).

In summary the Regulation protects impacted lessees from lessors taking prescribed actions for prescribed breaches that occur between 13 July 2021 and 20 August 2021. If you are an impacted lessee, meaning you meet the criteria below, and you breach your lease through one of the prescribed ways below, you must give the lessor the following information as soon as practicable after the breach or request of the lessor:

1. A statement that you are an impacted lessee; and
2. Evidence that you are an impacted lessee.

A lessor is not able to take a prescribed action against the impacted lessee unless the matter has been referred for mediation under the Act, Part 8, Division 2, and the Registrar has certified in writing that the mediation has failed to resolve the dispute.

A lessee is an impacted lessee if:

1. They qualify for 1 or more of the following grants:
   • Micro-business COVID-19 Support Grant;
   • COVID-19 NSW Business Grant; or
   • Job Saver Grant, and
2. The following turnover in the 2020-2021 financial year was less than $50 million
   • if the lessee is a franchisee – the turnover of the business conducted at the premises or land concerned,
   • if the lessee is a corporations that is a member of a group – the turnover of the group,
   • in any other case – the turnover of the business conducted by the lessee.

A lessor must not take a prescribed action, during the prescribed period, 13 July 2021 and 20 August 2021, against an impacted lessee for a prescribed breach. A prescribed action includes:

1. eviction of the lessee from premises or land subject of the commercial lease;
2. exercising a right of re-entry to premises or land the subject of the commercial lease;
3. recovery of the premises or land;
4. distraint of goods;
5. forfeiture;
6. damages;
7. requiring a payment of interest on, or a fee or charge related to, unpaid rent otherwise payable by a lessee;
8. recovery of the whole or part of a security bond under the commercial lease;
9. possession;
10. termination of the commercial lease;
11. any other remedy otherwise available to a lessor against a lessee at common law or under the law of this State.

A prescribed breach includes

1. failure to pay rent; or
2. a failure to pay outgoings; or
3. the business operating under the lease not being open for business during the hours specified in the lease.