Commercial tenancy relief scheme

On 1 May 2020, Parliament passed the COVID-19 Omnibus (Emergency Measures) Act 2020, which provided for the introduction of a rent relief scheme to ease the financial hardship faced by tenants. 

The process tenants seeking rent relief need to follow is set out in the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (‘the Regulations’).

The scheme only applies to an eligible lease which is either a retail lease, commercial lease or a licence where, subject to some exceptions, the annual turnover is less than $50 million and the business is eligible for and participates in the Commonwealth JobKeeper program.

The regulations set out the process that tenants seeking rent relief under an eligible lease need to follow. This includes the tenant needing to first make a written request to the landlord for rent relief which the landlord must then respond to by making an offer of rent relief. This offer can be based on a number of factors, including the landlord’s financial obligations. The parties must then negotiate in good faith and try to come to an agreement on the rent relief to be given to the tenant. If an agreement can’t be reached about rent relief, the parties must refer their rent relief dispute to the Small Business Commission for mediation. 

Only rent relief disputes that haven’t been resolved at the Small Business Commission and have been issued with a certificate by the SBC stating that mediation has failed or is unlikely to resolve the dispute can be heard by VCAT. 

A certificate from the Small Business Commissioner is not required if a party to an eligible lease seeks an urgent injunction from VCAT.

Further information about the commercial tenancy and license rent relief scheme can be found on the Office of the Small Business Commission website.