NSW COVID-19 leasing laws have recently been relaxed in favour of landlords. The recent amendments are advantageous to landlords seeking to recover possession of their properties as they provide greater control over landlords' real-estate. The changes enable landlords to increase rent payable, and in certain circumstances allow them to terminate impacted lessees' tenancies. However, whilst beneficial to landlords, the amendments do provide less protection to tenants experiencing financial hardship as a result of COVID-19.
These amendments have been applied to the Retail and Other Commercial Leases (COVID-19) Regulation 2022.
The new changes came into effect on 14 March 2022 and will be in operation until 30 June 2022, unless extended.
The key changes include:
- For tenants to qualify as impacted lessees, turnover must be under $5 million, as opposed to the previous $50 million thresholds.
- Requirements preventing rent payable under an impacted lease from being increased have now been removed and Landlords can now increase rent owed after 14 March 2022 under an impacted lease.
- Renegotiation is no longer required between landlords and tenants for prescribed breaches that occur after 13 March 2022 such as failure to pay rent. Should the breach not be resolved via mediation, the landlord reserves the right to terminate the lease.
- With reference to Section 15(2), it provides that the National Code of Conduct no longer needs to be considered by courts and tribunals for breaches post 13 March 2022 when considering whether to make a decision or order.
- Renegotiations commenced but no concluded before 30 June 2022 can no longer be continued after the expiry of the prescribed period
All protections relating to rent relief ended on 13 March 2022. Compulsory mediation will be the only remaining requirement under the COVID-19 NSW legislation. It is important to note that rent-relief negotiations are only enforceable within the prescribed period and that tenants impacted by COVID-19 should attempt to take advantage of rent relief provisions prior to 30 June 2022 while they are still available.
We recommend landlords and tenants with any concerns as to how they will be affected by the abovementioned amendments should obtain legal advice as to their rights and obligations.
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