Amendments to the Law during Covid-19: Lease Edition

Covid-19 has had an impact on almost every aspect of health,  economy and society at large. As such, the law cannot continue as it were in ordinary times as we are facing an ongoing crisis that is estimated to endure for at least six months. The Covid-19 Legislation Amendment (Emergency Measures) Act 2020 (“the Act”) came into force on 25 March 2020 as a response to the public health emergency caused by Covid-19. The Act is designed to amend several Acts to enable the implementation of emergency measures required in response to this pandemic.


What are the changes that affect lessees and landlords under retail, commercial or residential lease?

The Retail Leases Act 1994 (“RLA”) has been amended by the Act to insert section 87 found in part 11. These amendments apply to Retail Leases, Agricultural Tenancies and any other Act relating to the Leasing of premises or land for commercial purposes.

The Residential Tenancies Act 2010 (“RTA”) has also inserted a new section 229 within a new Part 13 with the same effect. These amendments also extend to Boarding Houses, Residential communities including caravan parks and any other act relating to the leasing of premises or land for residential purposes.

The new amendments give the Minister the power to make regulations to provide a safety net to Leese’s in these difficult and uncertain times. The Minister has the power to make regulations regarding the following matters:

  • Prohibiting the lessor or owner from recovering possession of the premises or land from a tenant in particular circumstances;
  • Prohibiting the lessor or owner from terminating a lease or tenancy in particular circumstances;
  • Regulating or preventing the lessor or owner from exercising or enforcing it’s right relating to the premises or land in particular circumstances; and
  • Exempting a tenant from the operation of a provision of the relevant Act or an agreement relating to the leasing or licensing of premises.

The Minister may recommend to the Governor that regulations be made under this section if in the Minister’s opinion, the regulations are reasonable to protect the health, safety, and welfare of tenants under the Act and Parliament is not sitting or likely to sit within 2 weeks after the regulations are made.

These regulations may expire after six months from commencement or an earlier date decided by Parliament.


How do these changes affect me?

For tenants and lessees, there may be a period of up to six months grace period which prevents landlords from exercising their rights under your agreement or the relevant Act. Some of these rights include taking possession of the property or terminating the tenancy in situations where the tenant may be breaching their lease agreement or the law by not paying rent or not operating during their normal operating hours. This is subject to regulations being made and at the time of writing this article, regulations are not yet made but it is anticipated that the regulations may be made shortly to protect lessee and tenants during this difficult and unprecedented time.

If the regulations are made, the Landlord’s ordinary rights in these agreements may be restricted and you must be careful of your actions in deliberating whether or not you can exercise your ordinary rights.

The legislators have made these amendments to ensure people or businesses who cannot strictly comply with their ordinary rental agreements are not unfairly disadvantaged. In the unfolding economic crisis where unemployment and financial difficulty is on the rise, it is an unfortunate reality that families and companies may not be able to afford rent. In addition to the health concerns in the air, homelessness and further loss of business is a serious concern which the government aims to alleviate temporarily with these amendments.

If you are a lessee, tenant or an owner or landlord who is unsure about what these new changes mean for you or your business call Pannu Lawyers on (02) 9920 1787 to speak to one of our experienced lawyers. At Pannu Lawyers, we advise on residential, commercial and retail leases as well as commercial and residential conveyancing. Pannu Lawyers are keeping up to date with changes to the law and are here to advise you on how exactly these changes may affect you.

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