COVID-19 Emergency Lease Legislation

The COVID-19 Legislation Amendment (Emergency Measures) Act 2020 (NSW) (‘COVID Act‘) was assented to and became effective as at 25 March 2020. The COVID Act was introduced by the NSW Parliament to address the public health emergency impacts caused by COVID-19 in New South Wales. The measures introduced by the COVID Act will generally operate on a temporary basis.

The Retail Leases Act 1994 (NSW) (‘RLA’) is one of the various pieces of legislation amended by the COVID Act.

What are the key changes to the RLA?

The amended RLA effectively entitles the Minister to recommend to the Governor to make regulations which:

  • prohibit the Lessor or Owner from recovering possession of the Premises or Land from the Lessee or Tenant under the relevant Act in particular circumstances (which are at this point unknown);
  • prohibit the Lessor or Owner from terminating the Lease or Tenancy under the relevant Act in particular circumstances (which are at this point unknown);
  • regulate or prevent the Lessor or Owner from exercising or enforcing other rights it may have relating to the Premises or Land under the relevant Act or agreement relating to the Premises or Land in particular circumstances (which are at this point unknown); and
  • exempt the Lessee or Tenant, or class of Lessees or Tenants, from the operation of a provision of the relevant Act or agreement relating to the leasing or licensing of the Premises or Land.

These provisions are very broad and will only be fully understood when the regulations are made.

What is a ‘relevant Act’?

Relevant Act covers each of the following pieces of legislation:

  • Agricultural Tenancies Act 1990(NSW);
  • Retail Leases Act 1994(NSW); and interestingly,
  • any other legislation relating to the leasing of Premises or Land for commercial purposes.

Commercial leases such as office leases in New South Wales are not regulated by legislation except generally through the Conveyancing Act 1919 (NSW). Although the intention of the NSW Parliament is clear, it is unknown at this stage how the amended RLA and regulation to be made will affect Landlords and Tenants.

Limitations on application

The Minister may only make recommendations to make such regulations if the NSW Parliament is not currently sitting and is not likely to sit within 2 weeks after the regulations are made, and in the Minister’s opinion, the regulations are reasonable to protect the health, safety and welfare of Tenants and Lessees.

Any regulations made will only remain effective for a period of 6 months after the day on which that regulation commences or the earlier date determined by Parliament.

What does this mean to you?

Retail and residential Tenants and Lessees will generally be protected under the COVID Act from being evicted or having their Leases or Tenancies terminated by the Landlords and Owners. However, it does not provide any rental comfort nor address other commercial issues caused by the delay in carrying out their obligations under the Lease through no fault of their own. Until such time as the NSW Government introduces other measures to address these matters, Landlords and Owners are entitled to demand full payment of rent, outgoings and other monies from the Tenants and Lessees. We recommend Tenants and Lessees reach separate agreements with their Landlords and Owners to address these commercial issues.

The above changes, to the extent applicable, supersede any related terms and conditions in existing Leases and Tenancies.

For further information, please contact the Property + Projects Team.

Mike Ellis: mike.ellis@vincentyoung.com.au
Yanlie Leung: yanlie.leung@vincentyoung.com.au