Commercial Leases and COVID-19: The Recovery Phase

Now that we have managed to turn our backs on the horror-show that was 2020 and the effect of COVID-19 is largely under control, focus has now shifted to the economic recovery and returning things to ‘normal’. As part of this the wind back of the stimulus and other measures put in place to soften the impact of the pandemic has begun.  While the phase out of the job keeper and job seeker payments has taken the headlines, the commercial leasing concessions and protections are not unaffected.

NSW Situation

We have written previously on the mandatory code of conduct for tenants and landlords, and the way in which that code was implemented.  You can find more about the NSW implementation of the Code here: https://bedfordslegal.com.au/2020/04/29/commercial-leases-and-covid-19-nsw-update/.

The NSW concessions and protections had been due to expire on 31 December 2020, however, they have been further extended through to 28 March 2021 for eligible lessees.  This is the second extension of the protections, and takes into account the recent eligibility changes to the job keeper scheme in determining eligibility.

If you want to read the regulation in full, it can be found on the NSW Legislation website at: https://www.legislation.nsw.gov.au/view/pdf/asmade/sl-2020-751

ACT Situation

In the ACT however there has been no such extension, and the protections afforded by the ACT implementation of the code came to an end on 31 January 2021.  As a result, while landlords are still required to negotiate in good faith with tenants in relation to prescribed breaches that occurred while the protections were still in force, any breaches after that date will be outside the scope of those protections.

For example, if a tenant fails to pay rent or meet other obligations after 31 January 2021, the landlord is not required to engage in good faith negotiations as defined in the code before seeking to terminate the lease or take other action.

While the ACT Government is still encouraging tenants and landlords to continue working together in relation to any such issues after 31 January 2021, tenants no longer have any means to force these negotiations.

If you have further questions or are uncertain about your lease at this time, please contact us ‑ we are here to help.