The Victorian Government is in the process of introducing a new Commercial Tenancy Relief Scheme (Scheme) to assist commercial landlords and tenants as a result of the COVID-19 pandemic.
This is welcome relief for tenants but landlords also have access to relief this time around to help offset the concessions that need to be made to tenants.
The Regulations introducing this new Scheme are imminent, but at the time of writing this article have not yet been enacted and published.
the rent is reduced by 60%;
the landlord can only charge 40% of current rent; and
in relation to the reduced 60% rent, half must be waived and the other half must be deferred.
The procedure for applying for rent relief under the new Scheme has not yet been published.
Notwithstanding this, tenants who consider themselves to be eligible for rent relief under the new Scheme should:
Our strongest advice is not to do this alone. We have had great success in assisting in achieving favourable outcomes under the previous rent relief scheme. These outcomes are generally not obtainable without well-informed and capable legal representation.
We act for both tenants and landlords, which is helpful to our clients. As we understand both perspectives this means that we can negotiate better outcome for the party for whom we act. From experience we can easily relay the risks and benefits associated with action, or inaction, for both parties under the scheme.
Landlords should enter into good faith negotiations with their tenant, where the tenant has requested rent relief under the new Scheme and provided evidence of its eligibility to do so.
Landlords should ensure that they apply for land tax relief as soon as such applications can be made.
“Small landlords” should apply for hardship payments as soon as such applications can be made. Please note that at the time of drafting this article, the meaning of “small landlord” was not defined in any government or other commentary.
PCL Lawyers can assist landlords with all the above, including negotiating rent relief with tenants, drafting and settling a rent relief agreement and representing landlords at any VSBC mediation.
Lease disputes can arise between the landlord and tenant on a variety of issues. We have helped tenants negotiate with difficult landlords and vice versa.
Preparation for mediation is necessary and representation is critical in achieving the most favourable outcome – as adjustments in your favour can amount to many thousands of dollars.
That said, the landlord / tenant relationship is ongoing and the longevity of your business premises for tenants to consider. For landlords it may impact the value of your premises and loss of income. Negotiations are best handled wisely and with sensitivity.
The VSBC process also experiences significant delays. Our lawyers have assisted many tenants and landlords resolve their leasing issues before having to attend a mediation.
We can also help if mediation is unsuccessful, and you require further legal help.
Contact one of our leasing team for further advice on how these regulations apply to you. We are experts in this space.
Our legal team are here to support you with leasing issues and questions, as well as other business-related legal areas such as employment law.
We are up to date with the latest information and changes to the legislation.
Contact us today on 8397 5000 or by completing the contact form on this page for a prompt response.
Please note: The above is not intended to be legal advice. Every circumstance is different. Always seek legal advice in relation to your individual situation.
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Chris is an Accredited Commercial Law Specialist and has extensive experience in dealing with a wide range of complex commercial,...