On 16 September 2020, the Queensland State Government announced amendments to the definition of “response period” pursuant to the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) (“the Regulation”) which was enacted pursuant to the COVID-19 Emergency Response Act 2020 (Qld) (“the Act”) has been extended from 30 September 2020 until 31 December 2020.
For a full explanation of the mechanics of the Act and the Regulation, please refer to our previous articles with respect to leasing matters during COVID 19, which can be found here.
The amendments have taken effect by the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld).
The practical effect of these amendments is that, for an extended response period between 1 October 2020 and 31 December 2020, landlords and tenants must continue to negotiate with each other in good faith and landlords are still restrained from taking a prescribed action against a Tenant for non-payment of rent, outgoings, or other lease payments, including:
- increasing rent;
- exercising re-entry rights;
- claiming on security; or
- taking (or continuing) other enforcement action for this extended period.
However, beyond 30 September 2020:
- There is no longer a mandatory requirement for a landlord to offer a waiver in any negotiations with the tenant. Previously, the Regulation required the landlord to offer a 50% waiver of any negotiated amounts; and
- Tenants must be:
- a SME Entity with less than $50,000,000.00 annual turnover; and
- eligible for the JobKeeper regime between 28 September 2020 and 4 January 2021.
Other aspects of the Regulation that remain unchanged include:
- the tenant’s ongoing obligation to provide turnover, financial, and other information in support of any request for relief;
- the right for a tenant to seek further relief if there is a material change to their circumstances;
- the ability of the parties to reach an agreement that may be inconsistent with the Regulation.
Landlords and tenants remain under obligations to negotiate in good faith to ensure the continuation of their leases during the COVID 19 pandemic for this extended period until 31 December 2020.
From 30 September 2020, landlords are no longer required to offer waivers to their tenants as part of the offered relief (but may continue to do so if they wish). We anticipate that payment deferrals will be the basis of most offers and negotiated outcomes, which will also lead to security deposits being retained for significantly longer, until the deferred payments have been fully repaid.
Marino Law has achieved successful outcomes for both landlords and tenants during the COVID-19 pandemic and our lawyers are available to assist landlords and tenants with any commercial leasing disputes under the COVID-19 regime.