On 3rd August the Andrews Labor Government issued legislation to make it a requirement for landlords to help eligible businesses that have endured a serious trading downturn due to no fault of their own.

 

Support for tenants

*update* 
You have until 30 September 2021 to apply to your landlord if you are eligible for rent relief from 28 July 2021.
We do not want you to miss this deadline.

Any applications after 30 September 2021 will not receive any rent relief for prior to the application.

The Scheme will be available to businesses with an annual turnover of less than $50 million and have suffered a decline in turnover of at least 30 per cent due to coronavirus.

Rent relief for eligible businesses will be calculated by comparing their turnover for the final quarter of 2020–21 with turnover from the final quarter of 2018–19. The percentage drop will determine the amount of initial rent relief.

For example, a business with a turnover of 40 per cent of pre-pandemic levels can only be charged 40 per cent of its rent.

Of the balance, at least half must be waived, with the remainder to be deferred.

If you don’t know how much your business’ turnover has dropped, please seek out your Accountant, they will be able to help you.

 

What if my business was not operating in 2019?

The Government is ensuring new businesses don’t miss out on this assistance. Special arrangements are in place to assess the turnover impacts for new businesses which were not operating in 2019.

Eligible tenants who traded before 1 April 2019 can assess their turnover from any three consecutive months between 1 April 2021 and 30 September 2021 to the corresponding turnover in the same three months in 2019. This will determine if there has been a decline.

 

Reassessment of rent relief

If the request for rent relief was by 30 September 2021 and the tenant began trading before 1 April 2021, there is a mandatory reassessment of rent relief:

  • The tenant must provide information for the reassessment by 31 October 2021;
  • Any change in turnover will be adjusted for the remainder of the rent relief period;
  • If a tenant fails to provide the reassessment information by 31 October 2021, the tenant will lose their entitlement to rent relief from 31 October 2021, unless otherwise agreed or if the tenant is unable to trade due to sickness, injury or natural disaster.

 

What about rent increases?

There is a freeze on rent increases and evictions for not paying rent, which are banned until 15 January 2022, where the tenant is eligible.

 

What are the dates?

The protections, which will include tenant protections against eviction, will be backdated to start from when the Scheme was announced on 28 July 2021 for those that apply before 30 September.

The Commercial Tenancy Relief Scheme will close on 15 January 2022.

 

What do I need to do?

Tenants and landlords are encouraged to enter negotiations directly, with the VSBC available to provide mediation if parties cannot reach a satisfactory agreement.

When a tenant requests rent relief from their landlord, the request must be in writing.

The tenant must provide evidence of its decline in turnover to support its application for relief within 14 days of applying to the landlord for relief.

The application for relief to the landlord must be accompanied with a statutory declaration from the tenant stating that the tenant:

  • Is eligible under the Scheme; and
  • The information provided in the tenant’s application for rent relief is true to the best of the tenant’s knowledge.

Tenants can use the VSBC’s letter templates to guide them in requesting rent relief.

These optional templates can be found here:

  • option 1 – a letter for making a single, complete request
  • option 2 – a letter for making an initial request and a further letter for supplying the required evidence.

Support for landlords

To help landlords that are doing the right thing by eligible tenants, the Government will provide land tax relief of up to 25 per cent, in addition to any previous relief, at an estimated cost of $100 million.

Small landlords who can demonstrate acute hardship will be eligible to apply for payments as part of a $20 million hardship fund.

Details on this have been released and can be found here.

 

More information

The government press release can be read here.

The Victorian Small Business Commission have also provided quite an extensive list of FAQ’s which can be read here.

 

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