Headshot of Clint Coles - Director at Everingham Solomons TamworthWith the recent and unfortunate resurgence of retail lockdowns it’s timely to revisit landlord and tenant obligations in the retail leasing landscape.

On 13 July 2021, the Covid Retail and Other Commercial Leases (Covid 19) Regulation 2021 enacted.

In its original form, it did not require that tenants and landlords renegotiate rent as they were required to through 2020, but instead provided simply that landlords could not take ‘prescribed action’ against tenants unless they had first attempted mediation.

That situation was altered, however, on 13 August 2021 as lockdowns continued and became more widespread across the state. From that date, sections 6C & 6D were added to the regulation which, in effect re-instated the obligation of landlords to renegotiate leases under the National Code of Conduct.

The code of conduct remains unchanged from 2020 and essentially provides that the leasing parties should negotiate rental reductions proportionate to the lessee’s downturn in revenue, with half of the reduction to be effected as a waiver and the remaining half as a deferral.

The most obvious difference between the 2020 and 2021 versions of the retail leasing relief is in the qualifying criteria. Under the 2021 regulation, a tenant will only qualify as an ‘impacted lessee’ if they are in receipt of either the Microbusiness Grant, Business Grant or JobSaver payments and have an annual turnover of less than $50m.

The current regulation runs to 13 January 2022, but does not apply to leases entered into after 26 June 2021.

If you have any inquiries in respect of retail leasing, please contact Everingham Solomons because Helping You is Our Business.

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