Process for commercial tenants and landlords
On this page
- I’m having trouble paying my monthly and/or deferred rent. What can I do?
- What other supports are available in response to COVID-19?
- How can I respond to my tenant’s request for rent relief?
- How can I negotiate and document an agreement?
- What can I do if I can’t reach an agreement or get a response from the other party?
- What happens at the VSBC?
- What happens if the landlord refuses to negotiate through the VSBC or an agreement can’t be reached at mediation?
- What can I do if the Terms of Settlement entered into at mediation are breached?
- Where can tenants and landlords find more information?
PLEASE NOTE: the Victorian Government’s extended Commercial Tenancy Relief Scheme (the Scheme) ended on 15 March 2022. The Victorian Small Business Commission will continue to offer free mediations to help resolve rent relief disputes for applications received up to 30 June 2022, whether or not the tenant was eligible for the Scheme. From 1 July 2022 the cost of mediation will return to $195 per party, per session.
Although commercial tenants are no longer entitled to rent relief, tenants and landlords still have access to the Victorian Small Business Commission’s (VSBC) support. This includes guidance in negotiating a new agreement and access to free and impartial help to resolve a rent relief dispute.
The following steps outline the VSBC’s recommended process that tenants and landlords can choose to follow.
I’m having trouble paying my monthly and/or deferred rent. What can I do?
- Review your finances and contact your accountant, a business advisor or a financial counsellor for advice as soon as you can – Partners in Wellbeing offers access to free qualified financial counsellors who can help in negotiating affordable repayment plans and CPA Australia offers a helpful tool for finding a certified practising accountant in Victoria.
- Talk with your landlord about your situation, what rent you can afford and the rent relief you’re requesting (how much and for how long).
- Follow up your discussion with a written request, supplying documents showing your fall in turnover (for example, you might choose to supply extracts from your accounting records, your BASs, bank statements that relate to your account or a statement prepared by a practising accountant).
What other supports are available in response to COVID-19?
- The Business Victoria website offers information on grants, programs and other supports that are currently available to people in small business, including business mentoring.
- We encourage small business owners who are feeling stressed or concerned about their business to call Partners in Wellbeing on 1300 375 330. In addition to financial counselling, the helpline offers free access to trained wellbeing coaches and business advisors.
- The Commercial Landlord Hardship Fund offers grants to eligible landlords who experience hardship as a result of having waived rent for their tenants under the extended Scheme. Applications close 20 March 2022.
- Australian Banking Association (ABA) member banks are offering a range of services that can help tenants and landlords, which can include a deferral of scheduled loan repayments and the waiving of fees and charges.
How can I respond to my tenant’s request for rent relief?
- We recommend trying to respond within 14 days, taking into account:
- any waiver or reduction of outgoings you have already given your tenant
- any waiver or reduction of outgoings or other expenses for the premises that other parties (e.g. water company or local council) have provided.
How can I negotiate and document an agreement?
- We urge tenants and landlords who enter into negotiations to do so in good faith, which means:
- communicating with each other honestly and fairly with a real want to reach agreement
- behaving in an open and transparent way
- providing accurate information – and enough of it – to support negotiations.
- Documenting what is agreed to in writing is really important. This can be done as a variation of the lease or by having a written agreement for rent relief.
What can I do if I can’t reach an agreement or get a response from the other party?
- You can try to resolve the matter by applying for our free and impartial help.
- When applying, make sure you include:
- all of the relevant correspondence and other materials sent between you and the other party (e.g. any written requests for rent relief and responses to these requests, documents showing fall in turnover)
- the other party’s contact details (including their postal address and phone number)
- a copy of the lease.
What happens at the VSBC?
- A VSBC team member will contact you and the other party to try to resolve the matter early on – often just over the phone. Where this isn’t possible, they will arrange a free mediation session. This is where an experienced, independent professional – the mediator – helps the tenant and landlord to reach an agreement they can both accept.
- The VSBC will send your application to the other party and give both of you information and resources to prepare you for mediation.
- The mediation session will be held at a time that suits both parties. If the tenant and landlord reach an agreement, they will be able to enter into binding Terms of Settlement.
What happens if the landlord refuses to negotiate through the VSBC or an agreement can’t be reached at mediation?
- If the dispute involves a rent relief request made after 15 March 2022 and includes retail leasing matters, the VSBC can issue a certificate so the dispute can go to the Victorian Civil and Administrative Tribunal (VCAT).
- If the dispute happened after 15 March 2022 and is solely about rent, the VSBC might not have jurisdiction to issue a certificate. We encourage tenants in this situation to contact their accountant or call Partners in Wellbeing on 1300 375 330 for free access to financial counsellors and business advisors.
What can I do if the Terms of Settlement entered into at mediation are breached?
- You can apply to VCAT or a court for a decision on the dispute. For applications to VCAT, you will need to provide the VSBC file reference number and a copy of the Terms of Settlement.
Where can tenants and landlords find more information?
For more information, see the VSBC’s:
- FAQs on topics including requesting rent relief, responding to a request, rent increases and applying for help to resolve a dispute
- scenario showing rent relief negotiations and ways we can help
- forms for applying for our help.