NSW businesses and small commercial or retail landlords will soon receive support after the state government reintroduced the mandatory Code of Conduct for Commercial Leasing.
Along with the re-introduction to mandate rent relief for eligible tenants impacted by COVID-19, the government will also establish a new $40 million hardship fund 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.
Minister for Finance and Small Business Damien Tudehope said the Retail and Other Commercial Leases (COVID-19) Regulation 2021 would be extended until 13 January 2022 providing protection for small businesses such as cafes, restaurants, hair salons and gyms for six months.
“We have always encouraged landlords and tenants to come to the table and negotiate, but now we are going one step further by mandating the minimum relief that landlords need to provide impacted tenants,” Tudehope said.
The Retail and Other Commercial Leases Regulation (COVID-19) Regulation 2021 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% 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.
Eligible commercial landowners are able to apply for up to 100% 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 Australian Retail Association has welcomed the announcement, CEO Paul Zahra said this vital measure will protect small businesses.
“We know this will make a world of difference for so many small businesses as they battle through the intensity of extended lockdowns, and this will also provide a framework for negotiation for businesses of all sizes.
“Rents are the biggest issue for retailers suffering the current lockdown in NSW, and many are scrambling trying to keep their businesses alive with mounting costs and little or no money coming through the door,” Zahra said.
