Rental Relief for Businesses During COVID13-09-2021 | Resource | Brent Jones
When the NSW Government’s Retail and Other Commercial Leases (COVID-19) Regulation 2021 was first implemented in July 2021, commercial landlords were encouraged to try and negotiate rental relief with tenants who were suffering business losses because of the lockdown.
Additional amendments to the Regulations were passed in August that allow even greater protections for commercial tenants as the NSW Government tries to limit the long-term economic damage of the lockdown in Greater Sydney. This is particularly good news for the designated LGAs of concern, including some suburbs of Penrith, and the Commercial team at Lamrocks is available to provide additional information.
Is your business eligible for rent relief?
To be eligible for rent relief, a business must have a turnover of less than $50million and be eligible for either the 2021 COVID-19 Micro-business Grant, the 2021 COVID-19 Business Grant, or the 2021 JobSaver Payment.
If your business falls under these categories, your landlord is required to offer rent relief proportionate to your decline in turnover. For example, if your turnover has dropped by 40% and you are suffering financial distress due to the lockdown, then your landlord should provide 40% rental relief.
The rent relief can take the form of waivers during the lockdown period and rental deferrals, with waivers to make up at least 50% of any relief provided. Deferrals can make up the remaining relief package and these can be paid back over the balance of the lease period, or for a period of no less than 24 months (whichever is greater). The overall rental relief and the proportion of waivers to deferrals should also consider the owner’s financial situation.
What are the first steps in renegotiating rental agreements?
In any form of commercial negotiation, it is important to remain calm and reasonable. Businesses around Greater Sydney are under considerable stress during the current lockdown and owners are feeling the pressure. If you are a commercial tenant experiencing financial difficulties, or you are a commercial landlord who has received a request for rental relief, the experienced team at Lamrocks Solicitors can provide advice and negotiate on your behalf to ensure you achieve the best possible outcome in a timely manner.
We can also provide advice and assistance regarding any additional COVID relief measures or protections that might be available and help to ensure your business is in the best shape possible when the lockdown is lifted.
The period covered under the Regulation ends on 13 January 2022 so it is very important for tenants who are experiencing financial distress to commence negotiations with their landlord/property owner as soon as possible. Once a request to negotiate rental relief has been made by a tenant, the landlord must respond within 14 days of receiving the request (unless a different deadline is agreed to by both parties).
For more information contact Brent Jones at Lamrocks Solicitors on 02 4731 5688.