January 15, 2022

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CTRS extended to 15 March 2022

In breaking news, the CTRS will be extended to 15 March 2022.

In a press release today, the Minister for Small Business stated that:

The extended scheme will be available to businesses with an annual turnover of $10 million or less and which have suffered a decline in turnover of at least 30 per cent due to COVID-19.

Landlords will be required to provide continued proportional rent relief in line with a reduction in turnover.

The eviction moratorium will continue. Landlords will not be able to lock out or evict tenants without undertaking mediation through the VSBC.

The new regulations will take effect from 16 January 2022. Tenants and landlords should abide by the conditions in their existing agreement. Small and family businesses that already have a deferment will have more time for repayments as a result of this extension.

Eligible commercial landlords that have provided rent relief to their tenants have received support through the $20 million Commercial Landlord Hardship Fund. They will continue to do so while their tenants are eligible for the scheme.

The full text of the Minister’s press release is available here: https://www.premier.vic.gov.au/commercial-tenancy-support-extended

More information is available at the VSBC website here: https://www.vsbc.vic.gov.au/news-publication/victorian-government-announcement-commercial-tenancy-relief-scheme-to-be-extended/. That site also notes that:

The ban on rent increases … will continue …

I will post a copy of the new regulations and any amendments to the empowering statute as soon as they are available.

October 29, 2021

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CTRS mandatory re-assessment due on Sunday

Mot people seem to be on top of this already, but if you’re not – DON’T FORGET THAT THE MANDATORY RE-ASSESSMENT IS DUE ON SUNDAY!!!!!!!!!!

My friends at Eastern Bridge Lawyers have written a useful post on the requirements for the mandatory re-assessment here: https://www.easternbridge.com.au/post/ctrs-2021-reassessments-due

One of the requirements for making a mandatory reassessment is that the parties have already entered into an agreement for rent relief. However, the Regulations do not expressly address what happens if the tenant has made a request for rent relief already but the parties are still negotiating without an agreement having been reached. I suggest that it is prudent for tenants to make a request for re-assessment anyway because:

  1. most tenants will want their September 2021 trading figures to form part of the ongoing negotiations; and
  2. the tenant cannot later be criticised for not having made the request for mandatory re-assessment.

September 29, 2021

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Rent relief requests are due tomorrow – don’t forget!

This is just a quick reminder to practitioners acting for tenants who want to claim rent relief for the period 28 July to 30 September 2021 that your request for rent relief is due tomorrow.

There is a precedent application and supporting statutory declaration on the VSBC website that is very easy to complete: see https://www.vsbc.vic.gov.au/news-publication/small-businesses-must-apply-for-rent-relief-by-30-september-to-get-backdated-relief/

Also, remember that both your application AND supporting affidavit AND supporting documents must be in tomorrow if you want to claim rent relief from 28 July 2021 (see reg 28 of the CTRS Regulations).

There is a bit of an ongoing issue about how to deliver the request that I wrote about in my last post.

Section 67 of the CTRS Regulations states that (sorry about the formatting):

67        Giving notices—general

(1)       A notice or other document to be given to a person under the Act or these Regulations by the Small Business Commission must be given—

(a)       by delivering it personally to the person; or

(b)       by leaving it at the person’s usual or last known place of residence or business with a person apparently over the age of 16 years and apparently residing or employed at that place; or

(c)       by sending it to the person by post addressed to the person’s usual or last known place of residence or business; or

(d)       if the person is a corporation— 

(i)        by sending it by post to the registered office in Victoria of the corporation; or

(ii)       by giving it to a person who is an officer of the corporation who is authorised to accept service of notices and who is employed at the registered office of the corporation; or

(e)        by electronic communication in accordance with the Electronic Transactions (Victoria) Act 2000.

(2)       If a notice or other document is to be given to a landlord under these Regulations, in addition to the methods set out in subregulation (1), the notice or document may be given—

(a)       by delivering it to the landlord or to the landlord’s agent or to the person who usually collects the rent; or

(b)       by sending it by post addressed—

(i)        to the landlord at the landlord’s address for service of documents; or

(ii)       to the landlord’s agent at the agent’s usual place of business; or

(iii)      by giving it to a person employed in the office of the landlord’s agent.

You will need to make sure that your method of delivery complies with that section.

Service by email probably requires landlord’s consent, so make sure you have that consent in writing in advance if you want to deliver the documents by email. Otherwise, you will need to use one of the other methods of delivery prescribed by the Regulations.

