Written by The Retail and Other Commercial Leases (COVID-19) Regulation was amended for the third time this year on 24 September 2021, with a slight change to eligibility requirements. Previously tenants needed to qualify for specific NSW Government grants to be an ‘impacted lessee’ and tenants who received a ‘Commonwealth COVID-19 Disaster Payment’ would be excluded from being an impacted lessee. However, with the new amendments, tenants can be impacted if they receive the Commonwealth grant.
s 4, which contains the ‘Meaning of an impacted lease’ states that the lessee will be an impacted lessee if they qualify for one or more of 2021 COVID-19: (i) Micro-business Grant, (ii) Business Grant or (iii) JobSaver Payment, or ‘would qualify but for a COVID-19 Disaster Payment made to the lessee by the Cth.’ More details of the Regulation can be accessed here, as well as the amending legislation.
As the lockdowns ease, a tenant may no longer qualify as an impacted lessee. Landlords can monitor this by issuing fortnightly requests for information that the tenant is an impacted lessee. The amendments allow further renegotiation. Some specific matters relevant for renegotiations include a tenant’s turnover, and landlords are not required to reduce rent for a period when a tenant ceases to be an impacted lessee. It may be a reason to renegotiate if the landlord has previously agreed on ongoing waivers and reductions, but the tenant’s position has improved. In renegotiated positions, landlords can include terms that reduced rent will not apply while a tenant is not an impacted lessee.
The amendments pre-empt better retail trade, in anticipation for the end of COVID restrictions.