Commercial tenancy relief scheme

Posted on 17 Jun 2020

On 1 May 2020, Parliament passed the COVID-19 Omnibus (Emergency Measures) Act 2020, which provided for the introduction of a rent relief scheme to ease the financial hardship faced by tenants. 

The process tenants seeking rent relief need to follow is set out in the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (‘the Regulations’).

The scheme only applies to an eligible lease which is either a retail lease, commercial lease or a licence where, subject to some exceptions, the annual turnover is less than $50 million and the business is eligible for and participates in the Commonwealth JobKeeper program.

The regulations set out the process that tenants seeking rent relief under an eligible lease need to follow. This includes the tenant needing to first make a written request to the landlord for rent relief which the landlord must then respond to by making an offer of rent relief. This offer can be based on a number of factors, including the landlord’s financial obligations. The parties must then negotiate in good faith and try to come to an agreement on the rent relief to be given to the tenant. If an agreement can’t be reached about rent relief, the parties must refer their rent relief dispute to the Small Business Commission for mediationDefinitionMediations are confidential meetings where parties discuss ways to resolve their dispute, with the help of an impartial mediator.

Only rent relief disputes that haven’t been resolved at the Small Business Commission and have been issued with a certificate by the SBC stating that mediation has failed or is unlikely to resolve the dispute can be heard by VCAT. 

A certificate from the Small Business Commissioner is not required if a partyDefinitionA person or organisation directly involved in a VCAT case, including a person or organisation that has brought the case before VCAT or who is defending claims made against them. to an eligible lease seeks an urgent injunctionDefinitionAn order that stops a party from doing something, or makes a party do something. from VCAT.

Further information about the commercial tenancyDefinitionThe agreement between a landlord and a tenant for the rental of a property. and license rent relief scheme can be found on the Office of the Small Business Commission website.