2022
2022
s2022-009
2022-03-04
Retail Leases Act 1994
act-1994-046
reg
reprint
reg/2022-7
allinforce
LW 13 January 2022
0
sl-2022-0007
f173d44f-58db-48af-9d0c-839f8d039696
61121831-ed32-485f-b3d0-d83dc5d76f7c
none
website
Does not include amendments
by—
Retail and Other Commercial Leases
(COVID-19) Amendment Regulation 2022 (66) (not commenced
— to commence on 14.3.2022)
Proposed repeal—
This Regulation is to be repealed by sec 16(2) of
this Regulation on 14.7.2022.
Part 1Preliminary
1Name of Regulation
This Regulation is the Retail and Other Commercial Leases (COVID-19) Regulation
2022.
2Commencement
This Regulation commences on 13 January 2022 and
is required to be published on the NSW legislation
website.
3Definitions
In this Regulation—
business means an undertaking,
whether or not carried on with a view to profit, involving the manufacture,
sale or supply of goods or services.
commercial lease means a
retail shop lease, but does not include the following—
(a)
a lease entered into on or after 26 June 2021,
but not—
(i)
a lease entered into by an option to extend or
renew the lease, or
(ii)
any other extension or renewal of an existing
lease on the same terms as the existing lease,
(b)
a lease under the Agricultural
Tenancies Act 1990,
(c)
a commercial lease within the meaning of the
Conveyancing (General) Regulation
2018, Schedule 5.
group, for a corporation, means the
corporation and all corporations that are related bodies corporates of the
corporation.
impacted lease means a
commercial lease to which an impacted lessee is a party.
impacted lessee—see
section 4.
lessee means the person who has the
right to occupy premises or land under a commercial lease.
lessor means the person who grants the
right to occupy premises or land under a commercial lease.
National Code of
Conduct means the National Cabinet Mandatory Code of Conduct—SME
Commercial Leasing Principles During COVID-19 adopted on 7
April 2020.
Note—
The National Code of Conduct can be accessed at
https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf
prescribed action means
taking action under the provisions of a commercial lease or seeking orders or
issuing proceedings in a court or tribunal for any of the
following—
(a)
eviction of the lessee from premises or land the
subject of the commercial lease,
(b)
exercising a right of re-entry to premises or
land the subject of the commercial lease,
(c)
recovery of the premises or
land,
(d)
distraint of goods,
(e)
forfeiture,
(f)
damages,
(g)
requiring a payment of interest on, or a fee or
charge related to, unpaid rent otherwise payable by a
lessee,
(h)
recovery of the whole or part of a security bond
under the commercial lease,
(i)
performance of obligations by the lessee or any
other person pursuant to a guarantee under the commercial
lease,
(j)
possession,
(k)
termination of the commercial
lease,
(l)
any other remedy otherwise available to a lessor
against a lessee at common law or under the law of this
State.
prescribed breach of an
impacted lease means—
(a)
a failure to pay rent, or
(b)
a failure to pay outgoings,
or
(c)
the business operating under the lease not being
open for business during the hours specified in the
lease.
prescribed period means the
period commencing at the beginning of 13 July 2021 and ending at the end of 13
March 2022.
related body corporate
has the same meaning as in the Corporations Act
2001 of the Commonwealth.
the
Act means the Retail Leases Act
1994.
turnover of a business includes any
turnover derived from internet sales of goods or
services.
Note—
The Act and the Interpretation
Act 1987 contain definitions and other provisions that
affect the interpretation and application of this
Regulation.
4Meaning of “impacted
lessee”
A lessee is an impacted lessee
if—
(a)
the lessee qualifies for 1 or more of the
following, or would qualify but for a COVID-19 Disaster Payment made to the
lessee by the Commonwealth—
(i)
2021 COVID-19 Micro-business
Grant,
(ii)
2021 COVID-19 Business Grant,
(iii)
2021 JobSaver Payment,
and
(b)
the following turnover in the 2020–2021
financial year was less than $50 million—
(i)
if the lessee is a franchisee—the turnover
of the business conducted at the premises or land
concerned,
(ii)
if the lessee is a corporation that is a member
of a group—the turnover of the group,
(iii)
in any other case—the turnover of the
business conducted by the lessee.
5Application of Regulation
This Regulation applies to the exercise or
enforcement of rights under an impacted lease in relation to a prescribed
breach of the lease occurring during the prescribed
period.
Part 2Impacted leases
6Application of Part
This Part applies if, at any time during the
prescribed period, a lessee is an impacted lessee.
7Provision of information
(1)
An impacted lessee must give the lessor the
following information about the impacted lease—
(a)
a statement to the effect that the lessee is an
impacted lessee,
(b)
evidence that the lessee is an impacted
lessee.
(2)
The information—
(a)
may be given before, or as soon as practicable
after, a prescribed breach occurs, and
(b)
must be given within a reasonable time after it
is requested by the lessor.
(3)
The lessor may request the information under this
section at any time if the information is reasonably required to ensure that
the lessee continues to be an impacted lessee, but may not request the
information more than once every 2 weeks.
8Obligation to not increase rent
The rent payable under an impacted lease must not
be increased during the prescribed period, other than rent or a component of
rent determined by reference to turnover.
9Compulsory mediation
(1)
A lessor must not take prescribed action against
an impacted lessee on the grounds of a prescribed breach of the impacted lease
that has occurred during the prescribed period unless—
(a)
the matter has been referred for mediation under
the Act, Part 8, Division 2, and the Registrar has certified in writing that
the mediation has failed to resolve the dispute, and
(b)
if the lessee has requested a renegotiation under
section 10, the lessor has complied with that
section.
