On Thursday 20 August, the Victorian Government announced it will extend the COVID-19 relief scheme for commercial and residential tenancies from 29 September 2020 to 31 December 2020.
Ban on evictions and rent increases
Landlords of commercial and residential tenancies will continue to be banned from evicting tenants (except in specific circumstances) and increasing rent until 31 December 2020.
Will the period for rent relief be extended?
The Government’s announcement was silent on whether landlords would be required to offer tenants rent relief beyond the current 6-month rent relief period.
We expect further clarification from the Victorian Government on this important aspect.
‘Proportionate’ rent relief
Under the changes, commercial landlords will be required to provide rent relief in proportion with the fall in the tenant’s turnover.
Currently, a landlord’s offer of rent relief can consider the landlord’s financial ability to offer rent relief, as well as a reduction in the tenant’s turnover. The potential loss of this balanced approach is of concern to many, including the Property Council.
Specific details on how the new mechanism will work is not yet known.
Power of the Victorian Small Business Commissioner
The announcement also indicates the Victorian Small Business Commissioner will have powers to make orders pertaining to rent relief where a landlord refuses to respond to a tenant’s request for relief.
Under the current Regulations, the Victorian Small Business Commissioner does not have the power to make such orders.
Details on how these powers will operate is yet to be clarified.
Land tax relief and grants
Land tax relief will also be extended to 31 December 2020.
Under the announced changes, landlords who provide tenants with rent waivers of at least 50% of the rent for 3 months can:
- receive up to a 50% waiver of land tax for 2020; and
- defer payment of 2020 land tax to 31 March 2021.
Certain owner-occupiers of commercial properties may be eligible for a 25% waiver of land tax payable for 2020.
Eligible commercial landlords may be eligible for a grant of up to $3,000.
Specific details on how each of these measures will apply is not yet known.
Continued monitoring
We are monitoring legislative developments and will update you when further information becomes available.
More information
If you require advice or assistance on how this may impact you, please contact Morgan Scholz, Head of Property, on (03) 8600 8890 or mscholz@kcllaw.com.au, Mark Yaskewych, Principal Lawyer, on (03) 8600 8830 or myaskewych@kcllaw.com.au, or Geoff Kliger, Senior Special Counsel, on (03) 8600 8878 or gkliger@kcllaw.com.au.
Author
This Property update was authored by Kylie Marotta, Lawyer.
Note: This update is a guide only and is not intended to constitute legal advice.