Sub-regulation 67(2)(a) appears to allow the request to be sent to a managing agent who receives the rent on the landlord’s behalf. However, you will still need the managing agent’s consent (preferably in writing) to send the document by email.

Be careful sending the documents by post as documents sent by post are usually presumed to have been received in the ordinary course of post (which may cause your document to be received late) and the presumption may be rebuttable by evidence that the letter was not received or was received late.

September 23, 2021

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CTRS Regulations – 30 September 2021 is approaching fast …

Well, 30 September 2021 is the last date for filing requests for rent relief that apply to the period commencing 28 July 2021 and that date is approaching fast.  

Lots of people have been asking whether they can include their figures for the month ending 30 September 2021 in this request.  I think the answer is yes, but that it is risky to do so for the following reasons:     

  • if you want to claim rent relief from 28 July 2021 (and why wouldn’t you?) your request, supporting documents and statutory declaration need to be in by 30 September 2021 (see reg 28).  So, if you want to claim rent relief for the month ending 30 September 2021, then the request will need to include your accounts for that day and be in that evening;
  • so far as I can tell, a legal day ends at midnight, so you should have some time after close of trade to complete the documents – but not much.  This may well be impossible if you need professional input;
  • you will need to get your statutory declaration witnessed that evening, too.  The statutory declaration needs to affirm that the contents of the tenant’s accounts provided to the landlord are accurate, so it cannot be sworn until after the accounts are prepared.  It may be (very) difficult to find someone to witness your statutory declaration in time.  It’s important to note that the statutory declaration must be in on 30 September 2021 and not 14 days later (see reg 28);
  • you will also need to ensure that you get your request to your landlord on time.  You will need to effect service under reg 67.  It is important to note that you cannot assume that service by email will be effective.  Regulation 67 allows service by email in accordance with the Electronic Transactions (Victoria) Act 2000 (Vic).  However:
    • this generally requires the landlord’s consent (see sub-s 8(1)(b) of that Act) and whether that consent has been provided will be determined on a case-by-case basis;  and 
    • depending on your personal circumstances, there may be difficulties determining when the email is deemed to have been received (see s 13A of that Act);
  • VCAT has not heard any cases about the new CTRS Regulations that I am aware of, but it has heard quite a few under the old 2020/21 Regulations.  Most of these cases have been about whether requests for rent relief comply with the old CTRS Regulations and VCAT has been quite strict about compliance (for example, see Zeini v Inner Metropolis Holdings Pty Ltd (Building and Property) [2021] VCAT 243).  Consequently, there is a real risk that a defect in a request for rent relief will render the request void and of no effect;  and 
  • if a valid request is not made on or before 30 September 2021, then the tenant is only entitled to rent relief for the period after a valid request is made and not for the period from 28 July 2021 (see reg 28), so making an invalid or late request could be an expensive mistake.

Also, the mandatory re-assessment applies from 31 October 2021 and take account of the tenant’s turnover figures that include trade up to 30 September 2021. 

Consequently, while it may be possible to base your request on figures that include the month ending 30 September 2021, it is a brave tenant who elects to do so and it may well be better to rely on your turnover figures from June, July and August rather than risk making a non-compliant request or missing the deadline.

If, however, you are committed to using your September turnover figures, then it is essential that you get professional advice as soon as possible on whether your request is compliant and the steps you need to take to ensure compliance on the evening of 30 September 2021.  It is important that you get advice specific to your circumstances, as the above comments are general only.  

Liability limited by a scheme approved under professional standards legislation.

August 25, 2021

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More material on the CTRS

My colleague Davids Darzins of Darzins Legal has also provided some useful material that he has kindly offered to share with readers of this blog. Davids says this:

The VSBC FAQs can only be viewed one FAQ at a time …

I have downloaded each of the FAQs and the answers.  These are set out in the attached PDF.  I have also, for completeness, downloaded and saved Table 1 (Rent Relief Periods); Table 2 (Comparison and Turnover Periods); Table 3 (Reassessment Periods); and the VSBC FAQ on Rent Relief From Before 28 July 2021 document.  I attach a copy of these PDFs for your reference.

With Davids’ consent, I have attached those documents to this post for readers to share.

This will certainly make it easier for those who want to print out the FAQ’s and read them on the couch. However, the VSBC’s FAQs were updated from time to time last year, so readers relying on any particular answers in the attached should cross-reference the current version of the FAQs on the VSBC’s website.

