COVID-19 NSW: Business, Non-Profits – Commercial Lease Support

This program aims to support businesses and commercial property owners who are finding it difficult to meet their lease obligations due to the impacts of COVID-19.

From 1 January 2021 to 28 March 2021 (second extension to the Regulation), if eligible under the Retail and Other Commercial Leases (COVID-19) Regulation 2020 ('the Regulation'), the landlord must comply with their obligations under the Regulation to renegotiate the rent if requested, and mediate any disputes. Unless they have complied, they cannot:
- Evict tenants for not paying their rent or outgoings.
- Evict tenants because their business is not open during the core trading hours in their lease.
- Make a claim on a security bond or guarantee for rent or outgoings.
- Increase the rent.
- Charge tenants interest or fees on any unpaid rent.

If eligible under the Regulation, tenants can work with their landlord to renegotiate their rent or other lease terms. They may also be able to reduce their rent in proportion to their reduced turnover.

Half of any rent reduction will be repayable to the landlord later, and if they reduce their rent they may also be eligible for COVID-19 Land Tax relief.

In addition, if the business or commercial property owner is required to contribute towards land tax or any other statutory charge or insurance payable by the landlord, and this outgoing is reduced, they're exempt from paying the reduced amount.

To be eligible to negotiate the terms of their lease under this second extension to the Regulation, the tenant needs to:
- Have a retail shop lease.
- Be eligible for, or receiving JobKeeper, from 4 January 2021, or be able to demonstrate an actual decline in turnover for the 2020 December quarter of at least:
a) 30% .
b) 15% if it’s a not-for-profit business.
- Have had an annual turnover in 2018-2019 under $5 million:
a) Excluding JobKeeper payments.
b) Including other government subsidies such as the NSW small business COVID-19 support grant.

If the landlord/tenant meet the eligibility criteria and they've already negotiated rent relief, they may be eligible to ask to negotiate again before 28 March 2021. That's as long as they're asking to negotiate for a new time period.