On 28 July 2021, the Victorian Government announced the re-introduction of the Commercial Tenancy Relief Scheme (New CTRS). The New CTRS is aimed at providing rent relief to small businesses struggling to survive from the various snap lockdowns in 2021. The Bill, which has been introduced into Parliament this week, is largely legislation which provides the Minister for Small Business with powers to introduce regulations to give effect to the New CTRS. The Bill is expected to pass Parliament this week, and there are reports that the accompanying regulations to implement the New CTRS will be introduced and come into effect within the next few weeks. Until the introduction of the New CTRS regulations, the media releases published by the Victorian on 28 July 2021 and 3 August 2021 respectively have already revealed that the New CTRS will largely mirror the previous rent relief scheme (which applied from 29 March 2020 – 28 March 2021), with some key changes. The New CTRS will include the following aspects: Application: The New CTRS will apply from 28 July 2021 onwards. It is not yet clear when the New CTRS will end, however this should be clarified in the Regulations when introduced. Eligibility: The New CTRS will be available to SME businesses with annual turnover under $50 million, where they have suffered a decline in turnover of at least 30% due to the effects of the COVID-19 pandemic. Given that the previous scheme relied on the tenant’s eligibility for JobKeeper (which is no longer applicable), the regulations will need to introduce a separate test to demonstrate decline in turnover. Eligibility will be assessed based on a “one-time” test. This means once a tenant is eligible, it will remain so for the duration of the New CTRS. Turnover calculation: Rent relief will be calculated by comparing turnover for the final quarter of the 2020/21 financial year against turnover from the final quarter of 2018/19. Special arrangements will be put in place to assess decline in turnover for businesses established after the 2018/19 financial year. Reassessment of turnover: The Victorian Government has indicated there will be a mandatory reassessment of turnover throughout the New CTRS, in order to ensure fair treatment for both landlords and tenants. We assume this will mean that eligible tenants may need to provide ongoing turnover decline information to landlords throughout the operation of the New CTRS, however we await clarification from the Regulations when introduced. Proportional Rent Relief: Landlords will be required to provide proportional rent relief in line with the tenant’s reduction in turnover. Of that rent relief, at least half must be waived rent, and the remainder must be deferred. Mediation: The Victorian Small Business Commission will again facilitate mediation services between landlords and tenants. Support for landlords: Landlords who provide rent relief to eligible tenants will potentially have access to a $20 million hardship fund, and be entitled to apply for up to 25% land tax relief. Existing deferred rent payments to be frozen: Where a tenant is already repaying deferred rent pursuant to any existing rent relief agreement under the previous scheme, those payments will be frozen and a tenant will not be required to make any repayments until 15 January 2022 onwards. Moratorium on evictions: Landlords will again be prohibited from evicting tenants eligible for the New CTRS, and can only do so after receiving a determination by the Victorian Small Business Commission. How we can help Russell Kennedy will provide further updates on the New CTRS once the legislation has been passed, and once we have any further information on the Regulations which will apply for the New CTRS. For further information on the Commercial Tenancy Relief Scheme, please contact Mark McKinley, Emma Dunlevie or Melanie Young. If you would like to keep in touch with Alerts and Insights from our expert Leasing team, you can subscribe to our mailing list here.