COVID-19: Critical Matters for Commercial & Retail Tenants and Landlords
The NSW Government now has the power to set new rules for retail landlords and tenants, the details of which will be known in coming days.
Although the new laws (currently) only relate to retail leases, nevertheless there are substantial challenges for both commercial and retail tenants and landlords to consider as set out below arising from the COVID-19 situation.
What is expected?
For retail tenants and landlords it is expected that the new laws will address such matters as evictions, bank guarantees/bonds, tenant defaults, rent abatements, and mandatory/core trading hours.
Caution must therefore be exercised when purporting to rely upon a lease term as it may be modified or prohibited under the new regime.
What about force majeure and rent abatement clauses?
Contractual force majeure provisions (ie, events beyond the reasonable control of a party) and rent abatement clauses will have important significance and need to be carefully considered in terms of the rights, remedies and obligations they create for both landlords and tenants.