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Commercial landlords and tenants: Changes to deal with rent stress Posted on August 10, 2021

commercial property

On 14 July 2021, the NSW Government changed legislation to support businesses that are financially impacted by the current public health restrictions, and to maximise the businesses that can resume normal operation as soon as this is over and restrictions lift.

Landlords are prevented from taking any prescribed action against an impacted business for a breach of a lease occurring during the prescribed period of 13 July to 20 August 2021, unless they have attempted mediation.

This means that the landlord is NOT permitted to evict the tenant, exercise a right of re-entry to the premises, recover the premises, recover a security bond or terminate the lease.

Commercial or retail tenants will be protected if they have an annual turnover of up to $50 million and are eligible for the Micro-business COVID-19 Support Grant, the COVID-19 NSW Business Grant and/or the Job Saver Grant. 

If there is a breach of the lease, an impacted lessee must provide a statement and evidence that the lessee has been financially impacted, and by how much.

Commercial lessors (landlords) that provide rent relief to eligible tenants will be entitled to land tax relief of equivalent value, up to a maximum of 100 per cent of their land tax liability for 2021 on the relevant property. 

Landlords will receive a waiver on land tax if they are yet to pay, or a rebate of previously paid land tax. Landlords that receive this tax concession will also be able to defer their remaining land tax payments for three months. 

Landlords MUST seek mediation before taking action. This is available through the NSW Small Business Commissioner and is a confidential and cost-effective way to resolve a disagreement that you can’t resolve by yourself.

Mediation helps parties to find settlement options that they can both accept, without having to go to court. The mediator will speak to the parties privately, as well as altogether via remote technology, to help explore all available options and try to find the best one that will work for all.

If you have experienced or anticipate a breach of a commercial lease from either side, please contact us for support to achieve the best outcomes for you during and post COVID-19: [email protected]

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