On 28 July 2021, the Victorian Government announced the reintroduction of the Commercial Tenancy Relief Scheme (Scheme). The Scheme was implemented to provide rent relief for retail and commercial tenants impacted by the effects of the COVID-19 pandemic and operated from 29 March 2020 to 28 March 2021.
The Commercial Tenancy Relief Scheme Regulations 2021 (Vic) (Regulations) applying the Scheme were released on 24 August 2021.
With the reintroduction of the Scheme, retail and commercial tenants will benefit from rent relief if they meet the eligibility criteria under the Regulations. See our summary of the Regulations here.
Under the Scheme:
- tenants will only need to satisfy the eligibility test once in order to receive assistance
- SME tenants with an annual turnover under $50 million will be eligible if they satisfy the "decline in turnover test" (such as their turnover has dropped by more than 30 per cent due to COVID-19)
- rent relief for eligible tenants will be calculated by comparing their turnover in accordance with the "turnover test period" (such as, for the final quarter of the 2020/21 financial year with their turnover for the final quarter of the 2018/19 financial year or one of a number of alternatives)
- existing deferred rent repayments pursuant to any rent deferral agreement made under the previous Scheme will be frozen up till 15 January 2022, and added to the deferred rent accrued during the current Scheme
- rent increases between 28 July 2021 and 15 January 2022 are prohibited unless agreed otherwise
- mediations between landlords and tenants will be facilitated by the Victorian Small Business Commission
- eligible landlords may receive tax relief
- landlords who can demonstrate acute hardship will be eligible to apply for payments as part of a $20 million hardship fund
- the protections will apply retrospectively to start from 28 July 2021.
We will continue to update this article with commentary as the Scheme develops. If you have any questions, please contact us.
Authors: Chris Brodrick & Alana Giles
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 article is accurate at the date it is received or that it will continue to be accurate in the future.