The Victorian government has introduced new legislation today to provide rent relief to commercial tenants that have experienced a loss in turnover of more than 30 per cent during the pandemic.
Rent relief will be calculated by comparing turnover for the final quarter of the 2020/21 financial year with turnover from the final quarter of 2018/19.
If the decrease in turnover is greater than 30% due to the pandemic, relief is available based on that percentage drop.
The protections are backdated to 28 July 2021. Eviction notices for eligible tenants cannot be issued without a commercial landlord first obtaining a direction from the Victorian Small Business Commission (VSBC).
Eligibility is a once-off test. Businesses which are eligible at the beginning of the scheme will remain eligible throughout, with the proportion of rent relief adjusted in line with their turnover.
Special arrangements will be in place to assess the turnover impacts for new businesses which were not operating in 2019.
A mandatory reassessment of turnover further into the new scheme is said to support fair treatment for all parties.
If there is also an agreement already in place from the first scheme announced in 2020, existing deferred rent repayments will be frozen until 15 January 2022, when the outstanding amount will be added to the deferred rent accrued during the current scheme.
Land tax relief of up to 25% will be available to landlords who provide assistance under the scheme (in addition to any previous relief) at an estimated cost of $100 million.
Small landlords may also apply for additional relief under a $20 million hardship fund.
If parties cannot agree on a suitable outcome, the tenant or landlord can ask the VSBC to convene a mediation in an attempt to resolve the matter.
If you would like assistance on what the scheme means for you, please do not hesitate to contact us.
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