Home Responding to coronavirus (COVID-19) Commercial (including retail) tenants and landlords
Responding to coronavirus (COVID-19)

Commercial (including retail) tenants and landlords

Commercial Tenancy Relief Scheme: responding to coronavirus 

The Victorian Government introduced a Commercial Tenancy Relief Scheme (the Scheme) to alleviate financial hardship faced by tenants and landlords as a result of coronavirus (COVID-19). Regulations for the Scheme have been made under the COVID-19 Omnibus (Emergency Measures) Act 2020.

On 20 August 2020 the Victorian Government announced changes and an extension to the Scheme until 31 December 2020. This means negotiations for rent relief between a commercial tenant and their landlord must consider this timeframe.

The Victorian Small Business Commission (VSBC) expects that tenants and landlords will continue to negotiate rent relief and, if requested, attend mediation with the VSBC in anticipation that the announced changes will come into effect in the coming weeks.

The VSBC encourages tenants and landlords to negotiate on the basis of this announcement, which states commercial landlords will be required to provide rent relief in proportion with the fall in turnover being experienced by eligible tenants going forward.

For more information about the Scheme, see:

What does the Scheme provide?

For commercial tenants and landlords, the Scheme provides the following support:

  • A six-month moratorium on commercial tenancy evictions for the non-payment of rent for small to medium enterprises with an annual turnover under $50 million that have experienced a minimum 30 per cent reduction in turnover due to coronavirus (COVID-19), commencing from 29 March 2020
  • A freeze on rent increases during the moratorium for commercial tenants
  • A rent payment waiver or deferral taking into account the commercial tenants’ income reduction due to coronavirus (COVID-19), to be negotiated between the tenant and landlord
  • free mediation service for commercial tenants and landlords, accessed through the VSBC, to support fair tenancy negotiations

The Government is also providing land tax relief to commercial or industrial landlords that provide rent relief to their tenants, provided:

  • the tenant’s annual turnover doesn’t exceed $50 million
  • the business is an eligible business in the Commonwealth’s JobKeeper scheme, and
  • the business is suffering financial stress or hardship as a result of the pandemic.

The Government is also providing land tax relief to residential landlords who provide rent relief to eligible tenants.

If you would like to discuss your commercial tenancy situation please email the VSBC at enquiries@vsbc.vic.gov.au or call 13 8722.

Communicating early

If a commercial tenant or landlord is in a situation where the tenant is having trouble paying rent because of coronavirus (COVID-19), we recommend tenants keep paying what they can afford, work out what their financial situation is (i.e. what their reduction in turnover is) and talk to their landlord to try to reach an agreement on rent relief.

It is important for tenants and landlords to communicate with each other about their situation as early as possible to try and reach an agreement. If anything is unclear or if they have concerns, they can contact us. If they do find themselves in a dispute, the tenant or landlord can apply to the VSBC for help in resolving the matter through mediation.

Process for commercial tenants and landlords

Learn more about the process for commercial tenants and landlords under the Commercial Tenancy Relief Scheme.

Tenant resource: letter template for requesting rent relief

Tenants can use the VSBC’s practical letter template to guide them in requesting rent relief from their landlord.

Tenants and landlords who don’t fall under the Scheme

Commercial tenants who have been impacted by coronavirus but don’t fall under the Scheme (e.g. small business owners of pubs, clubs and hotels) are encouraged to contact their landlord to discuss their situation and negotiate rent relief, as guided by the Australian Government’s Mandatory Code of Conduct for commercial tenancies to support SMEs affected by coronavirus.

If an agreement cannot be reached, the tenant or landlord can apply for free mediation with the VSBC to help resolve their rent dispute.

Looking after your mental health and wellbeing

As a small business owner, creating a mental health plan is one way to make sure you have the strategies in place to look after your mental health and wellbeing.

Our mental health and wellbeing page includes our guide to creating your own mental health plan in response to coronavirus, as well as information on wellbeing and mental health support for Victorians in small business.

 

Related information