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07 Sep 2020

Victorian COVID-19 Emergency Measures Act amendments for commercial and retail leases and licences

By Alison Kennedy and Henry Matthys

The proposed new provisions would extend temporary COVID-19 measures but are enabling only, so their impact will ultimately depend on any amendments made to the Regulations.

On Thursday 3 September 2020, Consumer Affairs Minister Melissa Horne introduced into the Victorian Parliament the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020.

The main purpose of the Bill, as it relates to commercial and retail leases and licences, is to amend the COVID-19 Omnibus (Emergency Measures) Act 2020 to extend the application of that Act until 26 April 2021. This extension is necessary to extend some or all of the components of the existing Victorian Commercial Tenancy Relief Scheme beyond 29 September 2020. Additionally, the Bill proposes to amend the Residential Tenancies Act 1997 to extend temporary COVID-19 measures relating to residential tenancies to 28 March 2021, or such later date (not being after 26 April 2021) as may be fixed by the Governor in Council.

In addition to extending the operation of the Act as it relates to commercial and retail leases and licences, the Bill also proposes to change the meaning of "eligible lease" under the Act. At present, section 13 of the Act defines an "eligible lease" to be a retail lease, or non-retail commercial lease or licence that was in effect on 29 March 2020 and under which the tenant:

  • carries on a business or is a non-profit body and has a likely annual turnover in the current financial year of less than $50 million (or its annual turnover in the previous financial year was less than $50 million) (SME Entity requirement); and
  • is an employer who qualifies for, and is a participant in, the JobKeeper Scheme (JobKeeper Requirement).

The Bill removes the SME Entity Requirement and the JobKeeper Requirement from the Act (both of which are defined by reference to Commonwealth legislation) and allows the definition of "eligible lease" to be prescribed by the COVID-19 Omnibus (Emergency Measure) (Commercial Leases and Licences) Regulations 2020. According to the Explanatory Memorandum accompanying the Bill, this change proposes to permit the prescribing in Regulations of current eligible lease requirements, including the SME Entity Requirement and the JobKeeper Requirement. This will allow future adjustment if Commonwealth legislation determining eligibility for the JobKeeper scheme is amended, and may be particularly important given the JobKeeper scheme is not currently expected to extend past March 2021.

The Bill also proposes to expand the scope of Regulations which can be made under the Act. If passed, additional Regulations will be able to be made for matters, including:

  • the making of binding orders directing landlords under eligible leases to give rent relief to tenants;
  • the process for rent relief applications by tenants including the content of rent relief applications and documents that may accompany applications;
  • other aspects of the rent relief application process and related requirements; and
  • the review and enforcement of binding orders by VCAT.

This increased scope of Regulation-making power will allow the Victorian Government to provide more clarity and certainty to landlords and tenants in the rent relief application process, and in the enforcement of the Commercial Tenancy Relief Scheme.

The proposed new provisions are enabling only, meaning that their impact (if they are passed) will ultimately depend on any amendments made to the Regulations under the Act. Further updates will accordingly follow.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.