FURTHER RELIEF FOR TENANTS OF COMMERCIAL LEASES
11 September 2020Amendment to COVID Commercial & Residential Tenancies Rent Relief
The COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020 (“Bill”) has passed the Victorian lower house and provides for the extension of rent relief provisions, initially enabled by April’s COVID-19 Omnibus (Emergency Measures) Act (“Omnibus Act”) and accompanying Regulations.
As a snapshot, this Bill seeks to make the following amendments:
To extend the ‘relevant period’ to which rent relief applications apply for eligible leases, which is due to expire on 30 September 2020, to 26 April 2021;
To broaden the definition of what constitutes an “eligible lease”;
To provide the VSBC and VCAT with additional order making powers.
The stated purpose of the Bill is:
a) To amend the COVID-10 Omnibus (Emergency Measures) Act 2020 –
i. To extend the operation of Part 2.2 of the Act under which regulations may be made to modify the law relating to retail leases and non-retail commercial leases and licences until 26 April 2021; and
ii. To make further provision in relation to the subject matter of regulations which may be made under Part 2.2 of that Act, including the making of orders directing landlords under eligible leases to give or agree to give specified rent relief to tenants under eligible leases and conferring jurisdiction on VCAT to enforce such orders…
As noted above, the operation of the commercial tenancy rent relief period would be extended by the Bill. It is unclear why this period has been extended until the end of April or, indeed, beyond the end of this year.
Further, the “eligible lease” definition has been broadened. As we detailed in our earlier Omnibus review blog, an “eligible lease” requires the tenant to be an SME and eligible for, as well as a participant in the Federal Government’s JobKeeper scheme. This definition creates problems for tenants who are sole traders or operate a service company, and, unlike the requirements of the Federal Government’s Code of Conduct, necessitates active participation in JobKeeper rather than mere qualification. In any case, the amendments provided by the Bill should allow for a greater range of SME tenants to apply for rent relief.
In accordance with the Premier’s announcement on the VSBC’s ability to make orders for rent relief, the Bill allows for “the making of orders directing landlords under eligible leases to give or agree to specified rent relief to tenants under eligible leases (binding orders) and the content of such orders;
The process for applications by tenants under eligible leases for binding orders (rent relief applications) including the content of rent relief applications and documents that may accompany rent relief applications.”
We presume the new regulations will specifically attach these powers to the VSBC. The review and enforcement of binding orders by VCAT is also enabled by the Bill.
As the Bill is yet to be finalised, we will provide a further update once available, but recommend considering your financial positions and how these amendments affect you. Please contact us immediately with any questions in respect of these updates and in particular, where you require further amendments to be made to existing lease arrangements.
KKP Comment:
The changing landscape of commercial tenancies in Victoria necessitates reflection on your rights, entitlements and obligations in lease agreements. The team at Kerr & Kerr Partners are experts in advocating for both landlords and tenants and have consistently achieved positive results in seeking or responding to requests for rent relief.