Legal Insights

Victorian Government announces extension to COVID-19 rent relief provisions

By Marine Nincevic, Guy O'Connor

• 21 August 2020 • 2 min read

The State Government has announced that the protections for commercial tenants in place under the COVID-19 Omnibus (Emergency Measures) Act 2020 and the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (the COVID Rent Relief Measures) which were due to expire on 29 September will be extended to 31 December 2020.

While the extension of the COVID Rent Relief Measures had been anticipated, the extension will have significant consequences for both commercial landlords and tenants.

The full details of the extension, and the impact on commercial landlords and tenants, will not be known until the regulations implementing the extension to the COVID Rent Relief Measures are available.

The following key items have been announced by the State Government:

  • The right for a tenant to seek rent relief is extended beyond 29 September to 31 December 2020.
  • The moratorium on terminating leases for non-payment of rent is extended to 31 December 2020.
  • The restriction on rent increases will continue until 31 December 2020.
  • Additional measures will be introduced requiring landlords to provide rent relief in proportion with falls in turnover. Currently, reduction in turnover is only one of a number of factors to be taken into account when determining the amount of rent relief to be provided. It is not clear how this requirement will be balanced against the potential financial hardship this requirement will impose on landlords, particularly those small landlords reliant on rent for income support, or who will continue to be liable for ongoing mortgage payments.
  • An additional 25% land tax relief will be available to landlords that provide outright rent waivers of at least 50% of rent payable for at least 3 months.
  • A $60 million fund will be established for eligible small commercial landlords, and that will provide up to $3,000 per tenancy.

No detail has been provided on how this extension will affect the numerous rent relief agreements which landlords and tenants have already negotiated and whether those agreements will need to be renegotiated, or further agreements negotiated for the extension period.

We will provide further updates as and when regulations are issued and more information is available.

Require further assistance?

Please contact Marine Nincevic or Guy O'Connor for guidance on understanding your rights and obligations under existing leases and licences under the COVID Rent Relief Measures, and the potential impacts arising from the extension to the COVID Rent Relief Measures.

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