COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020 now available

September 3, 2020

Uncategorized

A Bill is now available on the Parliamentary website that will allow the extension of the CTRS.

The purpose of the Bill is stated as:

(a) to amend the COVID-19 Omnibus (Emergency Measures) Act 2020— 

(i) to extend the operation of Part 2.2 of that Act under which regulations may be made to modify the law relating to retail leases and non-retail commercial leases and licences until 26 April 2021; and 

(ii) to make further provision in relation to the subject matter of regulations which may be made under Part 2.2 of that Act, 5 including the making of orders directing landlords under eligible leases to give or agree to give specified rent relief to tenants under eligible leases and conferring jurisdiction on VCAT to 10 enforce such orders; and 

This Bill was expected in light of the Premier’s announcement, discussed here.

It is necessary to extend the Omnibus Act, because it automatically expires on 29 September 2020.

The contents of the Bill is largely what we expected following the Premier’s announcement, but it has a few surprises.

The operation of commercial tenancy parts of the Omnibus Act is to be extended to 26 April 2021. The reason for that date is unclear, given that the Premier’s announcement suggested an extension of the CTRS only to 31 December 2020.

The Bill also changes the definition of ‘eligible lease‘. Currently the Act defines an eligible lease in s 13 (basically the tenant has to be an SME and an employer that is eligible for and a participant in JobKeeper). The Bill allows the definition of ‘eligible lease’ to be prescribed by the Regulations. This could be used to address some or all of the following issues:

  • the requirement that the tenant be an employer, which has been causing problems for sole traders and tenants who operate a service company; and
  • the requirement that the tenant itself be a participant in JobKeeper, which has also been creating problems for tenants that use a service company.

I have also read in the news that there has been lobbying to reduce the $50M threshold for an eligible lease.

The Bill also allows the new/amended Regulations to allow for the making of orders for:

(na) the making of orders directing landlords under eligible leases to give or agree to give specified rent relief to tenants under eligible leases (binding orders) and the content of such orders;

(nb) the process for applications by tenants under eligible leases for binding orders (rent relief applications) including the content of rent relief applications and documents that may accompany rent relief applications; 

These are, presumably, the orders for rent relief that can be made by the VSBC that were referred to in the Premier’s announcement.

The Bill also allows for the review and enforcement of binding orders by VCAT.

The Bill only provides for tenants applying for binding orders. There is no equivalent provision for a landlord to seek a binding order. However, it should be noted that reg 9 of the current Regulations only protect a tenant from re-entry if it complies with regs 10(1) to (5), which requires the tenant to make an application for rent relief and to negotiate in good faith.

I have not seen the new regulations yet and will publish a post as soon as I can.

A copy of the Bill is available here (with the relevant parts highlighted):

About Sam Hopper

Sam is a property and insolvency barrister.

View all posts by Sam Hopper

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