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In light of the 13 August 2021 Public Health Orders for New South Wales, critical changes were made to the regulations passed by the NSW Government on 14 July. The changes to the regulations have been made as a result of the challenges posed by the increasing impact of the pandemic.
As with the recent changes to regulations, landlords are still restrained from taking action – including eviction - if an impacted lessee (tenant) breaches a retail or commercial lease for reasons related to the impacts of COVID-19. This most recent change allows for renegotiations on the terms of the lease, including rent. Be aware that only impacted lessees are covered and the definition of an impacted lessee is below. Watch our on-demand webinar to understand the changes in more detail.
Let’s explore the matters you should consider in relation to the new regulation on renegotiation.
Firstly: it is important to note that not all breaches are protected, only breaches that
Secondly: a landlord can't increase the rent of an impacted lessee (tenant) during the prescribed period.
Thirdly: to prevent a landlord from taking action, the tenant must initiate the process by giving the landlord notice that they will be breaching the lease (or within a 'reasonable time' after breaching the lease) and provide the landlord with documentation that proves they qualify as an impacted lessee.
Fourthly: once the notice and documentation are given, the landlord can't take action unless and until:
Fifthly: landlords can seek separate relief if they provide rent relief to an impacted lessee including land tax relief and NSW Government grants.
The new regulation only applies to lessees (tenants) 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:
It is important to note this information does not represent legal advice and you should seek specific legal advice for your circumstances. We recommend Australian Business Lawyers & Advisors to help find solutions and minimise risks to your business.
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