COVID-19 Support for NSW Commercial Tenants and Landlords

Contents

• Reintroduction of the Mandatory Code of Conduct for Commercial Leasing
• Hardship Fund - $3,000 monthly grant for Small Commercial or Retail Landlords
• Residential Tenancy Support Payment

Reintroduction of the Mandatory Code of Conduct for Commercial Leasing

Under the Mandatory Code of Conduct for Commercial Leasing, landlords are required to provide rent relief for eligible tenants impacted by COVID-19. The key points include:

• 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 per cent must be in the form a waiver, and the balance a deferral.
• The Code of Conduct applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the COVID-19 Business Grant, COVID-19 Micro-Business Grant or the JobSaver Payment.
• Landlords are prohibited from evicting a tenant for certain breaches of the lease unless they have first renegotiated rent and attempted mediation.

Commercial leases and COVID-19 FAQs are available here.

Hardship Fund - $3,000 monthly grant for Small Commercial or Retail Landlords

Grants of up to $3,000 per month per property available for eligible 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. For example, if a landlord provides a $3,000 rent waiver, but has received a $500 land tax relief payment from the Government, they will be eligible for a $2,500 grant for the property.

To be eligible, landlords must:

• have total taxable unimproved landholdings of less than $5 million (excluding primary place of residence)
• have rental income as their primary source of income
• have a tenant that is eligible for protections under the Retail and Other Commercial Leases (COVID-19) Regulation 2021
• have provided rental waivers to their impacted tenants of at least the same value of the grant and any land tax relief they are eligible to receive
• attest that providing rent relief to their tenant will cause them financial hardship

We expect detailed eligibility and guidelines on how to apply for the hardship fund will be finalized soon.

Commercial leases and COVID-19 FAQs are available here.

Residential Tenancy Support Payment

Previously introduced as a $1,500, the Residency Tenancy Support Payment has increased to $3,000 for eligible landlords. This payment will be available for landlords who agree to reduce the rent for COVID-19 impacted tenants from 14 July 2021.

The amount for each landlord will be capped at the rent reduction that is passed onto the tenants, or $3,000, whichever is the lower.

Landlords can make separate claims for each premise they own.

Landlords cannot ask tenants to repay the reduced amount of rent that has been paid to them under the Residential Tenancy Support Payment or land tax benefit.

Eligibility

A landlord is eligible for this payment where:

• there is a residential tenancy agreement with a tenant – as proof, you will need a rental bond number or a written tenancy agreement
• the tenant is an eligible COVID-19 impacted tenant
• the landlord has entered a written agreement with the tenant to reduce or waive rent payable from 14 July 2021. A copy of this agreement will be required with a claim for Payment; and
• the landlord has/will not claim the COVID-19 land tax benefit for the same tenancy.

A landlord can agree to vary the rent for a period that goes beyond 11 September 2021.

Rent reductions beyond 11 September 2021 may be claimed as part of the payment.

How to Apply

Applications must be submitted online via NSW Fair Trading.

Land Tax Concessions

The 2021 Land Tax COVID-19 (1 July 2021 to 31 December 2021) relief has been introduced to reduce a landowner’s land tax payable for 2021, by up to 100%, for a taxable parcel of land where rent relief has been given to the tenant who occupies that land. For eligibility details and how to calculate the land tax relief that you may be eligible for, see our COVID-19 NSW State Tax Concessions article.

If you require assistance in determining your eligibility, assistance with the application process or an Accountant’s Letter, our team at BLG Business Advisers are Wollongong Accountants and are here to help so please don’t hesitate to reach out to us.

We wish you and your business every success!

*This information is relevant at the time of publishing and is subject to change*