Commercial tenancy relief for Victorian businesses
Following the recent re-introduction of temporary relief to tenants impacted by the current lockdown in NSW, the Victorian Government has announced that from 28 July 2021 the state‘s small and medium-sized businesses will again have the benefit of commercial rent waivers and deferrals.
The previous Commercial Tenancy Relief Scheme ended at the end of March 2021. The revived scheme, which is expected to run until January 2022, will again be available to businesses with an annual turnover of less than $50 million.
The business needs to have suffered a decline in turnover of at least 30% due to the pandemic to be eligible. Again, at least half of the relief granted must be by way of a waiver of rent, with the remainder to be deferred.
There will be a moratorium on termination of leases for failure to pay rent or failure to trade.
Also proposed is an $80 million hardship fund for landlords who provide rent relief to eligible tenants. There is no further detail on this fund as yet.
The initial relief scheme was a bit of a minefield and some landlords and tenants are still negotiating satisfactory outcomes. Eligibility of tenants was the source of some uncertainty and this is compounded this time around the JobKeeper scheme – to which eligibility was tied – is no longer in place. This will also affect how a decline in turnover is evidenced – there will need to be a different test in place.
New legislation will need to be passed to give effect to the scheme and we will provide a further update once a bill has been released.
The Minister for Small Business Jaala Pulford said in announcing the new scheme: ‘We’re calling for good-faith negotiations between tenants and landlords, and the hardship fund will mean landlords who find reasonable common ground will be supported.’
Please contact us if you require further assistance or advice.
You might be also interested in...
Property & Projects | 21 Jul 2021
The NSW Government last week introduced the Retail and Other Commercial Leases Regulation 2021 to give temporary relief to tenants impacted by the current lockdown in NSW.
Turnaround & Business Restructuring | 14 Jul 2021
COVID-19 has been great for some: online retail of home goods, clothes and exercise equipment and food delivery. But it has been harder on others.