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Eligible commercial tenants across Victoria will be provided rent relief with the reintroduction of the Commercial Tenancy Relief Scheme.
The legislation to reintroduce the Commercial Tenancy Relief Scheme was approved by the Parliament last week, 5 August 2021.
Under the scheme, businesses that have experienced a loss in turnover of more than 30 per cent during the pandemic are now guaranteed rent reductions.
The rent relief will be proportionate to the business’s reduction in turnover when comparing the final quarter of the 2020–21 financial year and that of 2018–19.
For example, a business seeing turnover of 40 per cent of pre-pandemic levels can only be charged 40 per cent of their rent. Of the remaining balance (the 60 per cent), half will be waived while the remainder will be deferred.
While tenants and landlords are encouraged to enter negotiations directly, the Victorian Small Business Commission (VSBC) will reportedly be available to mediate should parties be unable to reach an agreement.
The protections will be backdated to start from when the announcement was first made last Wednesday, which means commercial landlords are now prohibited from issuing an eviction notice for eligible tenants without obtaining a direction from the VSBC.
“Tenants and landlords have already been working together really well and we’d encourage them to continue to do so to achieve fair outcomes,” according to Minister for Small Business Jaala Pulford.
In order to ensure that new businesses don’t miss out on the assistance, the government has placed special arrangements to assess the turnover impacts for new businesses which were not operating in 2019.
Support for landlords
The government has also announced support for landlords who do aid their tenants.
Landlords assisting eligible commercial tenants will be provided a land tax relief of up to 25 per cent, in addition to any previous relief, with the cost estimated to be around $100 million.
In addition, small landlords who can demonstrate acute hardship may be eligible for payments as part of the government’s $20 million hardship fund.
“This passing of this legislation provides peace of mind for small businesses who are struggling to pay the rent, giving them the security they need,” Ms Pulford concluded.
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