02 Aug COVID-19 2021 Rent Relief Package
Information updated 27 August 2021
Unlike the Codes of Conduct that were brought into existence in 2020 there have been some limited relief packages released by the NSW Government due to the current lockdown in Greater Sydney and New South Wales.
In relation to Residential Tenancies if a Residential Tenant has suffered a loss of income of 25% due to COVID-19 and meets other criteria then the Tenant cannot be evicted during the period from 14 July and at this stage ending on 13 January 2022.
The criteria are that a Tenant needs to show that the rent paying members of the household have lost employment or work hours or had to stop work because members of their household in their care are ill with COVID-19, the take home weekly income is reduced by 25% or more compared to the weekly income received in the 4 weeks prior to 26 June 2021 and they continue to pay at least 25% of the rent payable. The Landlords can obtain a Grant of up to $1,500.00 from the Government based on the amount of any rent reduction passed on to the Tenant.
There are other circumstances in which a Landlord may continue to seek a termination of the Lease including the sale of the premises, illegal use of the premises, damage to property, hardship on behalf of the Landlord or the end of the fixed term of the Lease.
In relation to commercial, industrial and retail tenants a Landlord is entitled to claim a reduction in their Land Tax for the 2021 year, up to 100% of that Land Tax provided the landlord passes on a rental reduction for that amount to a tenant who is experiencing financial distress as a result of COVID-19.
Commercial and retail Landlords are not able to undertake any steps to evict the tenant for non-payment of rent in the event that the tenant has had a decline in turnover of at least 30% during the lockdown and is classified as an “impacted lessee” under the Regulation unless the Landlord and tenant have attempted Mediation in the first instance.
The Landlord is also not able to call upon the Bond or Bank Guarantee for non-payment of rent during the period of the moratorium. The Lessee has to establish that they are an impacted Lessee and in order to do so have to establish to the Landlord that they have qualified for: –
- Micro Business COVID-19 Support Grant;
- COVID-19 NSW Business Grant;
- Job Saver Grant, and
- Their turnover (is less than $250,000,000.00).
On 13 August, 2021 the NSW Government brought in a further rent relief package which is based to a large extent on the Code of Conduct which applied in 2020. An impacted Lessee can request a rent re-negotiation and the principles of the Code of Conduct are to apply. It is up to the lessee to request a rent re-negotiation and if they don’t then there is no basis for claiming rent relief. If the parties don’t reach agreement then Mediation is available.
The moratorium does not apply in relation to any action by a Lessor for non COVID-19 pandemic related reasons (for example where a Lessee has breached the Lease by damaging the premises).
If you require further advice or assistance in relation to these issues please call the Solari & Stock commercial team on 8525 2700 to discuss our appointment option or click here to request an appointment.
Photo by Frosina Polazarevska on Unsplash