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.

In breaking news, the CTRS will be extended to 15 March 2022.

In a press release today, the Minister for Small Business stated that:

The extended scheme will be available to businesses with an annual turnover of $10 million or less and which have suffered a decline in turnover of at least 30 per cent due to COVID-19.

Landlords will be required to provide continued proportional rent relief in line with a reduction in turnover.

…

The eviction moratorium will continue. Landlords will not be able to lock out or evict tenants without undertaking mediation through the VSBC.

The new regulations will take effect from 16 January 2022. Tenants and landlords should abide by the conditions in their existing agreement. Small and family businesses that already have a deferment will have more time for repayments as a result of this extension.

Eligible commercial landlords that have provided rent relief to their tenants have received support through the $20 million Commercial Landlord Hardship Fund. They will continue to do so while their tenants are eligible for the scheme.

The full text of the Minister’s press release is available here: https://www.premier.vic.gov.au/commercial-tenancy-support-extended

More information is available at the VSBC website here: https://www.vsbc.vic.gov.au/news-publication/victorian-government-announcement-commercial-tenancy-relief-scheme-to-be-extended/. That site also notes that:

The ban on rent increases … will continue …

I will post a copy of the new regulations and any amendments to the empowering statute as soon as they are available.

This is just a quick reminder to practitioners acting for tenants who want to claim rent relief for the period 28 July to 30 September 2021 that your request for rent relief is due tomorrow.

There is a precedent application and supporting statutory declaration on the VSBC website that is very easy to complete: see https://www.vsbc.vic.gov.au/news-publication/small-businesses-must-apply-for-rent-relief-by-30-september-to-get-backdated-relief/

Also, remember that both your application AND supporting affidavit AND supporting documents must be in tomorrow if you want to claim rent relief from 28 July 2021 (see reg 28 of the CTRS Regulations).

There is a bit of an ongoing issue about how to deliver the request that I wrote about in my last post.

Section 67 of the CTRS Regulations states that (sorry about the formatting):

67        Giving notices—general

(1)       A notice or other document to be given to a person under the Act or these Regulations by the Small Business Commission must be given—

(a)       by delivering it personally to the person; or

(b)       by leaving it at the person’s usual or last known place of residence or business with a person apparently over the age of 16 years and apparently residing or employed at that place; or

(c)       by sending it to the person by post addressed to the person’s usual or last known place of residence or business; or

(d)       if the person is a corporation— 

(i)        by sending it by post to the registered office in Victoria of the corporation; or

(ii)       by giving it to a person who is an officer of the corporation who is authorised to accept service of notices and who is employed at the registered office of the corporation; or

(e)        by electronic communication in accordance with the Electronic Transactions (Victoria) Act 2000.

(2)       If a notice or other document is to be given to a landlord under these Regulations, in addition to the methods set out in subregulation (1), the notice or document may be given—

(a)       by delivering it to the landlord or to the landlord’s agent or to the person who usually collects the rent; or

(b)       by sending it by post addressed—

(i)        to the landlord at the landlord’s address for service of documents; or

(ii)       to the landlord’s agent at the agent’s usual place of business; or

(iii)      by giving it to a person employed in the office of the landlord’s agent.

You will need to make sure that your method of delivery complies with that section.

Service by email probably requires landlord’s consent, so make sure you have that consent in writing in advance if you want to deliver the documents by email. Otherwise, you will need to use one of the other methods of delivery prescribed by the Regulations.

Sub-regulation 67(2)(a) appears to allow the request to be sent to a managing agent who receives the rent on the landlord’s behalf. However, you will still need the managing agent’s consent (preferably in writing) to send the document by email.

Be careful sending the documents by post as documents sent by post are usually presumed to have been received in the ordinary course of post (which may cause your document to be received late) and the presumption may be rebuttable by evidence that the letter was not received or was received late.

My colleague Davids Darzins of Darzins Legal has also provided some useful material that he has kindly offered to share with readers of this blog. Davids says this:

The VSBC FAQs can only be viewed one FAQ at a time …

I have downloaded each of the FAQs and the answers.  These are set out in the attached PDF.  I have also, for completeness, downloaded and saved Table 1 (Rent Relief Periods); Table 2 (Comparison and Turnover Periods); Table 3 (Reassessment Periods); and the VSBC FAQ on Rent Relief From Before 28 July 2021 document.  I attach a copy of these PDFs for your reference.

With Davids’ consent, I have attached those documents to this post for readers to share.

This will certainly make it easier for those who want to print out the FAQ’s and read them on the couch. However, the VSBC’s FAQs were updated from time to time last year, so readers relying on any particular answers in the attached should cross-reference the current version of the FAQs on the VSBC’s website.

His Honour Justice Croft has returned to sit in the Supreme Court of Victoria as a Reserve Judge for 5 years.

Justice Croft sat as full time for 10 years until late 2019, during which his Honour heard all retail leasing appeals and almost every matter that touched on the Retail Leases Act 2003 (Vic) in that court.

I’m sure that I speak on behalf of the whole leasing community when I say that his Honour’s return to the bench is welcomed by all leasing practitioners.