By Colin McCaul

18 December 2020

A further extension of the Commercial Tenancy Relief Scheme (CTRS) to provide relief to tenants (and landlords) impacted by the effects of COVID-19 has been announced by the Victorian Government.

The CTRS was initially expected to end on 29 September 2020 under the COVID-19 Omnibus (Emergency Measures)(Commercial Leases and Licences) Regulations 2020 (COVID-19 Regulations).

The COVID-19 Omnibus (Emergency Measures)(Commercial Leases and Licences) Miscellaneous Amendments Regulations 2020 (COVID-19 Amending Regulations) were then passed extending the application of the Regulations until 31 December 2020.

The further extension of the COVID-19 Regulations will have the effect of extending the CTRS until 28 March 2021 (being the same date the JobKeeper scheme has most recently been extended to).

What will change?

  • As with the previous extension of the CTRS, further amendments to the COVID-19 Regulations will be required to give effect to the extension. At this time, exact details of the amendments are yet to be made available.
  • It would be reasonable to assume that the amendments, in line with guidance from the VSBC, will provide that any new application for rent relief will only apply from the date a fully compliant request for rent relief is made.
  • Subject to compliance with the COVID-19 Regulations, a landlord will not be permitted to terminate a lease for the non-payment of rent or non-payment of outgoings during the extended period.
  • A landlord may not be permitted to request the payment of any deferred rent until 28 March 2021 at the earliest. This would be consistent with the approach taken in the COVID-19 Amending Regulations and would impact any earlier agreement in relation to deferred rent where this was due to be repaid from 1 January 2021.
  • Whether or not there is any change to the information to be provided to a landlord in a request for relief will need to be confirmed.
  • At this stage there is no suggestion there will be any change to the requirement that a landlord’s offer of relief will require to be proportional to the tenant’s decline in turnover (noting this is now in relation to the premises only).
  • It is expected the current land tax relief provisions for landlords will continue but again this needs to be confirmed.

The extension is good news for qualifying tenants but perhaps not so much for landlords who may have been hoping 2021 would see the end of the requirement to grant any further relief and the beginning of payments of deferred rent.

For assistance in relation to the CTRS please get in touch with Colin McCaul at cmccaul@tlfc.com.au

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