- The Victorian Government has extended the Commercial Tenancy Relief Scheme (the Scheme) until the end of this year.
- The relevant scheme period now ends on 31 December 2020, and an eligible lease still requires the tenant to be an entity entitled to a Jobkeeper payment.
Agreements made before 29 September 2020 still apply. If a tenant seeks further rent relief for the period 29 September 2020 to 31 December 2020, then they will need to make a further request to their landlord providing the required information under the extended Scheme.
The Landlord is only required to provide relief from the date the tenant requests relief. For example, if a tenant requests rent relief on 15 October 2020 and provides the information required in the Regulations then their landlord is only obliged to provide rent relief from 15 October 2020 and not from 29 September 2020.
Commercial landlords will be required to provide rent relief in proportion to the fall in turnover being experienced by eligible tenants from the date a tenant makes a written application to their landlord within the period 29 September 2020 to 31 December 2020 (for example, if a tenant’s turnover has fallen by 40 per cent, the required rent relief is at least 40 per cent of the tenant’s current rent, with at least 50 per cent of the rent relief offered made up of a rent waiver). To apply for rent relief for October to December 2020, it is not necessary to wait for turnover information for those months however, it may be prudent to seek agreement to reassess the tenant’s turnover once restrictions are lifted if the original relief offer is based on data when the tenant was closed.
The previous requirement that an offer must also take into account the landlord’s financial ability to offer rent relief is removed.
Subsequent rent relief requests now entitle the tenant to request rent relief again in the form of both waivers and deferrals where the tenant’s financial circumstances have materially changed, or the previous arrangement was not compliant with the proportionality requirement, or did not apply to the whole period ending on 31 December 2020.
Repayment of deferred rent must now not be requested until 31 December 2020, unless the parties otherwise agree in writing, and this applies to rent deferred under existing rent relief agreements.
The ban on evictions and rental increases remains in place until 31 December 2020.
The landlord must still respond to the tenant’s request for rent relief within 14 days.
The Victorian Small Business Commission are offering free mediation to tenants and landlords who cannot reach agreement. The VSBC also has the power to make binding orders for rent relief if a landlord fails to respond or does not engage in mediation in good faith.
Further information on the scheme including information the tenant must supply is detailed on the VSBC website.
Written by Bill DiDonna
After some 35 years as a commercial property manager, Bill has a strong knowledge of Melbourne’s suburban property market.