Rent relief negotiation rights for businesses struggling due to Covid-19 extended

Rent relief negotiation rights for businesses struggling due to Covid-19 have been extended but the Property Council of Australia has hit out at the measure.

A code of conduct giving small businesses impacted by Covid the right to rent waivers or deferrals for their commercial leases has been extended by two months.

The policy was introduced at the beginning of the pandemic for businesses with an annual turnover of less than $5 million, and was due to expire this week.

But the NSW Government sneaked in the extension at the eleventh hour with an update to the Small Business Commissioner’s website.

Rent relief negotiation rights for businesses struggling due to Covid-19 have been extended. Picture: Sam Ruttyn

“Small businesses affected by Covid-19 will be able to seek rent relief until March 13, 2022,” a statement read.

“The regulations require landlords to negotiate rent relief with eligible commercial and retail tenants that are experiencing a turnover decline of 30 per cent or more or would have met the eligibility criteria for Jobsaver or the Microbusiness grant.

“Rent relief should be proportionate with eligible tenant’s decline in turnover, with at least 50 per cent in the form a waiver, and the balance a deferral.”

Landlords experiencing hardship could also be eligible for a grant of up to $3000 per month, per property.

“We know that rent is one of the biggest fixed costs for small businesses and the extension of the regulations is intended to help them get through the next couple of months,” Small Business Minister Eleni Petinos said.

NSW Small Business Commissioner Chris Lamont said the policy has been effective throughout the pandemic to date.

“Mediation and the NSW Commercial Leasing Regulations have provided many small businesses with important financial relief allowing them to stay in business,” Mr Lamont said.

The Council of Small Business Organisations Australia welcomed the move, labelling the extension “very positive”.

“It gives small businesses a bit of a pressure valve release,” COSBOA chief executive Alexi Boyd said.

“A lot of businesses are telling us that they still feel like they’re in a lockdown because of worker shortages and increased pressures essentially forcing them to close their doors.”

But the Property Council of Australia has hit out at the extension, claiming the government was relying on private entities to provide welfare.

“This decision should be seen for what it is, government intervention into legal contracts and a compulsory transfer of income from one business to another,” NSW executive director Luke Achterstraat said.

Empty stores are commonplace in our suburbs. Picture: Glenn Hampson

“Such radical measures are not what ‘living with Covid’ is supposed to be about.

“The extension of the one-size-fits-all code creates more administrative burden for tenants, government and owners.

“Further regulation simply brings red-tape through higher compliance costs when many negotiations are already underway, and many deferred rent amounts are still outstanding.”

Mr Achterstraat said many of the landlords affected were likely to be mum and dad investors.

The Rocks is deeply challenged as international travel continues to be off the table. Picture By Ryan Osland

“Our members recognise the importance of supporting their tenants and have done so over the last two years on a tailored case-by-case basis,” he said.

“To be clear this measure is not government support, but government intervention into commercial contracts. It is the legislated transfer of income between private entities.

“Property is the only private industry being legislated to support other private industry, with scant regard to the challenges faced by commercial property owners themselves.”