August 25, 2021

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VCAT jurisdiction over interstate residents

Some readers may recall a post that Callum Dawlings and I wrote a few years ago about problems with VCAT’s jurisdiction over interstate residents: see https://samhopperbarrister.com/2018/04/27/vcat-jurisdiction-over-interstate-residents/

This issue has now been addressed by the Victorian Civil and Administrative Tribunal and Other Acts Amendment (Federal Jurisdiction and Other Matters) Act 2021 (Vic).

My colleague Brett Harding (see https://www.vicbar.com.au/profile/8358) recently wrote a paper about the new legislation, that I have attached below:

August 25, 2021

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Justice Croft has returned to the Supreme Court

His Honour Justice Croft has returned to sit in the Supreme Court of Victoria as a Reserve Judge for 5 years.

Justice Croft sat as full time for 10 years until late 2019, during which his Honour heard all retail leasing appeals and almost every matter that touched on the Retail Leases Act 2003 (Vic) in that court.

I’m sure that I speak on behalf of the whole leasing community when I say that his Honour’s return to the bench is welcomed by all leasing practitioners.

August 25, 2021

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Small Business Commission’s FAQ’s on the CTRS have been posted

Last year, the Office of the Small Business Commission provided resources for landlords and tenants about the CTRS on its website, including a valuable FAQ’s section.

The FAQ’s have now been updated to reflect the new 2021 CTRS.

To review the FAQ’s, follow this link: https://www.vsbc.vic.gov.au/fact-sheets-and-resources/faqs/#commercial-tenancy-relief-scheme-2021-faqs

August 24, 2021

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CTRS Regulations – my first comments

Ok – so there is a LOT to work through.

I recommend that readers start with the post from Easternbridge lawyers linked to my last post. Here it is again: https://www.easternbridge.com.au/post/ctrs-2021-regulations

My preliminary comments on the new Regs are as follows:

  • People may have started negotiations for rent relief already (in fact, the government encouraged landlords and tenants to do so). However, there are consequences in the Regulations for not following the established procedures. Practitioners should be advising their tenants to make a compliant request for rent relief before 30 September 2021, even if negotiations are well-progressed to avoid being shut out of rent relief if those negotiations stall.
  • The new request procedure requires the landlord to take into account ‘other circumstances’ that the tenant wants taken into account. While it is unlikely that this means circumstances unrelated to COVID must be considered, this would allow a tenant to put arguments and data about how and why its business should receive more than the minimum rent relief (eg it it was disproportionately affected by the responses to COVID other than lockdowns, such as restrictions on mass gathering).
  • Practitioners should be particularly aware of the significance of 30 September 2021. Failure to make a compliant request for rent relief before that date can affect the tenant’s ability to seek rent relief for the period 28 July to 30 September 2021 and it also triggers the obligation to submit information for reassessment.
  • Practitioners advising tenants should also make a diary note to file an application to the VSBC for mediation 14 days after the tenant makes a compliant request for rent relief as the tenant is deemed to have accepted the landlord’s first offer if the application to the VSBC is not made (unless agreement for rent relief has been reached).
  • Practitioners advising tenant should also be aware of the requirement to provide for a re-assessment prior to 31 October 2021, as a failure to provide that information puts the tenant at risk of losing any agreed rental waiver.
  • Curiously, the new regulations have stated that a rent review that increases the rent between 28 July 2021 and 15 January 2022 will not be frozen over that period, but will be permanently ‘lost’. This was, and continues to be, hotly debated under the old CTRS. It is also unclear at this stage whether a market rent review that falls between those dates is ‘lost’, however there are conceptual difficulties in determining whether or not a market rent review will increase the rent without the review being conducted.

The Office of the Small Business Commission published useful material on the CTRS last year. I’ll post links anything from their office as soon as I see it.

August 24, 2021

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Commercial Tenancies Relief Scheme Regulations have been published

The new CTRS Regulations have now been passed.

A copy of the Regulations is available here: https://content.legislation.vic.gov.au/sites/default/files/2021-08/21-103sra%20authorised.pdf

I will provide a summary of the Regs once I have had a chance to work through them myself.

For those wanting to get the jump on the competition, a summary of the Regs has already been posted by Eastern Bridge Lawyers, available here: https://www.easternbridge.com.au/post/ctrs-2021-regulations

As we all work through the Regulations, it is worth remembering this – almost all of the litigation under the first version of the CTRS was about (a) whether a tenant was eligible for rent relief and other protection under the Regulations and (b) whether the tenant had satisfied the statutory requirements of a valid request for rent relief. Consequently, I think it would be prudent for readers to focus your attention on these two issues first.

I will post more as soon as I can.