Small Business Commission FAQs about the Regulations published

May 15, 2020

Uncategorized

The Victorian Small Business Commission has published a FAQ guideline on the operation of the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Vic).

The Commission’s FAQs are available here: https://www.vsbc.vic.gov.au/fact-sheets-and-resources/faqs/

The FAQs address many the important questions that practitioners are asking about the Regulations.  All practitioners dealing with applications for rent relief (whether for a landlord or a tenant) should be familiar with the FAQs and should consider providing them to their clients.

A lot of practitioners have been asking what information a tenant must provide to their landlord in their application for rent relief.  The FAQs contain the following questions and answers:

What turnover information is appropriate for a landlord to request from the tenant to help inform their offer of rent relief?

A landlord can ask the tenant for information:

      • extracted from an accounting system
      • extracted from BAS
      • provided to a financial institution.

What turnover information is not appropriate for a landlord to request from a tenant to help inform their offer of rent relief?

A landlord should not:

      • request future cash flow projections
      • request balance sheets, profit and loss or year to date financials
      • request the tenant’s bank balance
      • require the financial information to be verified, examined, assured, audited or provided by a third party such as an accountant
      • require an accountant to provide a letter of comfort or similar on the financial information.

The answers to those questions provide useful guidance on what information is expected to be provided.  However, a tenant may choose to provide more information if it wants to.  The decision about whether to provide more information and, if so, what information to provide is a difficult one that needs to be assessed on a case-by-case basis.  Experienced lawyers can provide valuable advice to their clients by guiding them through the difficult decisions that their client’s need to make.

About Sam Hopper

Sam is a property and insolvency barrister.

View all posts by Sam Hopper

Subscribe

Subscribe to our RSS feed and social profiles to receive updates.

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: