Published: 12 August 2021
Written by: John Momitsas
The Commercial Tenancy Relief Scheme Act 2001 (VIC) (the Legislation) received Royal Assent on Tuesday, 10 August 2021. The Legislation empowers the Governor in Council to make regulations to reintroduce a new Commercial Tenancy Relief Scheme in Victoria, which is to provide rent relief to eligible commercial tenants experiencing financial hardships due to the impact of COVID-19.
The Legislation stipulates that the regulations to come may have retrospective effect to a day not earlier than 28 July 2021.
Further, the Legislation will be repealed on 30 April 2022 and any regulations enacted and in force immediately before 30 April 2022 will continue in force until 30 October 2022.
The foreshadowed regulations
At this stage, the Legislation only specifies what the foreshadowed regulations may and may not contain however there are no details on what the regulations will contain. The Governor in Council will make the regulations on the recommendation of the Minister for Small Business, for the purpose of responding to the COVID-19 pandemic.
Clause 7 of the Legislation specifically sets out what the Governor in Council, on the recommendation of the Minister for Small Business, may include in the regulations which we note include:
- prohibiting the termination of an eligible lease;
- changing any period under an eligible lease;
- changing or limiting any other right a person who is a landlord under an eligible lease has under an agreement related to that eligible lease;
- exempting a landlord or tenant under an eligible lease from having to comply with an eligible lease or an agreement related to an eligible lease;
- modifying the operation of an eligible lease or an agreement related to the eligible lease;
- extending the period during which an eligible lease is in effect;
- deeming a provision of the regulations as forming part of an eligible lease;
- imposing new obligations on landlords or tenants under an eligible lease, including requiring them to negotiate amendments to an eligible lease;
- requiring landlords and tenants under an eligible lease who are in dispute about any matter relating to an eligible lease to:
- participate in mediation arranged by the Small Business Commission;
- have a mediation certificate before commencing proceedings in VCAT or a court in relation to the dispute;
- commence a proceeding in relation to the dispute in the court;
- preconditions that must exist or be met before a rent relief application may be made; and
- the process for dealing with and deciding rent relief applications, including the criteria to be applied in deciding rent relief applications.
We note that the above is not an exhaustive list of the matters set out in the Legislation, however are the types of matters which will need further explaining in the upcoming regulations.
The foreshadowed regulations
We will be monitoring the release of the regulations, as there are a number of key matters requiring clarification and further detail prior to any rent relief negotiations between landlords and tenants.
In the meantime, if you require any assistance please contact our Real Estate team.