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Retail Shop Leases and Other Commercial Leases Regulation 2020 amendment now in effect

The Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (the Regulation) has been amended with effect from 5 February 2021.

The Regulation was made to give effect to the good faith leasing principles in National Cabinet’s Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID-19 and provide rent relief for small to medium-sized enterprise (SME) tenants with an annual turnover of less than $50 million that are eligible for the JobKeeper scheme.

The Regulation applies the turnover threshold through reference to the Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Rules 2020 (Cth) (SME Rules). However, with effect from 14 November 2020, the Commonwealth amended the SME Rules to increase the turnover threshold to be less than $120 million.

The policy objective of the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2021 (Amendment Regulation) is to restore the less than $50 million turnover threshold for SME entities under the Regulation.

The Amendment Regulation clarifies that the less than $50 million thresholds applies and is taken to have always applied when discerning whether or not a lease of premises is an affected lease for the purposes of the Regulation.

The Amendment Regulation also provides that particular provisions of the Regulation are taken to have never applied to a lease that, but for the Amendment Regulation, would have been an affected lease (ineligible lease) such that some actions are taken to have lapsed or have been withdrawn. In addition, lessors who may have been prevented from taking specific actions (for example, eviction, increasing rent) concerning an ineligible lease will no longer be prevented from taking such actions.

Useful Resources

  • See Amendment Regulation here
  • See explanatory note here
  • See Human Rights Certificate here
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