In light of the recent further closures of a number of businesses and services across Australia, the ability of tenants to meet their rental obligations has been greatly impacted.
As announced by Prime Minister Scott Morrison Sunday night, all States and Territories will place a six month moratorium on evictions for both residential and commercials tenants experiencing financial distress due to Covid-19.
This reflects the recent COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 (“the Bill”) passed on Wednesday, 25 March by both houses of the NSW Parliament. The Bill is yet to receive assent but is likely in the circumstances.
In addition to a number of other various amendments, the Bill amended the Retail Leases Act 1994 and the Residential Tenancies Act 2010 by permitting the NSW Housing Minister to recommend to the Governor that regulations be made:
- prohibiting the eviction of a tenant;
- prohibiting termination of a lease or tenancy by a landlord;
- regulating or preventing the exercise or enforcement of another right of a landlord relating to the premises; and
- exempting a tenant from the operation of the provision of a Relevant Act.
‘Relevant Act’ includes the Retail Leases Act 1994, Residential Tenancies Act 2010, Boarding Houses Act 2012, Residential (Land Lease) Communities Act 2013, Agricultural Tenancies Act 1990, and any other Act relating to the leasing of commercial or residential premises. Any regulation made under this amendment will expire 6 months after its commencement, or any earlier day decided by the NSW Parliament.
While the above changes serve to safeguard the interests of tenants from eviction or lease termination for six months, presently tenants are still required to continue paying rent. This means any rent not paid will remain due once the moratorium has been lifted. If you are unable to meet your obligations to pay rent, you should approach your landlord to discuss a potential solution. This may include:
- A rental suspension to apply for a fixed period or until your business can recommence operations;
- Rental payments to accrue for a period and repaid in instalments once rental payments recommence; or
- A rental reduction, or that rent is temporarily converted to a turnover-only basis;