By Jonathan Leung

2 February 2022

On 1 February 2022, the new 2022 Commercial Tenancy Relief Scheme Regulations (2022 Regulations) were issued extending the coverage of the 2022 Commercial Tenancy Relief Scheme (2022 CTRS) to 15 March 2022.

The 2022 Regulations were foreshadowed in a press release issued by the Victorian Government on 15 January 2022. Click here to read our previous post about the press release.

 

The 2022 Regulations are similar to the recently expired 2021 Regulations and are effectively an extension of those Regulations. However, there are a few key differences between the two:

  1. The 2022 CTRS applies to leases that are in effect from 16 January 2022. This means that tenants who were eligible for rent relief under the previous 2021 CTRS will not experience a gap in the relief provided, and it also means that very new leases may be covered;
  2. The eligibility requirements have arguably become more restrictive on tenants which may be good news for landlords of retail and commercial premises. To be eligible for rent relief under the 2022 Regulations, tenants or corporate groups are required to have a turnover of $10million or less, whereas the 2021 Regulations stipulated a higher threshold, requiring a turnover of $50million or less;
  3. The application of the decline in turnover test effectively remains the same. However, the turnover test period is now the calendar month of January 2022 and the comparison period is the calendar month of January 2020. Further, tenants’ businesses that were closed for more than a week during January 2020 (for reasons that they could not control) will be required to use a test period of December 2021 and the comparison period of December 2019;
  4. Payment of deferred rent has been extended to the expiry of the 2022 Regulations, being 15 March 2022. This means that tenants will only be required to pay deferred rent payments under previous agreements for rent relief from 16 March 2022 onwards. Similar to the 2021 Regulations, the deferred payments must still be paid over the balance of the term of the lease (now commencing on a date that is 16 March 2022 or after), or over 24 months, whichever is the greater. Payments are suggested to be made by equal monthly instalments, but the parties may agree to make payments differently if they wish.

 

There are also notable similarities with the 2021 Regulations:

  1. Tenants will still not be in breach of a lease for non-payment of rent or outgoings, provided that they have made a valid request for rent relief and have continued to pay rent amounts that reflect their loss in turnover;
  2. The method for applying for rent relief to a landlord remains the same as the 2021 Regulations.
  3. Landlords are still prohibited from increasing rent or evicting tenants that have made a valid rent relief request;
  4. Landlords are still required to “consider waiving” outgoings for periods where a tenant is not able to operate their business during the effective period of the 2022 CTRS;
  5. The prohibition on rent increases has been retained.

 

It would be sensible for tenants to make fresh new requests for rent relief for the period 16 January 2022 to 15 March 2022 without delay (even if an existing request is still being negotiated/is on foot) and we encourage you to reach out to us for tailored advice to assist you in this process.

 

View our past blogs on the CTRS:

Commercial Tenancy Relief Scheme extended to 15 March 2022

COVID-19 and the new Commercial Tenancy Relief Scheme

COVID-19 and the New Changes to Leasing

Need extra time on your retail lease? This may help you 

COVID-19  – Commercial Tenancy Relief Scheme to be extended (again)

Amendments to the Commercial Tenancy Relief Scheme

COVID-19 Lease Variations – How to document it properly 

COVID-19 Lease Update – The Regulations are in. It’s time to negotiate in good faith 

 

Watch our past webinars on the CTRS:

TLFC Law Lunchtime Briefing: Post Commercial Tenancy Relief Scheme (CTRS) – What’s next? 

TLFC Law Lunchtime Briefing: Commercial and Retail Lease Update 

 

If you have any questions in relation to the 2022 Commercial Tenancy Relief Scheme, if you need advice or assistance with rent relief, if you have a complicated variation to document, or if you otherwise are a landlord or tenant that would like more information or advice on the COVID-19 leasing changes or leasing generally, please contact  a member of our Property Law Team.

 

Disclaimer
The above does not constitute legal advice, but is information which may be of general interest. Tisher Liner FC Law will not be held liable or responsible for any claim, which is made as a result of any person relying upon the information contained in this publication.

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