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The Commercial Landlord Hardship Fund

The current climate is hard on Tenants and Landlords alike.  People tend to forget that rental income could be the only source of income for many Landlords.

Under the current Retail and Other Commercial Leases (COVID-19) Regulation 2021 (the Regulation), a Landlord is required to provide eligible Tenants rent relief.  Little thought is given to how a Landlord will continue to meet their own commitments while meeting their obligations to their tenants, including operating expenses, their mortgage commitments and repairs and maintenance.

Some Tenants are aware that Landlords could be entitled to financial relief through their Land Tax and assume this will be the case with their Landlord.  However, not all Landlords will be eligible for this relief as their total taxable land holdings value does not exceed the “General Threshold” under the land tax guidelines.

Services NSW website has information available with guidelines on assistance that will help Landlords apply for Government grants if the Land Tax relief does not apply to them.

Full details and the Terms and Conditions of the Commercial Landlord Hardship Fund – Guidelines can be found by using the link below.  However, Pure Property Management recommend that you speak with your accountant or Services NSW for further information and clarification for eligibility.

https://www.service.nsw.gov.au/commercial-landlord-hardship-fund-guidelines

 

Here is an excerpt of information that might be helpful:

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

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

 

1. Eligibility criteria

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

a) 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;

b) have not claimed land tax relief for the relevant property for rent reductions between 1 July 2021 and 31 December 2021;

c) 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;

d) be a landowner of the property for which an application is made;

e) be the landowner of a New South Wales property subject to the Retail and Other Commercial Leases (COVID-19) Regulation 2021;

f) 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

g) attest that providing rent relief to the tenant(s) may cause financial hardship.

 

2. How to apply

2.1 Applicants must apply online via the Service NSW website.

a) All questions in the application form must be answered to enable timely assessment and grant payment.

b) The Commercial Landlord Hardship Fund will open for applications in October 2021.

 

3. Application evidence required

3.1 Applicants must attach a copy of one of the following documents to confirm the property location, land value and income:

a)   a 2020 or 2021 Land Tax Assessment Notice

or

b) a 2020-21 Rates Notice

and

c) 2019-20 Income tax return for the relevant entity

 

3.2 Applicants must attach a copy of the current lease agreement (or other suitable documents where not available) with their tenant(s) showing:

a) the total value of pre-COVID rent

b) tenant(s) contact details

c) tenant(s) Australian Business Number(s) or Australian Company Number (ACN).

 

3.3 Applicants must submit written details of the rent relief agreed between landlord and tenant(s), including:

a) rent relief start and end dates

b) total value and per cent of rent deferred

c) total value and per cent of rent waived.

 

3.4 Applicants must submit details of one of the following as confirmation of identify:

  1. Driver Licence
  2. Medicare Card
  3. Health Care Card, Pensioner Care Card
  4. Australian Visa; or
  5. Where the applicant is not an Australian entity/citizen/resident documents showing you are the owner and/or authorised representative for the impacted lease.

 

3.5 Applicants will be required to attest that:

a) they meet the Commercial Landlord Hardship Fund eligibility criteria;

b) the information provided in the application is true and correct;

c) a current lease agreement is in force and is subject to the Regulation;

d) they hold the written consent of the tenant to provide business and contact details;

e) the rent reduction has or will result in financial hardship to the applicant; and

f) they acknowledge and understand the NSW Government reserves the right to recover any grants paid if any application information is found to be false or misleading, or the grant is not used in accordance with the terms of funding set out in these guidelines.

 

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