On 2 December 2020, Queensland Parliament passed amending legislation to give further effect and operation to the COVID-19 Emergency Response and Other Legislation Amendment Act 2020 (Qld) (“Act”) and its regulations, most notably the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (“Regulation”).
Under this new round of amendments, the Response Period has remained fixed between 29 March 2020 and 30 September 2020 and the Extension Period between 1 October 2020 and 31 December 2020 has also not been extended. This means that landlords and tenants are no longer under any further obligations to negotiate concessions, deferrals or other incentives after 31 December 2020.
From 1 January 2021 (unless there is an Agreement between the parties to the lease that states otherwise), tenants are expected to resume usual rent and other payment obligations pursuant to their leases, including the commencement of payment of any deferred rent that applies to payments within the Response Period.
The explanatory notes to the amending legislation states:
The end of the response period and the extension period under the (Regulations) will allow a return to the ordinary commercial relations between lessors and lessees under affected leases that existed prior to the COVID-19 emergency.
Although there is still some protection afforded to tenants that have experienced financial difficulty as a consequence of COVID 19, these protections are being progressively relaxed, in an effort to try and return the parties to their usual obligations, as the recovery effort from COVID-19 is continuing.
What has been extended is the prohibition on a landlord taking a Prescribed Action against a tenant for:
- Failure to pay Rent for a period that is wholly or partly during the Response Period or the Extension Period;
- Failing to pay outgoings for a period that is wholly or partly during the Response Period or the Extension Period; and
- The business not being open during the required hours under the lease during the Response Period or the Extension Period.
Landlords are now prevented from taking a Prescribed Action in relation to the above until 30 April 2021. Under section 9 of the Regulation, a prescribed action includes the following:
- Recovery of possession
- Termination of the lease
- Eviction of the lessee
- The performance of an obligation by the lessee or another person under a guarantee under the lease
- Exercising a right of re-entry to premises
- Seizure of any property, including for the purpose of securing payment of rent
- Exercising or enforcing another right by the lessor under the lease or other agreement relating to the leased premises
- The payment of interest on, or a fee or charge relating to, unpaid rent or outgoings
- A claim on a bank guarantee, indemnity or security deposit for unpaid rent or outgoing
The effect of the above is that there is still a moratorium on a landlord pursuing a tenant for an amount of rent or outgoings that is owing wholly or partly within the Response Period or Extension Period from 29 March 2020 to 31 December 2020.
Landlords are not prevented from pursuing tenants for rent or Outgoings arrears from 1 January 2021.
Tenants should be careful to ensure they remain up to date with their ongoing lease payments, in addition to any deferred payment instalments that were permitted to commence from 1 January 2021. Additionally, tenants should remain in constant and open communication with their landlords if they are still having difficulty in meeting such obligations, as landlords now have the ability to issue breach notices or take enforcement action for arrears owing for a period that is wholly on or after 1 January 2021.
Marino Law acts for landlords and tenants alike and have successfully negotiated practical and commercial outcomes to disputes in commercial and retail leases where both parties have experienced hardship as a consequence of COVID 19.
To speak with one of our experienced commercial, property, litigation or dispute resolution lawyers about your personal situation, please contact us on 07 5526 0157.