The regulations surrounding the Victorian Commercial Tenancy Relief Scheme have been released this morning, and are available here.
Some of the important notes for tenants and landlords to consider:
- Available to entities with less than $50m turnover for the 2021 financial year.
- Turnover includes the turnover of any connected entities or affiliated entities.
- The turnover test period is any consecutive 3 month period between the 1st April 2021 to the 30th September 2021.
- The comparison period is the same 3 months period in 2019 (alternative periods may exist when tenants were not trading before then).
- Alternative comparison periods may also exist where:
- There was a business acquisition/sale
- There has been a restructure
- There has been a substantial increase in turnover (50% in the 12 months prior, 25% in the 6 months prior or 12.5% in the 3 months prior)
- You have been affected by drought or natural disaster, or a sole trader/small partnership affected by sickness, injury or leave
- You have irregular turnover or temporarily ceased trading
There is protection for non-payment of rent or outgoings during this time.
To qualify tenants must provide either their profit and loss statements, business activity statements, bank statements or a statement from an accountant (us!), as well as a statutory declaration within 14 days of requesting relief.
The rent relief must be at least proportionate to the reduction in turnover, and at least 50% must be waived. Any deferred rent cannot begin until the 15th January 2022, deferred over a term of at least 24 months, and any deferred rent under the 2020 rent relief schemes are to held off until then for eligible tenants. No rent increases are allowed in that time.
We encourage clients to get in contact with us to establish their eligibility and begin discussions with their landlords and legal representatives to assist them access these measures.