Guide for commercial tenants to new laws banning evictions

For many commercial tenants, now is as tough time financially as ever. However new Victorian regulations could be a silver lining.

If you are a commercial tenant, the new regulations mean:

• If you are eligible for the Jobkeeper wage subsidy scheme, you can request a rent reduction, rent waiver or rent deferral during the period 29 March 2020 to 29 September 2020.
• The request needs to be in writing and can be made more than once during this period.
• The landlord then needs to consider the request and provide an offer to the tenant which considers the tenants reduction in turnover, ability for the offer to allow the tenant to keep paying rent, and the landlords own financial situation – such as their ability to pay their mortgage.
• The landlord’s offer must contain at least 50% of the tenant’s rent being forgiven.
• Any rent deferred must be paid off over 24 months or longer if the lease term is longer.
• A landlord must also consider waiving the tenant’s outgoings if the tenant cannot operate the business. This would apply to pubs, clubs and gyms that have been shut down.
• If the tenant does not agree with the landlord’s offer, they can force the landlord to go through mediation through the Victoria small business commissioner.

The new Regulations mean that landlord’s risk financial penalties if they don’t consider a tenant’s financial situation, forgive rent and have a genuine conversation with the tenant about this.

A tenant that is properly advised by working with our business lawyers will be able to make sure their arrangement is within the scope of the regulations which are confusing. Our business lawyers will work with you to set up a long term arrangement with the landlord that will see you operate the business out of the uncertainty of Covid19 and the lease continue for its full term rather than end up with an eviction shortly after the new Regulations expire.

Our business law team of Lachlan Edwards and Siobhan Liston are available to assist you navigate the new regulations. If you would like to discuss this further, you can call Lachlan Edwards on 0427 916 442 or Siobhan Liston on 03 5445 1067 for assistance.