Rent relief: VSBC will assist commercial tenants in negotiations with landlords

On Wednesday the Victorian government introduced legislation that will provide rent relief to eligible businesses through the commercial tenancy relief scheme, and announced the Victorian Small Business Commission (VSBC) was available to help mediate discussions with landlords. 

Protections established by the new scheme by the legislation will be backdated to 28 July (when the scheme was announced), meaning that commercial landlords cannot issue an eviction notice to eligible tenants without first receiving a VSBC direction.

Businesses that have suffered a loss in turnover of 30% or more during the COVID-19 pandemic will be eligible for the scheme via a one-time test.

Victorian small business minister Jaala Pulford issued a statement urging commercial tenants and their landlords to commence negotiations about rent as soon as possible. She added that the VSBC was available to assist with mediation if parties ‘cannot reach a satisfactory agreement’. 

“We know many small businesses have had a tough time due to the pandemic, but these changes will provide them with more security going forward and help them get back on their feet,” Pulford said.

“It’s encouraging to see the way tenants and landlords are working together to achieve fair outcomes and this new legislation will ensure they get the support they need.”

Under the scheme, the loss incurred by Victorian businesses will be calculated via a mandatory assessment to compare their turnover against the results of the final quarters of the 2020/21 and the 2018/19 financial years.

The initial amount of rent relief available to eligible businesses will also be based on the percentage drop in turnover.

The state government said that those businesses who have been deemed eligible under an earlier commercial tenancy relief scheme would have existing ‘deferred rent payment requirements’ frozen until 15 January 2022. After this date, the outstanding rent amount would be added to deferred rent accrued under the new scheme.

The government has also sweetened the deal for landlords who ‘do the right thing’ by their tenants to the tune of $100 million, by offering up to 25% in land tax relief on top of past relief measures. 

A $20 million hardship fund has also been established to support small landlords, who can access additional payments if they can demonstrate ‘acute hardship’, the statement said. 

For more information, commercial tenants and landlords are being encouraged to contact the VSBC by calling 13 87 22 or online. 

This article was first published by The Mandarin.