Commercial (including retail) tenants and landlords

Commercial Tenancy Relief Scheme: responding to coronavirus 

The Victorian Government introduced the Commercial Tenancy Relief Scheme (the Scheme) to alleviate financial hardship faced by tenants and landlords as a result of coronavirus (COVID-19).

The Victorian Government has changed and an extended the Scheme until 31 December 2020. This means rent relief agreements between a commercial tenant and their landlord must be made within the timeframe 29 September 2020 to 31 December 2020.

Regulations for the Scheme have been made under the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Act 2020.

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 under the Scheme. Landlords and tenants need to follow the process for the amended Scheme.

Under these amendments, commercial landlords will be required to provide rent relief in proportion to the fall in turnover being experienced by eligible tenants from the date a tenant makes a written application to their landlord within the period 29 September 2020 to 31 December 2020.

For more information about the Scheme, see:

• responses to frequently asked questions
• our leasing advice and scenario showing what rent relief negotiations can look like
• the Victorian Government’s policy guidance.

What does the Scheme provide?

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

• A moratorium on commercial tenancy evictions for the non-payment of rent for small to medium enterprises with an annual aggregate 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 in proportion to a commercial tenants’ reduction in turnover due to coronavirus, to be negotiated between the tenant and landlord
• A 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 aggregate 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.

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

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 fall in turnover is and write to their landlord to try to reach an agreement on rent relief. Tenants should do this as soon as possible because they are only entitled to rent relief from the date they write to their landlord.

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 a landlord or tenant has 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.

Resources: letter template for requesting rent relief and FAQs

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

Tenants and landlords who have questions are encouraged to read the VSBC’s responses to frequently asked questions.

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