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Update: Retail or commercial leases in Victoria and COVID-19 – legislative amendments

16 September 2020

#Property & Real Estate, #COVID-19

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Update: Retail or commercial leases in Victoria and COVID-19 – legislative amendments

On 15 September 2020, the Victorian Parliament passed the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020, which amends the COVID-19 Omnibus (Emergency Measures) Act 2020 (Omnibus Act) (discussed in our previous article here) and provides for the commencement of the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Act 2020 (Act).

New regulations

The Act extends the operation of Part 2.2 of the Omnibus Act, giving the government power to make regulations which may temporarily modify laws relating to leases and licences until 26 April 2021. Part 2.2 of the Omnibus Act was due to come to an end on 24 September 2020.

As at the time of publishing this article, we have not seen any new regulations. As the ‘relevant period’ during which Victorian landlords are obliged to provide rent relief in certain circumstances is due to end on 29 September 2020 and metropolitan Melbourne remains in lockdown, we expect that new regulations will be published shortly.

The Act will permit regulations to be made which deal with the following matters:

  • the making of ‘binding orders’ directing landlords to give or agree to specified rent relief (defined to mean a waiver or deferral)
  • the process by which tenants may apply for binding orders (‘rent relief applications’)
  • the process for deciding rent relief applications, including the criteria to be applied
  • the process for amending or revoking binding orders, including the criteria to be applied and correcting errors
  • the enforcement of binding orders in cases of non-compliance
  • pre-conditions to be met before a person may commence a proceeding in the Victorian Civil and Administrative Tribunal in respect of non-compliance with binding orders.

It is anticipated that the Victorian Small Business Commission will be given power to make binding orders and deal with rent relief applications.

Meaning of ‘eligible lease’

The Act amends the definition of ‘eligible lease’ from a lease held by a tenant which is an SME entity and an employer who qualifies for and receives JobKeeper payments to “a retail lease or non-retail commercial lease or licence, or a retail lease or a non-retail commercial lease or licence of a specified class that is prescribed.”

The new regulations will no doubt shed further light on this, but the second reading speech suggests that the modifications to the definition of ‘eligible lease’ are likely to remove the requirement for tenants to be employing businesses, such that sole traders, not-for-profit businesses and franchisees may be eligible to receive rent relief if they are JobKeeper participants.

Further updates

We will publish a further update once the new regulations are released. 

Authors: Chris Brodrick & Alana Giles

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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