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Court decision could extend rent relief for SMEs

Adrian Flores
Adrian Flores
02 September 2020 1 minute readShare
Court decision could extend rent relief for SMEs

A recent NSW court decision has left open the possibility of some small businesses becoming eligible for an additional six months of rent relief.

The ruling from the NSW Supreme Court found footwear retailer Sneakerboy should be given another six months, until 30 April 2021, to recover from the coronavirus crisis before its landlord can increase rents or evict it.

The landlord, George Properties, was in dispute with Sneakerboy around rent relief measures under NSW’s Retail and Other Commercial Leases (COVID-19) Regulation.

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In April, the national cabinet agreed to a rent relief code that was subsequently legislated in each state and territory.

Representing Sneakerboy in the case, Bartier Perry partner Adam Cutri said the decision allows for six more months of rent relief for SME tenants.

 

“The court has made it clear that come October 24, when the regime is due to be repealed, tenants may still be protected under the COVID-19 regulations, with the court indicating that the subsequent reasonable recovery period would likely be at the minimum a further six months after the end of the pandemic period,” Mr Cutri said in a statement.

“Given this decision addresses the national cabinet’s mandatory code, it’s likely to have national implications.”

Mr Cutri said the judgment also highlighted that landlords and small business must come to the table and negotiate sensible rental agreements.

“The risk is if you use this rental regulation as a sword instead of a shield, you’ll put yourself in a very perilous position,” he said.

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“The judgment indicates if you don’t negotiate before the regulations are due to be repealed in October, you may not gain the benefit of an additional six months of protection.

“It’s incredibly important for both landlords and small business to talk now rather than sleepwalk to the precipice in the hope someone else will work it out for them.”

Court decision could extend rent relief for SMEs
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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