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Victorian COVID19 Commercial Lease Regulations

Your tenant may be eligible for the scheme if they:

  • Leased the property before the 29th of March 2020
  • Are a small or medium-sized enterprise
  • Are eligible for the JobKeeper payment scheme

A tenant may make a request for rent relief in writing, accompanied by a statement by the tenant that its lease is an eligible lease and information verifying the tenant is an SME entity, and qualifies for and is a participant in the JobKeeper payment scheme.

If a tenant makes a request in the required form, then that a landlord must offer rent relief to the tenant within 14 days or some other time agreed in writing.

The offer of rent relief must:

  • be based on all the circumstances of the eligible lease
  • relate to up to 100 per cent of the rent payable during the relevant period (29 March 2020 to 29 September 2020)
  • provide that no less than 50 per cent of the rent relief offered by the landlord be in the form of a waiver of rent, unless otherwise agreed in writing
  • take into account the following matters:
    • the reduction in the tenant’s turnover associated with the premises during the relevant period
    • any waiver given pursuant to reg. 14(2)
    • whether a failure to offer sufficient rent relief would compromise the tenant’s capacity to fulfil its ongoing obligations under the lease, including the payment of rent
    • the landlord’s financial ability to offer rent relief, including any relief provided by the landlord’s lenders as a response to the pandemic
    • any reduction to any outgoings charged, imposed or levied in relation to the premises.

Outgoings:

The landlord must consider wavering recovery of outgoings or other expenses payable by the tenant for any part of the relevant period that the tenant is not able to
operate their business at the premises.

The landlord also may cease or reduce services to the premises, if reasonable to do so, whilst the tenant is not operating their business.

If the outgoings are reduced, the landlord must pass that reduction onto the tenant.

Rental Increases

A landlord must not increase rental during the relevant period, unless otherwise mutually agreed by both parties.

Rental Terms and extensions:

if any payment of rent during the relevant period is to be deferred, then the landlord must offer to the tenant an extension to the term of its lease on the
same terms and conditions that applied before the regulations were made.

Download the Regulations here:

COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate.

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