Are you a tenant with business premises in Victoria? Did you fail to qualify for rent relief under the Commonwealth Tenancies Relief Scheme and haven’t been able to get any rent relief from your landlord?
Well, we have some great news for hospitality businesses that fell between the cracks and didn’t qualify for rent relief under the Victorian COVID-19 legislation. There is more support available in the form of the Night-time Economy Business Support Initiative!
Night-time Economy Business Support Initiative
The Victorian Government has announced a new $40 million program to support commercial tenants operating licensed pubs, clubs or restaurants under a general, full club or on-premises liquor licence as part of a group. It’s intended to assist operators unable to access rent relief under the Victorian COVID-19 legislation because the business is part of a group that has an aggregated annual turnover greater than $50 million (in the past financial year).
This initiative provides eligible businesses with:
- Specialist Tenancy and Business Advice: reimbursement of up $20,000 for external expenses incurred to access specialist information and advice on tenancy and other business issues to help manage their tenancy during the COVID-19 crisis.
- Mediation Services: free of charge, mediation services to be provided by the Victorian Small Business Commission to assist tenants and landlords to reach a fair and proportionate commercial outcome on rental payments during the COVID-19 period, if tenants and landlords cannot otherwise reach agreement.
- Funding for Commercial Rental Hardship: in cases of rental hardship and despite the tenant demonstrating that they have sought to negotiate in good faith with the landlord, Commercial Rental Hardship financial support may be provided of up to $150,000 per business group to assist tenants to maintain control of the business.
To be eligible for support under the Night-time Economy Business Support Initiative, applicants must meet all of the following eligibility criteria:
- Operate licensed pubs, clubs or restaurants on tenanted premises under a general, full club or on-premises liquor licence as part of a group
- Employ people
- Have an annual turnover of less than $50 million at each individual premises operating within the group
- Hold an Australian Business Number (ABN) and have held that ABN at 16 March 2020
- Have been engaged in carrying out the operation of the business at the tenanted premises in Victoria on 16 March 2020
- Have had a reduction in turnover of at least 30% at one or more individual premises operating within the group since 16 March 2020
- Not qualify for the Victorian Government’s Commercial Tenancy Relief Scheme under the Victorian COVID-19 legislation because the business is part of a group that has an aggregated annual turnover greater than $50 million (in the past financial year).
Businesses that are not registered in Victoria but operate more than one premises in Victoria may apply for support and these applications will be considered on a case-by-case basis.
What if you did qualify under the Commonwealth Tenancy Relief Scheme, but your financial situation has changed?
If you did qualify for the Commonwealth Tenancy Relief Scheme and were able to access rent relief but there has been a material change in your financial circumstances since reaching a rent relief agreement with your landlord, then the good news is that the new support package can also help.
It can often be difficult to predict how your business will fare in the future under normal circumstances, not to mention in the ever-changing landscape that is COVID-19.
By now, many tenants have reached agreements regarding rent relief during the pandemic period. The first lockdown stopped us all in our tracks and businesses had to pivot and find solutions to get through that tumultuous time. In true Aussie spirit, we emerged on the other side with hope and optimism that things would improve and many deals struck with landlords were done on that basis. Daniel Andrews’ announcement that we were heading into a further 6-week lockdown from 11:59 on 8 July 2020 has thrown a huge spanner in the works.
The Victorian Government made provision for such spanners in the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020. If the financial circumstances of a tenant under an eligible lease materially changes after a variation to their lease has been made or an agreement has been reached, the tenant may make a further request to the landlord under that lease for rent relief. To access subsequent rent relief, tenants must follow the process set out in the Regulations – this means giving the landlord the same kind of information that was provided the first time around.
If this is you, you will need to write to your landlord:
- confirming that your lease is an eligible lease and is not excluded from the operation of the Regulations
- attaching information that evidences that the tenant under the lease is an SME entity and qualifies and participates in the JobKeeper Scheme
- requesting further rent relief because there has been a material change to your financial circumstances since your previous agreement was reached. You should also provide evidence of the material change – including details of the reduction in turnover – as your landlord will likely request it.
Unless agreed otherwise, your landlord will have 14 days to make an offer of further rent relief to you. The same considerations that your landlord was required to give the first time around will need to be given again. However, this time, landlords will not be obligated to provide any waivers of rent. Again, parties must negotiate in good faith with a view to agreeing on rent relief.
This hill is likely going to be steeper than the first one, so we suggest engaging an expert to assist with the process.
And don’t forget, if you qualify for the Night-Time Economy Business Support Initiative, you could get reimbursement of up to $20,000 to access specialist information and advice on tenancy and other business issues, which means covering costs for engaging with one of our BlueRock legal experts.
At the moment, businesses can register their interest for the Night-Time Economy Business Support Initiative and more details will be available soon.
If you would like more information on the initiative, assistance with making your application or help in dealing with your landlord, please reach out to us! We’re here to help.