The Victorian Government has introduced new regulations as part of the Commercial Tenancy Relief Scheme to assist commercial tenants struggling with rent payments during the Covid-19 pandemic.

The scheme will assist businesses with an annual turnover of less than $50 million that have experienced a loss of more than 30 percent.  

Rent relief for eligible tenants will be calculated by comparing their turnover for three consecutive months between 1 April and 30 September 2021 with turnover from the same three months in 2019.

The percentage drop in turnover will determine the amount of rent relief available to the tenant. For example, a business which has experienced a loss in turnover of 40 percent can only be charged 60 percent of its rent. A minimum of half of the outstanding rent must be waived, with the remainder to be deferred.

Where a tenant requests rent relief from their landlord, the request must be made in writing and accompanied by:

  • a statement from the tenant that they are an eligible tenant;
  • a statement that the tenant satisfies the decline in turnover test; and
  • a statutory declaration made by the tenant or its authorised officer stating that the tenant is an eligible tenant and that the information provided is true.

The tenant must provide the statutory declaration to the landlord within 14 days of making their rent relief request. If the tenant fails to do so, then that request will lapse and the tenant will be required to make a new request for rent relief. If the tenant allows three requests to lapse, then the tenant is barred from any further requests for rent relief under the scheme.

Tenant’s can use the Victorian Small Business Commission (VSBC) letter templates to assist with their requests.

The Victorian Government will put special arrangements in place to ensure new businesses that were not operating in 2019 are still eligible for rent relief.

The Government will also assist landlords who are doing the right thing by eligible tenants, by providing land tax relief of up to 25 percent in addition to any previous relief.

The scheme will apply retrospectively from 28 July 2021 and will end on 15 January 2022.

During this time, landlords cannot evict eligible tenants without obtaining a direction from the VSBC.

Eligible tenants and landlords are encouraged to enter into negotiations as soon as possible, with the VSBC available to provide mediation where parties are unable to reach an agreement.  

If landlords or tenants are experiencing issues relating to rent relief, or would like further information, then please contact Pacific Law (VIC) for assistance.