Rent relief is finally here!
The Victorian Government has finally released the regulations for retail and commercial rent relief, introducing a new scheme with new requirements. The Commercial Tenancy Relief Scheme 2021 runs from 28 July to 15 January 2022.
What is the same?
Some features of the 2020 Scheme reappear – in terms of eligibility and what is required to qualify, but others are gone, including the requirement linked to JobKeeper.
The tenant must still be a small to medium business with a turnover less than $50m.
There must be a minimum 30% reduction in turnover in order to qualify.
If rent is deferred, the period of deferral must be added to the end of the lease and deferred rent can be paid over 24 months, but payment must not commence before 15 January 2022.
Landlords must respond within 14 days of receipt of all the information required to qualify.
The Victorian Small Business Commissioner will be available again to conduct mediations between parties, if agreement is unable to be reached.
What is new?
Applications must be made by 30 September 2021 in order to be able to apply retrospectively to 28 July. Applications made after 30 September 20201 will only apply from the date they are made.
There are several turnover tests that can be used to identify a drop in turnover of more than 30%. A table summarising those tests can be found here:https://www.vsbc.vic.gov.au/wp-content/uploads/2021/09/CTRS-table-2_comparison-and-turnover-periods.pdf
Essentially there’re needs to be a drop of over 30% across three consecutive months and the comparison period is the same period in 2019. Evidence required to prove that the test is satisfied is as follows:
- Extracts from accounting records;
- BAS statements for the relevant period that show total sales;
- Statement from a bank that belong to the tenant; and/or
- A statement prepared by a practising accountant.
A statutory declaration is required to accompany an application for rent relief. Extraordinary to think such a requirement is necessary in a pandemic when we are locked in Stage 4 restrictions, that someone is required to attend someone face to face to swear the truth of a statutory declaration. Luckily, declarations can also still be done via Zoom.
Reassessment is required to take place in October 2021 to ensure eligibility is still satisfied.
Eligible tenants should be aware of the deadline of 30 September 2021 to ensure they can apply for retrospective relief.