InsightsSeptember 7, 20200 comments

COVID-19: Eviction Relief Extended for Commercial and Residential Tenancies in Victoria

Amendments to the existing regulation of Commercial & Retail tenancies, introduced in the COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic), imposed new regulations to ensure there are avenues of relief for people experiencing financial strain due to COVID-19. The amendments were passed on 1 May 2020 and applied retrospectively from 29 March 2020. They were set to expire on 29 September 2020.[1]

However, on 20 August 2020, the Premier’s office announced that, due to the prolonged impact of COVID-19 in Victoria, certain provisions in the COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) would be extended, [2] and more relief would be available in certain circumstances, for both the Retail & Commercial leasing sector, as well as the Residential sector.

The relevant announcement foreshadowed that:

Eligible residential tenants and landlords will be supported with up to $3,000 in rental payments as part of the Rental Relief Grant program, with new recipients able to apply for the full amount, and up to $1,000 extra available for previous recipients.

Residential and commercial landlords may also be eligible for an increased land tax discount – now up to 50 per cent – doubled from the earlier 25 per cent.

Eligible small businesses that own their own commercial premises will also now benefit from land tax relief.

What are the proposed changes by the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020?

As we know, government press releases can say plenty, but it is the legislative framework, particularly the Regulations, that will really tell us how these extensions are going to work.

According to the State Parliament’s website, the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020 (“Bill”),[3] has been given a second reading and debate concluded on 4 September 2020.

The Bill will enact a range of amendments and extensions into the existing Act initially passed. Some of the more notable changes are as follows:

The ban on evictions and rental increases will now extend. The ban on evictions applies to both retail and non-retail commercial leases and licenses and continues until 26 April 2021 (except in specific circumstances).

The definition of ‘eligible lease’ has been amended to repeal the conditions whereby the tenant must be an SME entity and qualify for the Jobkeeper scheme, in anticipation of the change of the scheme’s eligibility come 30 September 2020 and the likelihood that many existing eligible leases might then become ineligible, despite needing ongoing rental relief and protection under the regime. Instead the definition of ‘eligible lease’ will be prescribed by the updated Regulations to be more flexible. This flexibility will include opening the regime to non-employing tenants, which had been a significant criticism of the current arrangements. [4]

All residential tenancy related amendments have been extended to 28 March 2021.

As with the first tranche of legislative provisions passed in April and May of this year, the Regulations are where the logistical mechanisms will be enshrined. These Regulations are empowered by section 15(1) of the Act,[5] to which the new Bill has made considerable changes.[6] This gives us some insight into what might be coming but we hope the Regulation amendments are not as far behind the Act amendments as last time.

What proposed powers will be delegated to the Victorian Small Business Commissioner?

Based on the proposed amendments to section 15(1), it would appear the Minister for Small Business (which means the Victorian Small Business Commissioner’s office as the Minister’s delegate) will be given powers to:

Make orders forcing rental relief to be granted to their tenants, and implementing systems for review, appeal, variation, and enforcement of such orders;

Manage the application process for rental relief, including introducing preconditions;

Require statutory declarations from parties to a rent relief application to support the materials they are submitting;

Stipulate more prescriptive calculation methods. In this manner, Mr Pallas’ of the State Government has gone on record to say that this will reflect more stringent requirements to base rent relief off turnover changes. Whether that’s in the form of a month by month, or some other assessment overall, is yet to be seen.

Watch this space as we will bring you updates as soon as the Regulation amendments are available.

How Can DSA Law Help?

For advice regarding the changes to your lease, your obligations under the
COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic), or other tenancy law issues, please Contact Us or one of our Commercial Lawyers at DSA Law on (03) 8595 9580.

[1] For more information regarding initial regulations relating to Commercial & Retail Tenancies, read our article, “COVID-19 Omnibus Regulations 2020 and Leases in Victoria”.

[2]Daniel Andrews, ‘Pause on Evictions Extended and Extra Renter Protections’, The Premier of Victoria (Media Release, 20 August 2020) <https://www.premier.vic.gov.au/pause-evictions-extended-and-extra-renter-protections>.

[3]COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020 (Vic).

[4] Victoria, Second Reading Speech, Legislative Assembly, 3 September 2020, 2.

[5] COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) s 15.

[6] COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020 (Vic); for a progression of the present Bill, Legislative Assembly, ‘COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020 (Vic)’, Victorian Legislation (2 September 2020), <https://www.legislation.vic.gov.au/bills/covid-19-commercial-and-residential-tenancies-legislation-amendment-extension-bill-2020>.