Update on Further Rent Relief for Commercial Tenancy in Victoria

The Commercial Tenancy Relief Scheme Regulations (“the 2022 Regulations”) came into effect on 1 February 2022.

They require a landlord to offer rent relief proportionate to an eligible tenant’s decline in turnover.

We recommend that any request for rent relief under the 2022 Regulations be made as soon as possible.

Process for Obtaining Relief

An eligible tenant may be entitled to relief for the period 16 January 2022 to 15 March 2022, provided that it makes a request and provides necessary evidence before 15 March 2022.

Eligible Tenant

To be eligible, a tenant must satisfy particular criteria set out in the 2022 Regulations.  For example, the tenants must be:

  • an entity with turnover in 2020/2021 of less than $10,000,000;
  • as at 16 January 2022, carrying on a business in Australia (or have been a non-profit body or deductible gift recipient);
  • is not an excluded tenant or certain prescribed class of tenant; and
  • satisfy the Decline in Turnover Test (see below).

Decline in Turnover Test

The application of the Decline in Turnover Test effectively remains the same as the 2021 Regulations. The tenant must have experienced a decline in turnover of 30% or more due to Covid-19. However, the turnover test period is now the month of January 2022 and the comparison period is the month of January 2020.

Further, tenants’ businesses that were closed for a week or more during January 2020 (due to an event or circumstance outside their usual operations) and started trading again before 16 January 2022 will be required to use the turnover test period of December 2021 with the relevant comparison period of December 2019.

A tenant can also use an Alternative Comparison Turnover if the tenant started its business on or after 1 January 2020, there was an acquisition or disposal or restructure of their business, the business has been affected by natural disaster, or they are a sole trader or small partnership without employees who, due to sickness, injury or leave, did not work for all or part of the relevant comparison period and their turnover was affected as a result.

Under the 2022 Regulations, the payment of the deferred rent under the previous agreement has been extended to 15 March 2022.

Please contact Wisewould Mahony’s Licencing and Leasing Team for advice and representation in relation to Commercial Tenancy:

Nick Lavender, Partner: (03) 9612 7291, nick.lavender@wisemah.com.au

Cain McGirr, Partner: (03) 9612 7328, cain.mcgirr@wisemah.com.au

Paul Ryan, Partner: 0418 393 535, paul.ryan@wisemah.com.au

Julie Barkla, Partner: 0412 003 221, julie.barkla@wisemah.com.au

Tony Joyce, Consultant: (03) 9612 7348, tony.joyce@wisemah.com.au

Frank Field, Consultant: (03) 9612 7345, frank.field@wisemah.com.au

Diana Ting, Senior Associate: (03) 9612 7361, diana.ting@wisemah.com.au