Extension of the Commercial Tenancy Relief Scheme

Aug 21, 2020

Although it has always been clear that the National Mandatory Code of Conduct (Code) would apply during ‘the period during which the JobKeeper program is operational’ (which is now until 31 March 2021), it was unclear about whether the Victorian COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Regulations), which currently expire on 29 September 2020, would be extended in light of Melbourne and Victoria being under Stage 4 and Stage 3 restrictions until mid-September 2020.

The Victorian State Government has now announced an extension of, and various changes to, Victoria’s Commercial Tenancy Relief Scheme.

The key points that we know so far are as follows:

  • Prohibitions on evictions and rent increases will be extended until 31 December 2020 (except in specific circumstances, which are yet to be clarified).
  • The Scheme will now mandate that landlords offer rent relief which is proportionate to the reduction in the tenant’s turnover. This change is reflective of the ‘Victoria’s commercial tenancies relief scheme: Policy guidance on eligible participants and documentation requirements’, which until now has offered guidance to parties in determining appropriate rent relief, but was not law.
  • The Victorian Small Business Commission will now have a new power to make an order on rent relief if a landlord refuses to respond to rent relief requests.  The VSBC does not have such power under the current Regulations.

It is anticipated that the Regulations will be amended in view of the above changes.

However, what is not clear from the State Government’s announcement, is whether or not the “relevant period” to seek rent relief under the Regulations will also be extended to the end of the year.

So we eagerly continue to wait for a decision or clarification in this regard.