The Victorian Government has introduced new legislation to provide rent relief to small and medium-sized businesses: the Commercial Tenancy Relief Scheme.
To access this rent relief commercial tenants must have:
· an annual turnover of less than $50 million
· experienced a fall in turnover of at least 30% due to coronavirus pandemic
Landlords of eligible businesses will be required to provide proportional rent relief in line with the business’s reduction in turnover.
For Example
Joe’s business now has a turnover of 60 percent of what it was earning before the pandemic.
Therefore, his landlord can only charge him 60 per cent of his rent.
Of the balance (the remaining 40 percent) at least half must be waived, with the remainder deferred.
Rent relief between landlords and tenants must be documented through a variation of the existing lease or by written agreement such as correspondence between the parties. This documentation needs to set out the terms of the agreement with evidence of mutual consent.
This Scheme is designed to help support commercial tenants who have been negatively impacted by the pandemic, and forms part of the Victorian Business Support Package. Eligible landlords who provide rent relief to commercial tenants will also be supported through a Landlord Hardship Fund.
For more information, contact Ashfords Accountants and Advisory
(03) 9551 2822 | info@ashfords.com.au
