The government of New South Wales has extended rent protection to commercial tenants who have been impacted by the Omicron surge to keep businesses afloat, leaving the property industry with no choice but to catch the fall.
The protection covers businesses with a 30% reduction in an annual turnover under $5 million and will last until March 13. In these two months, landlords are prohibited from terminating leases when rent is overdue and are ordered to negotiate on rent relief instead.
However, the property industry has criticised the move as unnecessary and, to an extent, harmful to investors and landlords. Luke Achterstraat, executive director at Property Council NSW, found no reason for the government to intervene in commercial contracts when people are vaccinated and lockdowns are over.
“This decision should be seen for what it is: government intervention into legal contracts and a compulsory transfer of income from one business to another,” Achterstraat told The Sydney Morning Herald. “Such radical measures are not what ‘living with COVID’ is supposed to be about.”
“Property is the only private industry being legislated to support other private industry, with scant regard to the challenges faced by commercial property owners themselves,” Achterstraat added, citing the $15 billion worth of support the industry provided to commercial tenants in 2020.
However, NSW Treasurer Matt Kean stood by the government’s order to allow a buffer time for businesses to recover from very real supply and staff shortage problems.
“Small business is the engine room of our economy and we need to make sure we support impacted businesses through this latest Omicron wave,” Kean told The Sydney Morning Herald. “The ability to negotiate rent will [allow them to] keep the lights on now and recover more quickly.”
