Overview

The New South Wales Government has implemented new regulations for commercial leases in order to assist small businesses experiencing decline in turnover due to the prolonged lockdowns. The Government has effectively reinstated the regulation that it implemented last year, following the first wave of COVID-19 cases and resultant lockdowns (the “2020 Regulation”).

The 2020 Regulation substantially incorporated the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID-19 (“Code of Conduct”).

The new regulation (“2021 Regulation”) is substantially the same as the 2020 Regulation, updating the eligibility criteria for lessees as follows:

• Grants: the lessee must qualify for one of the current New South Wales Government small business grants. These are the 2021 COVID-19 Micro-business Grant, the 2021 COVID-19 Business Grant, or the 2021 JobSaver Payment. (Under the 2020 Regulation, the lessee must have qualified for the commonwealth government’s JobKeeper program that was in place at the time); and
• Turnover: the lessee must have had turnover less than AU$50 million for the 2020-2021 financial year. Under the 2020 Regulation, the turnover base year was financial year 2018-2019.

The 2021 Regulation was initially introduced on July 14, 2021, in a lesser form. Initially, the 2021 Regulation required lessors to attempt mediation with lessees before taking action against the lessee for certain breaches of the lease for a short period of July 13, 2021 to August 20,  2021. However, as COVID-19 cases have significantly risen and lockdowns harshened and extended, the Government has amended the 2021 Regulation to now largely mirror the 2020 Regulation and extend its operation until January 13, 2022.

The 2021 Regulation and the Code of Conduct are summarised and explained here.

Click here (retail leases) and here (non-retail commercial leases) for the 2021 Regulation. Click here for the government grants.