What did we learn from today’s announcements?

August 20, 2020


The Premier’s press release today contained some important information about the CTRS for commercial landlords and tenants.  

Here is my summary of and comments on the latest development:

  • The prohibition on lease terminations and rent increases will be extended from the current sunset date of 29 September 2020 to 31 December 2020.  It is unclear at this stage whether the prohibition on terminations extends to both termination for non-payment of rent and termination for not trading, but it is likely to cover both.
  • The prohibition will not apply in ‘specific circumstances’. That seems to be new and at this stage it is not clear what those circumstances will be.
  • Importantly, the press release said nothing about whether the landlords’ requirement to provide rent relief will also be extended.  We will need to wait to hear more on this issue.
  • The Victorian Regulations giving effect to the Code have been criticised by tenants for ‘de-coupling’ rent relief from the tenant’s reduction in turnover and emphasising both the tenant’s ability to pay rent and the landlord’s ability to absorb rent relief.  The press release suggests an increased emphasis on, or ‘re-coupling’ of, rent relief to the reduction in tenant’s turnover.  It is not clear at this stage what that ‘re-coupling’ will look like.
  • The Victorian Small Business Commission ‘will now also have greater capacity to make an order on rent relief if a landlord refuses to respond to rent relief requests.’  One of the areas of uncertainty in the Victorian Regulations is what power the Courts or VCAT have resolve requests for rent relief that do not settle at mediation.  This announcement suggests that the VSBC will have some kind of power to make an order for rent relief.  This is new, as the VSBC does not have such a power under the current version of the Regulations.  Again, it is not clear how this power will operate or in what circumstances.
  • There will be increased land tax relief and funding for commercial landlords – up to $3,000 per tenancy – and eligible small businesses that own commercial property will be able to benefit from land tax relief.

The announcement coincides with at least one major landlord moving to terminate leases for some non-paying, non-SME tenants: see https://www.theage.com.au/business/companies/westfield-locks-retailers-out-of-stores-as-rent-battle-escalates-20200820-p55ns2.html

As usual, I will post any further information about amendments to the CTRS as soon as it comes to hand.

About Sam Hopper

Sam is a property and insolvency barrister.

View all posts by Sam Hopper


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