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News 16 October 2020

Important updates to Commercial Tenancy Relief Scheme

The Victorian Government has extended the Commercial Tenancy Relief Scheme (the Scheme) until 31 December 2020 and made multiple changes to the Scheme, including the eligibility of sole traders.

Amendments to the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Miscellaneous Amendments Regulations 2020 will see significant changes to rent relief arrangements.

Under these changes, if a tenant seeks further rent relief for the period 29 September 2020 to 31 December 2020, they will need to make a further request to their landlord for rental assistance.

Summary of changes

One of the major amendments to the scheme is sole traders becoming eligible.

In other changes, 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.

Tenants can now apply to the Victorian Small Business Commission for a binding order for rent relief if their landlord fails to respond or does not engage in mediation in good faith.

Lastly, the VSBC will keep offering free mediation to tenants and landlords who cannot reach an agreement.

Evidence needed for applications

Applications for rent relief (including new and further requests for rent relief and any request for relief relating to outgoings) must be accompanied by:

  • a statement confirming that your business is a small to medium enterprise with a turnover under $50m.
  • a statement that your lease is an eligible lease and is covered by the Commercial Tenancy Relief Scheme.
  • evidence that you are taking part in the JobKeeper scheme.
  • a statement of your decline in turnover associated with your premises only (expressed as a whole percentage and calculated using the actual decline in turnover test) that includes at least one of the following:
    • extracts from your accounting records, or;
    • your business activity statement(s) that relate to the relevant turnover test period, or;
    • statements issued by an authorised deposit-taking institution (e.g. a bank) that relate to your account, or;
    • a statement prepared by a practising accountant.

Further information

Further information on these changes, and the process for applying including a templated letter that a tenant can send to their landlord to request rent relief, is available from the Victorian Small Business Commissioner’s website

 

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MCC Contact

Get in touch with the Melbourne Chamber of Commerce

03 8662 5214

members@melbournechamber.org.au

 

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