The Victorian Government is making it easier for small business owners to get their security deposits back faster and making leases easier
to understand, under changes to the Retail Leases Act passed in Parliament last week.
The changes will enable small businesses to be more agile and make their legal obligations easier to understand.
Key amendments to the Retail Leases Act 2003 include:
- Retail tenants must now be informed of the proposed rent amount before they extend their lease
- Tenants now have more time to consider the terms and conditions of a proposed lease – 14 days, compared with seven days previously
- Setting a maximum 30-day timeframe for the return of security deposits to tenants – formerly landlords only had to return deposits “as soon as practicable”, which was open to exploitation.
The current practice of landlords passing on the costs of repairs, maintenance and installation of essential safety measures (ESMs) to
tenants when mutually agreed to in a lease will continue under the new Act.
The Government is also supporting commercial tenants and landlords impacted by the pandemic through the Commercial Tenancy Relief Scheme and the Commercial Landlord Hardship Fund.
Commercial Tenancy Relief Scheme
This scheme enables rent reductions for small-to-medium business tenants whose income has been affected by the coronavirus pandemic and provides a freeze on evictions for non-payment of rent for businesses with an annual turnover under $50 million participating in JobKeeper.
For commercial tenants and landlords, this means:
- A six-month moratorium on commercial tenancy evictions from 29 March 2020 for the non-payment of rent for small to medium enterprises with an annual turnover under $50 million that have experienced a minimum 30 per cent reduction in turnover due to coronavirus (COVID‑19)
- Freeze on rent increases during the moratorium for commercial tenants
- A requirement for a landlord to offer rent relief taking into account the reduction in a tenant’s turnover due to coronavirus (COVID‑19) and the landlord’s ability to offer financial relief, to be negotiated between tenant and landlord
- A free mediation service for commercial tenants and landlords to support fair tenancy negotiations
The Victorian Government also provided land tax relief to commercial landlords that provide rent relief to their tenants, provided:
- The tenant’s annual turnover doesn’t exceed $50 million
- Is participating in the Commonwealth’s JobKeeper program, and
- Is suffering financial stress or hardship as a result of the pandemic.
The Victorian Government also provide land tax relief to residential landlords who provide rent relief to eligible tenants.
Commercial Landlord Hardship Fund
This hardship fund offers grants of up to $3,000 per tenancy to eligible landlords.
Landlords can apply if they meet all the criteria.
- The applicant must be a private individual (i.e. a person) or joint landlords who are private individuals (i.e. not ownership through Self-Managed Superannuation Fund, Trust or any other incorporated entity)
- The applicant must have total taxable landholdings (which may include part holdings) of less than $1 million as shown by the 2020 State Revenue Office Land Tax Assessment. Where the land does not meet the land tax assessment threshold, a 2019-20 Municipal Rates Notice can be used as evidence for the landholding, excluding principal place of residence
- The applicant is a landlord (or are landlords) to one or more properties where a tenant is eligible for Commercial Tenancy Relief Scheme CTRS in Victoria, meaning that the tenant is:
- The applicant has provided rent relief to the tenant in accordance with the current regulations (and as evidenced in the current lease agreement) that must be at least 30 percent of total rent payable, of which at least 50 percent of the rent relief is in the form of a waiver for the equivalent of a minimum three-month period:
- The applicant must be in financial hardship, or about to be in financial hardship, due to reducing rent for the relevant CTRS-eligible tenant.
More Information and how to apply is available at business.vic.gov.au.
Please contact our office on (03) 5443 8888 or email@example.com if you require any further assistance in relation to this rent relief scheme, or any other matters.