Given the impact of recent Public Health Orders issued for New South Wales, urgent new Regulations have been passed by the NSW Government that will restrain a landlord from taking action (including eviction) against an impacted lessee if the impacted lessee breaches a retail or commercial lease for reasons related to the impacts of the COVID-19 pandemic. There are several matters to consider when a tenant is seeking to rely on the Regulation.
Firstly, the breaches must occur during the prescribed period and this starts 13 July and ends 20 August 2021.
Not all breaches are protected. Only those breaches relating to the economic impacts of the effects of the pandemic (for instance, this would normally include failing to pay rent/outgoings or by failing to open for business). A landlord can still take action for breaches unrelated to the economic impacts of the pandemic or (subject to further confirmation) breaches before the prescribed period.
This new Regulation only applies to lessees who meet the criteria of an ‘impacted lessee’ where:
(a) The lessee qualifies for one or more of the following grants:
(b) The following turnover in the 2020–2021 financial year was less than $50 million:
- Micro-business COVID-19 Support Grant
- COVID-19 NSW Business Grant
- Job Saver Grant.
- if the lessee is a franchisee, the turnover of the business conducted at the premises or land concerned
- if the lessee is a corporation 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 tenant is obligated to provide the landlord soon after any breach occurs, a statement and evidence to support their claim they meet the criteria of an impacted lessee. It is not clear the type of evidence that is needed but this is likely to depend on a case by case situation.
Finally, the landlord can’t take action against an impacted lessee unless they first engage in formal mediation before the Small Business Commissioner. If mediation fails to achieve a solution and the Registrar issues the right certificate confirming the failure, the landlord can then take action.
Australian Business Lawyers & Advisors will continue to monitor the situation. Should you have any questions please get in touch at firstname.lastname@example.org.