(2)
Nothing in this section prevents a lessor and
impacted lessee agreeing to action, including prescribed action, being taken
in relation to the impacted lease without mediation or without complying with
section 10.
10Obligation to renegotiate
(1)
A party to an impacted lease may request that the
other parties renegotiate the rent payable under, and other terms of, the
impacted lease.
(2)
A party to the impacted lease may make a second
or subsequent request under subsection (1), but, unless the parties otherwise
agree, an impacted lessee may make a second or subsequent request only if the
request—
(a)
is made during the prescribed period,
and
(b)
does not relate to rent or outgoings for a period
for which the rent or outgoings have already been reduced, waived or deferred
following a renegotiation under this section unless the lessee ceases to be an
impacted lessee during the period.
(3)
A party to an impacted lease must, if requested
under this section—
(a)
renegotiate in good faith the rent payable under,
and other terms of, the impacted lease, and
(b)
commence renegotiations within—
(i)
14 days of receiving the request,
or
(ii)
another period agreed to by the
parties.
(4)
The parties must renegotiate the rent payable
under, and other terms of, the impacted lease taking into
consideration—
(a)
the economic impacts of the COVID-19 pandemic,
and
(b)
the leasing principles set out in the National
Code of Conduct.
(5)
When renegotiating the rent payable—
(a)
a grant or payment referred to in section 4(1)(a)
that is made to a lessee must be treated as if it were part of the trade or
turnover of the lessee, and
(b)
a lessor is not required to reduce rent for
periods when the lessee is not an impacted lessee, and
(c)
a lessor is entitled to provide that a negotiated
rent reduction will not apply at times during which the lessee ceases to be an
impacted lessee.
(6)
For the purposes of subsection (5)(b) and (c),
after 30 November 2021, a lessee is taken to be an impacted lessee
if—
(a)
the lessee would have qualified for 1 of the
following were it still to be available—
(i)
2021 COVID-19 Micro-business
Grant,
(ii)
2021 JobSaver Payment,
and
(b)
the following turnover in relation to the lessee
in the 2020–2021 financial year was less than $5 million—
(i)
if the lessee is a franchisee—the turnover
of the business conducted at the premises or land
concerned,
(ii)
if the lessee is a corporation that is a member
of a group—the turnover of the group,
(iii)
otherwise—the turnover of the business
conducted by the lessee.
(7)
If the impacted lessee does not comply with
subsections (3) or (4) or section 7, the lessor is taken to have complied with
this section.
(8)
To avoid doubt, a renegotiation commenced but not
concluded before the expiry of the prescribed period may be continued and
concluded after the expiry.
11Actions required by law are not
breaches
An act or omission of an impacted lessee required
under a law of the Commonwealth or the State in response to the COVID-19
pandemic—
(a)
is taken not to amount to a breach of the
impacted lease to which the impacted lessee is a party,
and
(b)
does not constitute grounds for termination of
the impacted lease or the taking of any prescribed action by the lessor
against the impacted lessee.
12Lessor action for non-COVID-19 pandemic related
reasons
Nothing in this Regulation prevents a lessor
taking prescribed action on grounds not related to the economic impacts of the
COVID-19 pandemic.
Note—
For example, a lessor may terminate a commercial
lease if the lessee has breached the lease by damaging the premises concerned
or may take action if a lessee fails to vacate premises following the expiry
of a fixed term commercial lease.
Part 3Miscellaneous
13Dispute resolution
(1)
The Act, Part 8 extends to an impacted commercial
lease dispute as if it were a retail tenancy dispute within the meaning of
that Part.
(2)
In this section—
impacted commercial lease
dispute means a dispute about a prescribed breach of an
impacted lease as referred to in the Conveyancing
(General) Regulation 2018, Schedule 5, clause
7(1).
14Equity and law preserved
Nothing in this Regulation excludes the rules of
equity and of common law from applying to the determination of a dispute
concerning—
(a)
the recovery of possession of premises or land
from a lessee, or
(b)
the termination of a commercial lease by a
lessor, or
(c)
the exercise or enforcement of another right of a
lessor of premises or land.
15Tribunal and court consideration of National Code of Conduct
leasing principles
The Tribunal or a court, when considering whether
to make a decision or order relating to any of the following, must consider
the leasing principles set out in the National Code of Conduct—
(a)
the recovery of possession of premises or land
from an impacted lessee,
(b)
the termination of an impacted lease by a
lessor,
(c)
the exercise or enforcement of another right of a
lessor under an impacted lease.
16Repeals
(1)
The following are repealed—
(a)
the Retail and Other
Commercial Leases (COVID-19) Regulation
2021,
(b)
the Retail and Other
Commercial Leases (COVID-19) Regulation (No 2)
2021.
(2)
This Regulation is repealed at the end of the day
that is 6 months after the day on which the Regulation commences, except as
provided for in subsection (2).
Note—
See section 87(4) of the Act regarding the
duration of regulations made under Part 11 (Response to COVID-19 pandemic) of
the Act.
(3)
Schedule 1 of this Regulation is repealed on the
day that is one day after the day on which this Regulation
commences.
Schedule 1
sch 1: Rep 2022 (7),
sec 16(3).
Historical notes
Table of amending instruments
Retail and Other
Commercial Leases (COVID-19) Regulation 2022 (7). LW
13.1.2022. Date of commencement, 13.1.2022, sec 2. This Regulation has been
amended by sec 16(3) of this Regulation.
Table of amendments
Sch 1
Rep 2022 (7), sec
16(3).