Extracts from the second reading speech for the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020

September 10, 2020

Uncategorized

The ever-diligent Abilene Singh has sent me a copy of the second reading speech for the Bill that allows for the extension of the CTRS in Victoria. The real action will be in the Regulations when they are published, but the second reading speech gives a few more clues about what the Regs are likely to say. I have extracted the key parts of the speech below, with the most interesting bits in bold:

… The extension of [the provisions of the Omnibus Act facilitating the CTRS in] Part 2.2 of the Act will permit the extension and amending of the current regulations to 31 December 2020 and the capacity to extend up to 26 April 2021 if required

It is intended that the provisions will continue to apply in respect of all eligible commercial leases where the tenant qualifies for (and is a participant in) the Commonwealth’s JobKeeper program and has an annual turnover of up to $50 million. As originally intended, this includes but is not limited to eligible sole traders, not for profit businesses and franchisees. This Bill will amend the Omnibus Act to enable the eligibility requirements for rent relief to be determined under the regulations, which will allow for the removal of the requirement that tenants must be employing businesses. This will confirm the Government’s intent that sole traders are eligible to participate if they are participating in JobKeeper and will increase flexibility for the Government to adjust as the JobKeeper program evolves. 

It is our expectation that most commercial tenants and landlords will continue to work together to reach agreements that will best assist the ongoing survival of businesses. Where the landlord or tenant cannot reach agreement, either party may refer the matter for free mediation by the Victorian Small Business Commission. 

It is disappointing that the Government continues to receive reports that good faith negotiations are not happening in all instances, and it is important to note that both tenants and landlords have obligations under the Omnibus Act and the CTRS regulations. Tenants that are eligible have an obligation to request rent relief in the form prescribed in the CTRS regulations. Rent relief is not automatic. The Government has endeavoured to make the application process as streamlined as possible, noting that information requests to tenants should be as minimal as possible to support their applications, in most part mirroring information they will have already provided for their JobKeeper application

It is important to note that compliance with the regulations is mandatory, and landlords have obligations to respond to requests for rent relief. To address this issue, this Bill also enables the making of regulations to enable the VSBC to make an order where this is considered fair and reasonable in all the circumstances. It is intended that the VSBC would use these additional powers to resolve disputes between the parties, in particular, where a landlord is consistently failing to respond to VSBC pre-mediation requests to negotiate in good faith.

A copy of the full second reading speech with my highlighting is available here:

About Sam Hopper

Sam is a property and insolvency barrister.

View all posts by Sam Hopper

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