Guidance for Victorian tenants seeking rent relief: what information can a landlord request?.

On 1 May 2020, the Victorian Government passed the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Regulations).

As noted in our previous blog, the Regulations:

• apply from 29 March 2020 to 29 September 2020 and outline a rent relief process for tenants experiencing financial hardship as a result of COVID-19; and
• do not specify what financial information the tenant should provide the landlord.

In much anticipated clarification for tenants and landlords, the Victorian Small Business Commission has now provided guidance on the types of financial information a landlord can request from a tenant to help inform their offer of rent relief.

What information is appropriate for a landlord to request?

A landlord can request any turnover information:

• extracted from an accounting system;
• extracted from business activity statements; or
• provided by the tenant to a financial institution.

What information is not appropriate for a landlord to request?

A landlord should not request:

• future cash flow projections;
• balance sheets, profit and loss, or year to date financials; or
• the tenant’s bank balance.

The tenant is not required to have their financial information verified or audited by a third party such as an accountant. Further, a landlord should not require a letter of comfort on the financial information.

The clarification now provided by the Victorian Small Business Commission is extremely useful especially in relation to aspects of the Regulations which have, until now, been considered ambiguous and unclear.

We can help.

If you are a landlord or a tenant dealing with rent relief negotiations, we can help you navigate this process accordance with the Regulations.

For details of all of our COVID-19 tips and updates, visit the Bespoke COVID-19 Hub on Retail & Commercial Leasing.