The NSW Government has announced the Commercial Landlord Hardship Fund which provides grants of up to $3,000 per month for each commercial premises where a landlord is experiencing financial hardship as a result of reducing the rent for their tenant(s) under the Retail and Other Commercial Leases (COVID-19) Regulation 2021 (the Regulation). 

The regulation also provides:

• A moratorium on lockouts and other prescribed action for the non-payment of rent and outgoings.
• Government supported mediation to help tenants and landlords renegotiate lease agreements (including rent relief).

Your obligations to your tenant

Under the leasing principles, landlords must reduce rent in proportion to the tenant’s decline in turnover. This means if a tenant has experienced a 40 per cent decline in turnover due to COVID-19, then the landlord must provide a 40 per cent reduction in rent. 
 
As a default position, at least 50 per cent of any rent reduction must be in the form of a rent waiver with the remainder a rent deferral. Any deferred rent must be paid back over the balance of the lease term or for a period of not less than 24 months, whichever is greater.
 
A deferral or delayed rent payment is not rent relief for the purposes of this grant. A rent waiver or non-payment of rent from 13 July 2021 must be agreed.

Application Process

Before applying to the Commercial Landlord Hardship Fund, landlords must complete the following process under the Commercial Tenancy Relief Scheme:

Step 1 :

Reach an agreement through either mediation or private negotiation with impacted tenants, that complies with the Retail and Other Commercial Leases (COVID-19) Regulation 2021.

Step 2 :

Obtain tenant’s approval to disclose terms of agreement for the purpose of applying for the Commercial Landlord Hardship Fund grant.

Step 3:

Show evidence that the agreed amount has been applied to the month for which the grant is being claimed.
Landlords may then apply for a grant of up to $3,000 per month per eligible property in proportion to their ownership share subject to:

• cessation of the Scheme as publicly announced;

or

• until all funds from the hardship fund have been exhausted, whichever is sooner;

and

• monthly attestation (for the term of the rental abatement agreement) from the applicant that
• The rental abatement agreement remains in force; and
• All other scheme requirements continue to be met, in particular ongoing financial hardship of both the tenant and landowner.

 
Applications are expected to open by the end of October 2021 through your Service NSW login.
 

Eligibility Criteria

To be eligible for a grant under the Commercial Landlord Hardship Fund, applicants must:

• be a landowner or trustee with total taxable land holdings of less than $5 million (as at 31 December 2020, under the Land Tax Management Act 1956), including part holdings but excluding the value of a principal place of residence;
• have not claimed land tax relief for the relevant property for rent reductions between 1 July 2021 and 31 December 2021;
• have gross rental income as their primary source of income (gross rental income being more than 50% of total assessable income) for the 2019-20 financial year;
• be a landowner of the property for which an application is made;
• be the landowner of a New South Wales property subject to the Retail and Other Commercial Leases (COVID-19) Regulation 2021;
• be a landlord with a current lease agreement that provides rent relief to the tenant(s) from 13 July 2021 that will not be claimed as 2021 land tax relief; and
• attest that providing rent relief to the tenant(s) may cause financial hardship.

 
More information please click here.