COVID-19 RENT DISUTE: INFORMATION FOR TENANTS

NSW COVID-19 RENT DISPUTE RELIEF EXPLAINED:

On 24 April 2020, the NSW Government released the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) (the NSW Regulation) to give effect to the NSW Government’s COVID-19 rental relief measures, endorsing the Federal Government’s National Cabinet Mandatory Code of Conduct- SME Commercial Leasing Principles during COVID-19 (the Code) released on 7 April 2020. The NSW Regulation applied for six months, ending on 24 October 2020.

On 24 October 2020, the NSW Parliament passed the Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 (NSW) (the Second NSW Regulation) to extend the protections under the NSW Regulation to 31 December 2020.

The Retail and Other Commercial Leases (COVID-19) Regulation (No 3) 2020 (NSW) (the Third NSW Regulation) has now been released extending the NSW’s COVID-19 protections until 28 March 2021. The Third NSW Regulation, effective from 1 January 2021, repeals the NSW Regulation and the Second NSW Regulation.

WHICH REGULATIONS ARE RELEVANT TO ME?  AM I PROTECTED BY THE THIRD NSW REGULATION?

The protections offered by the Third NSW Regulation only extends to retail tenants who meet the eligibility requirements, including, but not limited to being classified as “impacted lessees”.

The NSW Regulation and the Second NSW Regulations potentially apply to retail and commercial tenants- please contact us to discuss your eligibility more extensively.

WHAT PROTECTIONS ARE OFFERED?

Landlords are prohibited from taking “prescribed actions” which include taking enforcement actions during the prescribed period for non-payment of rent, non-payment of outgoings and failure to open for trading. Impacted lessees are also permitted to request to renegotiate the lease.

REQUIREMENT TO NEGOTIATE AND MEDIATE

Impacted lessees and landlords are required to negotiate informally followed by mediation before any legal enforcement action can be taken.

WHAT IF MEDIATION FAILS

Pursuant to the Third NSW Regulation, a Tribunal or Court when considering a decision or order in relation to:-

– the recovery of possession;

– termination of an impacted lease by a lessor; or

– the exercise of any enforcement of another right of a lessor under an impacted lease,

must have regard to the leasing principals set out in the National Code of Conduct.

Harris & Company can advise you in relation to the rent dispute relief and assist you in the negotiations with your landlord.

HOW MUCH WOULD IT COST?

Step 1- Informal Negotiations

–          assisting you with informal negotiations including advice and documenting any agreement would cost approximately $2,000 plus GST (for upto an equivalent of 6 hours of our time);

If the parties are unsuccessful in negotiating a resolution Mediation is the next step in the process

Step 2- Mediation

Making an application for mediation, preparing for and attending at the mediation would cost approximately $3,000 plus GST (for an equivalent of upto 10 hours of our time) exclusive of mediation application costs payable to the Small Business Commissioner.

Step 3 – Where Negotiations and Mediation fail

If negotiations and mediation are unsuccessful and further legal action is being considered, we will discuss costs and strategy at this time.

If you wish to find out whether you meet the eligibility requirements and enter into negotiations with your landlord, please contact us.