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As the Commercial Tenancy Relief Scheme ends, what options remain available to commercial tenants?

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By Nasiya Goldberg, Senior Associate and Evelyn Marcou, Principal


 In 2020, the Victorian government introduced emergency relief measures to address the financial impact of COVID-19 on commercial, retail and office tenancies.  Initially intended as a short-term scheme running from 29 March 2020 to 28 March 2021, the Commercial Tenancy Relief Scheme (the Scheme) introduced rent relief and protections for commercial and retail tenants.  The Scheme was varied and extended several times and eventually expired on 15 March 2022. 

Landlords are no longer required to provide rent relief to tenants in response to requests made after 15 March 2022.  With the rising costs of produce and labour, some businesses are struggling to meet their financial obligations under their leases to pay rent and deferred rent.  A failure to pay rent amounts to a breach of the lease and can lead to a landlord terminating the lease and locking out the tenant.

This leaves many commercial tenants wondering what options remain available if they are struggling to meet their financial obligations under their lease. 

Options available

 Many Victorian commercial and retail businesses continue to face significant financial challenges despite the end of Covid-19 lockdowns.  The Australian Bureau of Statistics reported on 23 June 2022[1] that nearly half (46%) of all businesses experienced increases in their operating expenses; more than two in five businesses (41%) faced supply chain disruptions and almost a third of employing businesses (31%) are having difficulty finding suitable staff.

As tenants are no longer entitled to rent relief under the Scheme, this article considers some practical options available for commercial and retail tenants experiencing continued financial hardship.

  1. Tenants can approach landlords direct to discuss their individual situation and to request rent relief. Tenants are encouraged to provide supporting evidence which demonstrates their difficulty in paying rent and any fall in turnover, such as:
  • extracts from the tenant’s accounting records;
  • the tenant’s business activity statement;
  • bank statements that relate to the tenant’s account; and
  • a statement prepared by a practising accountant.

Ultimately, since the expiry of the Scheme, landlords are not required to grant rent relief to tenants.  Accordingly, any negotiations are on a case-by-case basis and subject to the landlord’s sole discretion.  It is important to note that in events of non-payment of rent, landlords are entitled to enforce their rights under the lease and in some cases, the retail leasing legislation. 

  1. Tenants who are unsuccessful in direct negotiations with landlords (or who are unable to obtain a response to their request for rent relief) can apply to the Victorian Small Business Commission (VSBC), which offers a range of free or low-cost resources, including guidance in negotiating rent relief with landlords and dispute resolution services. In some circumstances, VSBC can provide assistance early on and can arrange low-cost and impartial mediation between eligible landlords and tenants.  At mediation, eligible parties will be supported in negotiating leasing arrangements.
  2. Free financial counselling and business advice is available for Victorian businesses from Partners in Wellbeing, which can assist by reviewing business finances and negotiating affordable repayment plans including arrears in rent and occupancy costs if required.
  3. The Australian Banking Association portal offers a range of services to eligible commercial tenants, including in some instances a deferral of scheduled loan repayments and waiving some fees and charges.
  4. MST’s Property and Leasing team can assist by providing practical advice to commercial and retail tenants who are struggling to navigate lease compliance due to financial hardship.


Although the Commercial Tenancy Relief Scheme (the Scheme) expired on 15 March 2022, several options remain available to Victorian commercial and retail tenants who are suffering financial hardship including supply chain disruptions and increases in operating expenses. 

It is more important than ever that tenants seek legal advice as early as possible in relation to difficulty paying rent, negotiations with landlord regarding rent relief of lease surrenders, responding to eviction attempts.  The MST Property and Leasing team remain available to assist you with your property and leasing queries.  Please contact Nasiya Goldberg, Senior Associate on (03) 8540 0727 or Evelyn Marcou, Principal on (03) 8540 0243.

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The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.  MST Lawyers has no affiliation with the Victorian Small Business Commission, Partners in Wellbeing or the Australian Banking Association.

[1] https://www.abs.gov.au/statistics/economy/business-indicators/business-conditions-and-sentiments/latest-release