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.

August 19, 2021

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Wait times in the Building and Property list at VCAT

A consideration that almost always arises in litigation is the time to trial. This is particularly relevant in retail leasing disputes heard at VCAT, because the parties are usually in an ongoing relationship of landlord and tenant and delay can at times extinguish the subject-matter of the litigation.

For those considering this issue, VCAT has just released an update to practitioners stating that (emphasis added):

Since the onset of the COVID-19 pandemic, VCAT transferred from in-person hearings to conducting matters via telephone and videoconference. This has been a substantial change to our way of operating and has resulted in lengthier proceedings, reducing our capacity to hear and determine cases.

We are continually adapting to these changes and making the best use of our limited resources, but unfortunately we have not been able to stop the increase in wait times across all of our Divisions and Lists. This has now resulted in considerable delays.

For claims relating to building and property, new matters are currently being listed for a final hearing around 37 to 53 weeks from the date of application.

Many matters may not need to proceed to a final hearing. VCAT has been encouraging parties in most cases to attend a mediation or compulsory conference to try and resolve disputes sooner. These methods have been successful in resolving almost half of our cases within the last financial year.

Nonetheless, we understand the impact and frustration these delays can cause and are working hard to try and reduce these backlogs. VCAT is currently developing or trialling a range of methods to hear more cases within our capacity limits, as well as receiving investment from the Victorian Government to increase our digitisation program.

We thank you for your understanding during this difficult time.

Retail tenancy dispute fall within the Building and Property List, so are subject to these wait times.

The impact of these wait times will vary from case-to-case, but all practitioners with current retail tenancy disputes at VCAT or who are considering commencing those proceedings for their clients should be aware of these wait times.

(And no, the CTRS Regulations have not come out yet.)

August 10, 2021

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The CTRS Act is now available…

The Commercial Tenancy Relief Scheme Bill 2021 (Act) is available on the Parliamentary website and a copy of it is available here:

And, yes, I accidentally wrote “now” instead of “not” in my last post. I have now fixed it. Grrrrrrrr – autocorrect!!!!!!!!

No news on the Regulations yet.

August 10, 2021

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Yet more on the new CTRS…

I am reliably informed that the Commercial Tenancy Relief Scheme Bill 2021 (Vic) has passed through both houses of Parliament and has now received Royal Assent, although the Act is not yet on the Parliamentary website.

No news yet on when the new Regulations will be passed. I will post as soon as I hear anything.

August 4, 2021

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A new Bill for the recovery of ESMs in shopping centres

OK – so this is one with a bit of a history to it.

Since about 2015, it became clear that s 251 of the Building Act 1991 (Vic) prevented landlords from recovering from their tenants the cost of essential safety measures and other costs of complying with that Act (see https://samhopperbarrister.com/2015/05/01/landlords-ability-to-recover-outgoings-curtailed/).

Amendments were made to the RLA 2003 and the Building Act last year that allow landlords to recover essential safety measures from tenants of retail premises leases (see https://samhopperbarrister.com/2020/06/19/retail-leases-amendment-bill-2019-passed-though-the-lower-house-and-tabled-before-the-upper-house/).

This left landlords in shopping centres in the awkward position of being able to recover ESMs from retail tenants, but not from non-retail tenants.

To address this, the Building Amendment (Registration and Other Matters) Bill 2021 (Vic) was introduced into Victorian Parliament yesterday. The Member of Parliament introducing the Bill described its purposes as:

This bill will enable retail landlords to recover costs associated with the maintenance of essential safety measures from tenants under a retail lease located within a retail shopping centre that does not fall under the definition of a retail premises lease in the Retail Leases Act 2003.

A copy of the Explanatory Memorandum is available here:

A copy of the Bill is available here:

It appears that landlords of leases that are not in shopping centres and are not under the RLA 2003 still face difficulties in recovering ESMs from their tenants.

Thanks to Sean Huggins from Gadens for alerting me to this.