As the year draws to a close, the phrase “the more things change the more they stay the same” is in a lot of ways an appropriate comment to make, especially when I see what is going on in when it comes to the issue of claims for rental relief due to COVID-19.
The passing of the Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 (“the New Regulation”). It’s a case of more of the same.
Continuity from Earlier Regulations
The New Regulation inherits the same framework as existed in the earlier set of rental relief regulations that commenced on 24 April 2020 and automatically repealed on 23 October 2020, namely:
- There is the same threshold test as to whether a tenant is an impacted lessee, in order for the regulations to apply;
- An impacted lessee cannot be subject to actions such as eviction, damages, enforcement of guarantees, etc due to failure to pay rent or outgoings or not opening for business during the hours specified in the lease;
- No rental increases for impacted lessees;
- Parties are to renegotiate the rent payable in accordance with the National Code of Conduct – this means rental relief on the basis of the fall in turnover of the impacted lessee, in the form of a minimum of 50% waiver and 50% deferral of rent; and,
- Compulsory mediation if the parties cannot resolve their issues.