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Why retail tenants must take timely action on rent relief

The Victorian Government has extended the Commercial Tenancy Rent Relief Scheme.

However, changes to the scheme mean that retail tenants must act as soon as possible.

Rent relief agreements must be made between 29 September and 31 December 2020.

When an agreement is reached, it will apply from the date that you write to your landlord. Agreements under the extension are not backdated and commercial tenants are liable for the full rent until an agreement is reached.

There are also several other changes.

Rent relief should be proportionate to the decline in tenant turnover

Previously, the regulations tried to balance the tenant’s reduction in turnover with the landlord’s financial situation. Under the extension of the scheme, the focus is on the tenant’s financial situation.

If you have experienced a 50% reduction in turnover, your landlord must offer rent relief of at least 50%. This can be a mix of rent deferral and rent waiver.

The threshold for eligibility of rent relief remains the same. You must show the following to be eligible:

  1. You hold an eligible lease;
  2. You are an SME with a turnover (turnover excludes Jobkeeper payments you are receiving) of less than $50m;
  3. You are currently participating in JobKeeper; and
  4. You have experienced at least a 30% drop in turnover that is directly attributable to COVID-19 (including the lockdown rules).

Deferred rent cannot be required to be repaid before 31 December 2020

If you have an existing agreement that would otherwise have required deferred rent to be repaid before 31 December, the repayment date is extended. If there is no additional agreement, rent would be due on 1 January 2021.

What should tenants do?

  • Reapply for rent relief in writing as soon as possible even if you have previously applied for rent relief prior to 29 September 2020.
  • Include a statement confirming that you are eligible for rent relief under the scheme (as you hold an eligible lease).
  • Include evidence of your decline in turnover (bank statements, BAS statements or accounting records).
  • Keep paying whatever rent you can pay until you hear from your landlord.

What should landlords do?

  • If your tenant is eligible for rent relief, you must offer it within 14 days of the date of the written request.
  • The relief must be at least proportionate to the decline in turnover, as evidenced by your tenant’s financial statement. You can offer more relief than the decline in turnover, but not less.
  • At least 50% of the rent relief must be in the form of a rent waiver unless otherwise agreed.
  • The rent relief must apply from the date that the written request was sent.

If you are a commercial tenant or landlord needing advice on the Commercial Tenancy Rent Relief Scheme, please contact our office on (03) 9592 3356 or by email –

Why retail tenants must take timely action on rent relief : City Pacific Lawyers

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