Property Accountants | Ballarat Bookkeepers

A year and a half since Covid started and many businesses, landlords and tenants in NSW and Victoria are still struggling to stay afloat. After the latest lockdowns, the NSW and VIC Governments have offered relief assistance for commercial tenancies.

Restrictions are beginning to ease but the VIC Government is still offering another tenancies relief scheme which will provide rent relief to tenants affected by the latest lockdowns. More details are yet to be announced but it could be similar to the 2020 Rent Relief Regulations.

The new scheme is expected to require tenants to demonstrate a 30% decline in trade from before trading to prove eligibility for the scheme. A turnover decline may not be proven by JobKeeper participation so it may require for the statement of the tenant’s accountant. Landlords are expected to not be able to terminate contracts with eligible tenants for non-payment of rent. Relief might need to match the decline in trade and be provided by half deferral and half waiver. The relief might need to include deferred rent payments the tenant may be making from the 2020 scheme but it is yet to be confirmed and may depend on how the payments were documented previously and structured by individual parties.

The State Government is also providing an $80 million fund to support commercial building owners that provide rent waivers to affected tenants.

The Tenancy Relief Scheme is on top of the $400 million Federal and State support offered to Victorian businesses comprising of $156m Business Continuity Fund, $85m Small Business COVID Hardship Fund, $9.8m Aline Businesses and $70m for Licensed Hospitality Venues.

The NSW Government also passed the Retail and Other Commercial Leases (COVID-19) Regulation 2021 (NSW) for 13 July to 20 August 2021. The regulations don’t provide for a rent relief scheme but operate only to prevent mass evictions and requiring landlords to mediate with defaulting tenants. To qualify, the tenant must provide a statement and evidence proving he or she is an impacted lessee to the landlord. The lease must be in place before 26 July 2021 and the tenant must qualify for the Micro Business COVID-19 Support Grant, COVID-19 NSW Business Grant or JobSaver Grant. The tenant must also have less than $50m in turnover.

Once evidence is provided, the landlord can’t terminate the lease or evict the tenant because of non-payment of rent, outgoings or inability to trade. Landlords cab terminate and evict for breaches before 12 July 2021 if the breaches are not related to the impacts of COVID-19. Restrictions will be in place until the end of August and the Government is yet to revise the regulations to include rent relief.

Different regimes will apply based on the nature of tenancy but these are common to retail and commercial tenants.

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