NSW acts to protect retail tenants

By Dean Blake | 27 Mar 2020 View comments

New South Wales has moved to allow additional protections to retail and commercial tenants suffering rent distress in response to the mass closure of retail sites across Australia.

Part 11 of the Retail Leases Act 1994 will be amended to allow the Minister, during a time of public health emergency, to step in and stop a retailer, or a whole class of retailers, from being locked out of locations due to nonpayment of rent.

Minister for Finance and Small Business Damien Tudehope said the Government is alert to the increasing issue of evictions, joblessness and homelessness.

“The Government is alive and alert to that and wants to make a comprehensive response,” Tudehope said.

According to Stephen Spring, chief executive of Australian Retail Lease Management, the amendment is a warning shot to ensure some landlords don’t take advantage of the situation the industry finds itself in.

“It means that until there is a national response, tenants and landlords are in a holding pattern,” Spring told Inside Retail.

“The important thing to remember is that this doesn’t instantly protect retailers. All it means is that the Minister can have the discretion to work out what is going on in the industry and can pass a law almost instantly.”

The amendment will essentially act as a stop-gap measure, which Spring believes will likely be replicated in other states in the coming days, until a national framework is decided upon and rolled out.

“I think the Prime Minister wants a national response so that all renters are treated equally, whether residential or commercial,” Spring said.

While many other states have yet to announce their own individual measures, Tasmania has proposed a change in local rental law to give “no effect” to rent arrears or eviction notices for an emergency period of 120 days, according to an ABC report.

Spring said he didn’t feel there is currently much appetite to abate arrears, but that evictions needed to be stopped.

“I would certainly think that this would need a national approach.”

What to do from here?

Spring said that while the measure has put landlords and tenants at a standstill, he recommends retailers begin making a record of interactions between themselves and landlords around leasing and rent.

“[The idea is] when the dust settles there is strong factual evidence that shows how some landlords may be treating the industry differently,” Spring said.

“Make sure you take notes as you go. Those are the kind of things that will be useful, not just for their own individual negotiation but for the industry as a whole.”

This article first appeared on Inside Retail, a sibling publication to Inside Franchise Business.