What does the extension of the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 mean for landlords and tenants in Victoria?

2 October 2020

Publications

The COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Regulations) which deals with the impact of COVID-19 on parties to a commercial lease, were due to expire on 29 September 2020.

However, from 29 September 2020 the Regulations were varied by the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Miscellaneous Amendments Regulations 2020 (Amending Regulations).

What does the extension mean for commercial landlords and tenants in Victoria?

  • The Amending Regulations extend the application of the Regulations to 31 December 2020. It should be noted that any new application for rent relief only applies from the date of the request for rent relief to 31 December 2020. A tenant must therefore ensure a compliant request for rent relief is made as soon as possible.
  • The landlord’s inability to terminate the lease for non-payment of rent has been extended to include non-payment of outgoings subject to the tenant’s compliance with the Regulations.
  • The tenant’s request for rent relief must now be accompanied by additional information, being evidence of the tenant’s participation in the JobKeeper scheme and evidence of the reduction in the tenant’s turnover in relation to the premises only.
  • A landlord’s offer of rent relief must be at a minimum, proportional to the tenant’s decline in turnover associated with the premises. Note the provision that the offer must take into account a landlord’s financial ability to offer rent relief, has been deleted by the Amending Regulations.
  • Any rent relief applies to gross rent and a landlord is not permitted to reduce any part of the gross rent attributable to outgoings before offering relief.
  • A landlord cannot request the payment of any deferred rent until 31 December 2020 at the earliest.
  • The Small Business Commissioner (SBC) now has the power to make a binding order on a landlord to give specified rent relief. This can only occur though where the SBC considers the landlord has not responded to a request for rent relief or has not negotiated in good faith as required by the Regulations and the tenant has not commenced proceedings in VCAT or a Court.

If you have any questions about the Regulations and the Amending Regulations, please contact a member of ourĀ National Property Team.