Commercial Tenancies: Further COVID-19 Rent Relief Measures- 2021
In 2020 the State of Victoria passed legislation and supporting Regulations commonly referred to as the CTRS - Commercial Tenancy Relief Scheme that provided a framework for Landlords and Tenants to negotiate and achieve agreement on rent relief during the initial pandemic period from March 2020 initially to September 2020 and then extended to December 2020.
Many commercial Landlords and Tenants whose Leases fell within the framework set up under the initial scheme i.e. compliance with the Job Keeper regime that then existed, entered into agreements which were documented to various levels of detail where the parties agreed to waive part of the rent and defer part of the rent during the relevant periods involved.
Regrettably, COVID-19 has evolved and caused much greater and longer disruptions to our lives than was anticipated during 2020. Job Keeper ceased in March 2021 but regrettably lockdowns have again become part of the health regulations responses required in the State of Victoria since May to the current extending event.
On 5 August 2021 the Victorian Government passed an Act of Parliament for a new Commercial Tenancy Relief Scheme 2021 to take effect from 28 July 2021.
- On 25 August 2021 the Victorian Government passed regulations that set out how this latest Scheme will operate and it sets out a framework for identifying which leases will be potentially able to seek assistance under this new Scheme. It is available to tenants that have a turnover of less than $50 Million pa, that have experienced a reduction in their turnover of at least 30% based on the following table:
| If tenant operated business before 1 April 2019 | Tenant compares their turnover for any 3 month block between 1 April 2019 and 30 September 2019, to their turnover for the same 3 month block in 2021. | |
| If tenant commenced business between 1 April 2019 and 31 March 2020 | Tenant compares their average monthly turnover from when business commenced to 31 March 2020 (multiplied by 3), to their turnover in any 3 month block of turnover in the period 1 April 2021 to 30 September 2021. | |
| If tenant commenced business between 1 April 2020 and 31 March 2021 | Tenant compares their average monthly turnover from when business commenced to 31 July 2021 (multiplied by 3), to their turnover in any 3 month block of turnover in the period 1 April 2021 to 30 September 2021. | |
| If tenant commenced business on or after 1 April 2021 |
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This is far from straight forward and will require good faith negotiations between landlords and tenants.
If you believe you are involved in a Lease as Landlord or Tenant that may fall under these new Regulations, please contact the RNG Lawyers Property Law team on 9739 7377 so that we can provide you with advice.
