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Government extends Commercial Tenancy Relief Scheme

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By Alicia Hill, Principal

The Victorian Government has announced that the Commercial Tenancy Relief Scheme (the Scheme) will be extended to 28 March 2021.

From 1 January 2021, when the extension will take effect, if you want to request rent relief for the period 1 January 2021 until 28 March 2021, you will need to make a new written application to your landlord on or after 1 January 2021, providing  all the necessary information required by the extended Scheme.

This is needed, even if you provide the information to the landlord with a previous request and or have applied to the VSBC for help to resolve a rent relief dispute that spans a period before and after the extension to the Scheme.

Under the extended Scheme, a tenant will only be able to receive rent relief from the date they make a written application to their landlord that contains all of the required information. This means it is important for a tenant to apply to their landlord for rent relief as soon as possible on or after 1 January 2021 (not before). For example, if a tenant requests rent relief on 1 January 2021 but does not provide all of the necessary information until 15 January 2021, then their landlord is only obliged to make a rent relief offer from 15 January 2021.

The Victorian Small Business Commission’s (VSBC) website includes the information a tenant must provide to their landlord when requesting rent relief and a letter template that tenants can use to guide their request.

Under the extended Scheme, a commercial landlord will be required to offer rent relief within the period 1 January 2021 to 28 March 2021 that is in proportion to the fall in turnover experienced by their eligible tenant.

For example, if a tenant’s turnover has fallen by 40 per cent, the required rent relief is to be at least 40 per cent of the tenant’s current rent, with at least 50 per cent of the rent relief made up of a rent waiver. To apply for rent relief for January to March 2021, it is not necessary to wait for turnover information for those months. Instead, the regulations require that the tenant provides evidence of their drop in turnover by comparing turnover for the quarter ending 31 December 2020 to the same period in 2019.

Part of the Commercial Tenancy Rent Relief scheme is free mediation for landlords and tenants through the VSBC if issues become intractable.

If you have any questions, please contact please contact Alicia Hill on (03) 8540 0292 or alicia.hill@mst.com.au or Evelyn Marcou on (03) 8540 0243 or evelyn.marcou@mst.com.au.

For those looking to take control of this themselves, you access the VSBC.