First comments the new CTRS Regs

February 1, 2022

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The new CTRS Regulations are based on the Commercial Tenancy Relief Scheme Regulations 2021 (Vic) and largely mirror those regulations.  However, there are some notable changes.

My first comments on the new CTRS Regs are:

  1. The new regulations cover the period 16 January 2022 to 15 March 2022.
  2. The extension applies only to tenants or corporate groups with a turnover of less than $10M, down from $50M in the previous versions of the CTRS.
  3. The definition of ‘turnover’ continues to include Victorian government COVID-19 business support grants received by the tenant during the relevant period (which caught out a few tenants last time around).
  4. The new CTRS Regs apply to leases that were in effect from 16 January 2022, so will apply to very new lettings.
  5. Generally, the turnover test period and the comparison period are January 2022 and January 2020 respectively, but there are exceptions and alternative comparison turnover methods prescribed.
  6. The most notable exception is if the tenant’s business was unexpectedly closed for more than a week in January 2020 (ie the January before COVID), in which case the tenant’s trading figures for December 2021 and December 2019 are used.
  7. The form and content of a tenant’s request for rent relief is largely unchanged.  Last time, requests for rent relief would only apply retrospectively if they were made before 30 September 2021.  There appears to be no equivalent in this version of the CTRS Regs.  However, it is still prudent for tenants to make their requests for rent relief as soon as possible.  
  8. The new regulations do not expressly address whether a new request for rent relief must be made if the landlord and tenant are still negotiating about rent relief for the period 28 July 2021 to 15 January 2022.  There was some suggestion that a new request was not required in similar circumstances under the CTRS back in 2020 (does anyone still remember it?).  However, that was because the CTRS in 2020 was extended by varying the then-existing regulations.  The new CTRS Regs take the form of a whole new piece of delegated legislation, so the same reasoning might not apply.  Consequently, it is prudent for tenants who are still negotiating rent relief for 28 July 2021 to 15 January 2022 to make a fresh request under the new regulations as soon as possible.
  9. Payment of deferred rent under previous agreements for rent relief has been pushed back to 15 March 2022.
  10. The prohibition on rent increases from the previous version of the CTRS has been retained without change, so under the new regulations landlords cannot apply a rent review that would have occurred between 16 January 2022 and 15 March 2022.  

As always, my friend Paul Nunan at Eastern Bridge Lawyers has produced a note summarising the contents of the new regulations with breathtaking speed.  A copy of his discussion is available here: https://www.easternbridge.com.au/post/ctrs-2022-regulations-released

Paul’s note identifies some confusion caused by regulation 14(b).  For those looking at this issue, Paul and I have discussed this with Jamie Bedelis of Bedleis Lawyers and we think the answer is probably to read reg 14 with reg 21. This, in turn, leads to the exception referred to in paragraph 6 above.

Thanks also to Mark Schramm from the VSBC for alerting me to the new regulations and his input in our discussions.

About Sam Hopper

Sam is a property and insolvency barrister.

View all posts by Sam Hopper

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One Comment on “First comments the new CTRS Regs”

  1. Alan Wein Says:

    Brilliant summary Sam. Together with Paul Nunan and Mark Schramm – all issues succinctly covered – well done.

    Reply

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