Commercial Tenancy Relief Scheme extended to 15 March 2022
In response to the most recent Omicron strand of the COVID-19 virus, the Victorian Government announced its continuing assistance to small businesses in Victoria in a press release on 15 January 2022.
The previous Commercial Tenancy Relief Scheme (CTRS), which was due to expire on 15 January 2022, has now been extended by two months to 15 March 2022.
The key aspects to take away from the press release include the following:
- The extended CTRS will operate retrospectively from 16 January 2022 to ensure that there is no gap in the rent relief available to eligible tenants.
- Unlike the previous CTRS which was available to businesses with an annual turnover of $50 million or less and satisfied the “decline in turnover” test, the extended CTRS will only be available to business with an annual turnover of $10 million or less and suffered a decline of 30% or more in turnover due to COVID-19.
- There are some aspects that will continue from the previous CTRS:
- Landlords are obliged to continue their provision to their eligible tenants of rent relief that sufficiently matches and is proportional to the tenant’s decline in turnover, noting that such rent relief must be provided by way of 50% deferral and 50% waiver.
- Requirements regarding good faith negotiations between landlords and tenants will also continue.
- If rent relief cannot be agreed between the landlord and tenant, the Victorian Small Business Commission (VSBC) will continue to provide mediation support as it previously has.
- Landlords will continue to be prohibited from evicting tenants (without VSBC mediation) , applying any security deposits(bonds) for tenant lease defaults and increasing rental.
- Landlords should note that payment by tenants of any previously deferred rental under the scheme is also expected to be extended and not payable until the expiration of the CTRS as a result of the extension to the scheme.
- Landlords and tenants with current rent relief agreements should continue to act in accordance with such agreements.
The regulations regarding the 2022 extension to the CTRS have yet to be released, however it is anticipated that the regulations will be issued shortly. In the meantime, the Victorian Government press release can be viewed here. The VSBC have also released an article regarding the Victorian Government’s press release which can be viewed here.
The rules and regulations relating to COVID-19 are rapidly changing along with the ever-evolving COVID-19 virus, making such rules and regulations increasingly difficult to keep up to date with.
If you would like to know more about the COVID-19 rules regarding the CTRS or how this extension may affect you or your business, please contact our office on (03) 8600 9333.