Certain COVID-19 related arrangements for retail leases have been made permanent.
The COVID-19 and Other Legislation Amendment (Regulatory Reforms) Act 2022 No 5 preserves temporary protections for certain lessees impacted by COVID-19. This is achieved by inserting a savings provision, s 88(1A), into the Retail Leases Act 1994. This has the effect of retaining the relevant provisions of the Retail and Other Commercial Leases (COVID-19) Regulation 2022 even though it is to be otherwise automatically repealed on 14 July 2022.
The COVID-19 protections in question include:
- Landlords cannot act against an impacted lessee failing to pay rent, failing to pay outgoings, or not being open for business during the hours required under the lease;
- Rents cannot be increased, except for parts of rents that are calculated based on turnover;
- Any breaches of a lease which are caused by the tenants’ compliance with Commonwealth or State COVID-19 laws are excused;
- An obligation on both parties to retail leases to renegotiate in good faith the rent payable under the lease, based on the economic impacts of COVID-19.
The protections reflect those of the National Code of Conduct’s leasing principles. Impacted lessees are generally those who have received government assistance during COVID-19.
The amending Act also creates a new s 89, generally empowering creation of savings or transitional regulations on leases in response to COVID-19.
The commentary in the By Lawyers Leases guide and the relevant section of the 1001 Conveyancing Answers (NSW) publication has been amended to reflect these arrangements, including links to these new sections.