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Victorian Government extends COVID-19 ban on evictions and rental increases

The Victorian Government has announced it will be extending the ban on evictions and rental increases for residential and commercial tenants until the end of the year, except in special circumstances. What happens next?
2
minute read

The Victorian Government has announced it will be extending the ban on evictions and rental increases for residential and commercial tenants until the end of the year, except in special circumstances.

The government will also introduce additional measures, which will require commercial landlords to provide rent relief in proportion with an eligible tenant’s drop in turnover going forward. It’s not yet clear if landlords’ obligations to provide rent relief will also be extended (past the current sunset date of 29 September 2020).

The government is encouraging banks to continue working with customers who are struggling to pay their mortgages. Australia’s big banks initially provided loan repayment holidays in response to the pandemic. Whether the banks offer to extend those schemes will likely depend on legislative changes that extend the rent relief period.

The Victorian Small Business Commission (VSBC) will also have capacity to make an order on rent relief if a landlord refuses to respond to rent relief requests. The current legislation does not give the VSBC powers to make orders so how this will actually play out, and the affect it will have on the mediation process, is uncertain at this stage.

Increased land tax discounts – up to 50% – may also be on the cards for eligible landlords, and a fund of $60 million for eligible small commercial landlords will be available via a hardship scheme, providing up to $3,000 per tenancy.

These announcements were anticipated given the current situation in Victoria and Stage 4 lockdown restrictions in place until 13 September. As always, the devil will be in the detail – we won’t know exactly how these new measures will affect landlords and tenants until the amendments to the legislation made.

Keep checking-in with us and we’ll keep you updated.

For now, our BlueRock legal eagles have put together a comprehensive guide to the COVID-19 commercial tenancy relief schemes across each state and territory. It will also include the changes to the Victorian legislation when those amendments are enacted.

Although we expect that these changes will shift the state of play, that doesn't mean that commercial landlords and tenants should not be actively trying to strike deals now – think of it as ‘overtime’ but don’t wait until the siren to kick the final goal.

If you’re in the midst of negotiating rent relief, keep at it. The changes to the legislation may or may not affect the current deal on the table. Reach out to us and we can help guide you through the process – you don’t want to let all that time and effort spent on negotiations go to waste.

If you’re an eligible tenant who has already reached a rent relief agreement with your landlord, you can go back for more. The current legislation enables a tenant to access further rent relief if there has been a material change in their financial circumstances since an agreement was made. We covered this in our recent blog article, Victorian Government $40 Million Rent Relief Support Package For Commercial Tenants, so read more about your rights and obligations if you’ve already put pen to paper.

And, as always, if you're struggling or would like some advice, we're here to help so please reach out.

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