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New South Wales begins weaning off COVID-19 rent relief

20 November 2020

#Property & Real Estate, #COVID-19

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New South Wales begins weaning off COVID-19 rent relief

It now seems the NSW Government will transition tenants off COVID-19 rent relief. The current C-19 rent moratorium ends on 31 December 2020. This broadly means landlords can take ‘prescribed actions’ for breaches and do other things – like increase rents. Subject to agreements made under the regulations, it can also trigger repayments of deferred rent.

However, it is a weaning process. On 17 November 2020, the NSW government announced its C-19 regulations will have a limited extension until 28 March 2021 – that is, the extension is only for a limited class of tenants. The media releases and available information suggest relief will be ongoing until 28 March 2021 for retail leases with turnovers of less than $5 million, and where the tenant’s December quarter turnover fell by at least 30%. It is not clear when the laws will formally be made, or how they will practically operate – for example, is $5 million turnover based on 2018/2019 figures?

Landlords may now consider alerting tenants to the likelihood of the laws ending – for some on 31 December 2020 and others on 28 March 2021. Such notification can be beneficial: tenants could begin provisioning to repay deferrals. Further, it may encourage tenants in developing a post-C-19 mindset. It seems in no one’s interest – not landlords, tenants, customers nor NSW more broadly, for the C-19 relief to end with a jolt.      

Authors: Bede Haines 

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