The NSW Government has re-introduced commercial tenancy relief in keeping with the National Cabinet’s Mandatory Code of Conduct for Commercial Leasing to extend rent relief to eligible tenants impacted by COVID-19.
The State Government is providing a new $40 million Hardship Fund to provide a monthly grant of up to $3,000 for small commercial or retail landlords who provide rental waivers of at least the value of the grant and any land tax relief they are eligible for.
NSW Minister for Finance and Small Business Damien Tudehope said the Retail and Other Commercial Leases (COVID-19) Regulation 2021 had been extended until 13 January 2022 to support small businesses such as cafes, restaurants, hair salons and gyms for six months.
“We have always encouraged landlords and tenants to come to the table and negotiate, but now we are going one step further by mandating the minimum relief that landlords need to provide impacted tenants,” Mr Tudehope said.
“The Government has not taken this step lightly, but we saw last year that the framework set down by the National Cabinet brought tenants and landlords to the table to work out a way forward.
The Retail and Other Commercial Leases (COVID-19) Regulation 2021 will require landlords to renegotiate rent having regard to the National Cabinet’s Code of Conduct. The Code of Conduct requires landlords to provide rent relief in proportion with their tenant’s decline in turnover. Of the rent relief provided, at least 50% must be in the form of a waiver, and the balance a deferral.
How commercial tenants can qualify for relief
The regulation applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the COVID-19 Microbusiness grant, COVID-19 Business Grant, or JobSaver Payment (see Breakout below).
The regulation will prohibit a landlord from evicting or locking out a tenant for certain breaches of the lease unless they have first renegotiated rent and attempted mediation. The NSW Government has injected an extra $2 million into the Small Business Commission to provide additional staff to meet the demand for mediations. The commission will also assist retail and commercial tenants and landlords to discuss discounts or renegotiating rents.
Land tax relief
Eligible commercial landowners have been given a helping hand and can apply for up to 100% of their land tax liability for 2021. To be eligible, the landowner must have reduced rent for the affected tenant by at least the amount claimed for any period between 1 July 2021 and 31 December 2021.
For more information on land tax relief visit: https://www.service.nsw.gov.au/transaction/apply-covid-19-land-tax-relief
How brokers can help
Cameron Poolman, CEO of OnDeck, is urging brokers to reach out to their SME clients such as cafes, restaurants, hair salons and gyms to let them know there is some rental relief available for them to access.
“The last eight weeks have been very challenging for small businesses across NSW, and this rental relief will help give business owners more financial certainty, especially as rent is usually a high fixed cost,” Cameron Poolman said.
“It’s pleasing to see the government urging landlords and commercial tenants to work together as we all navigate our way through the latest lockdown period.”
More information for landlords and tenants will be published on the Service NSW website soon. For more information on mediation support and the Small Business Commission visit: https://www.smallbusiness.nsw.gov.au/
Breakout: Other NSW Government Small Business support
1. JobSaver
If you’re a business, sole trader or not-for-profit organisation in NSW and you’ve been impacted by the recent COVID-19 restrictions, you may be eligible for the 2021 COVID-19 JobSaver payment.
JobSaver will provide cash flow support to impacted businesses to help maintain their NSW employee headcount from 13 July 2021.
How much
- Employing businesses: 40% of their weekly NSW payroll, with payments between $1,500 and $100,000 per week
- Non-employing business: $1,000 per week
Eligibility
- A revenue decline of 30% or more
- Turnover between $75,000 and $250 million
For more information or to apply for the Job Saver visit www.service.nsw.gov.au/transaction/jobsaver-payment#introduction
2. COVID-19 Micro Business Grants
If you’re a micro-business (small business, sole trader, or not-for-profit organisation with aggregated annual turnover between $30,000 and $75,000) and have been impacted by the recent COVID-19 restrictions, you may be eligible to apply for a fortnightly payment of $1,500 to cover business expenses for the duration of the Greater Sydney lockdown.
Eligibility
- A turnover between $30k and $75k
- A revenue decline of 30% or more
- Businesses that provide the primary income source for a person associated with the business.
For more information or to apply for the COVID-19 Micro Business Grants visit www.service.nsw.gov.au/transaction/2021-covid-19-micro-business-grant#introduction
3. COVID-19 Business Grants
If you’re a business, sole trader or not-for-profit organisation in NSW and you’ve been impacted by the recent COVID-19 restrictions, you may be eligible for a one-off grant of $7,500, $10,500 or $15,000.
Eligibility
- A revenue decline of 30% or more
- Annual turnover above $75,000
- Payroll up to $10 million
For more information or to apply for the COVID-19 Business Grants visit www.service.nsw.gov.au/transaction/2021-covid-19-business-grant
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