18 June 2020 | Reading time: 2 minutes
In our previous blog, we discussed the guidance provided by the Victorian Small Business Commissioner regarding the type of information a landlord can request pursuant to the COVID-19 Omnibus (Emergency Measures) Act 2020 and the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020. This is referred to as the Commercial Tenancy Relief Scheme (CTRS).
The Victorian Government has now published a policy guidance (Guidelines) to further clarify the operation of the CTRS.
Minimising the documentation requirements.
Providing rent relief to tenants should be based on the financial information provided by the tenant. The information should therefore be kept to a minimum to avoid imposing additional burden on tenants that might already be in financial distress.
The Victorian Government considers excessive requests for documentation to verify financial positions to be inconsistent with the spirit of the CTRS.
Documentation to demonstrate financial circumstances.
The Guidelines clarify that a commercial tenant will only be required to provide one of the following documents to demonstrate its financial circumstances:
The following are considered excessive under the Guidelines and should not be requested by landlords:
There is an expectation that rent relief should be proportionate to the decline in the tenant’s turnover. If the landlord offers rent relief that is not proportionate, the landlord should provide the tenant documentation in relation to their financial position to justify the amount of rent relief offered.
Other key takeaways.
The Guidelines also include the following key takeaways:
We can help.
The Guidelines provide further clarity to landlords and tenants with regards to their obligation to ‘negotiate in good faith’ under the CTRS.
Whether you are a tenant or a landlord, we can help you navigate this process to ensure compliance with the CTRS and negotiate the best outcome for you.