In early April, the federal government adopted a Mandatory Code of Conduct relating to commercial leases. NSW is the first State or Territory to enact legislation to give effect to the Code through the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (‘the Regulation’). The Regulation commenced on 24 April 2020 and will be in force for 6 months. The main functions of the Regulation are to:

  1. Prohibit and regulate the ability of lessors to exercise certain enforcement rights in relation to some commercial leases during the pandemic; and
  2. Require renegotiation of rent and terms of certain commercial leases in good faith by lessors and lessees before any legal enforcement action is commenced.

The Regulation applies to “commercial leases” which includes retail leases under the Retail Leases Act 1994 as well as any agreement relating to the leasing of premises or land for commercial purposes, with some specified exclusions. Majority of the protections are for “impacted lessees” i.e. lessees who qualify for the JobKeeper Scheme and have a turnover of less than $50 million for the last financial year. Contact M+E for further information about the specific restrictions imposed on landlords and rights granted to tenants under the Regulation.

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