The Victorian government has extended its moratorium on commercial tenancy evictions and rent increases until the end of 2020 in response to the continuing COVID-19 pandemic and Melbourne lockdown.
Under the extension, evictions will continue to be banned for both residential and commercial tenancies until December 31. The restrictions were originally due to expire at the end of September.
The announcement was made by Victorian Treasurer Tim Pallas at Thursday’s daily COVID-19 briefing.
Mr Pallas also outlined a new $60 million fund for eligible commercial landlords experiencing hardship, providing up to $3000 per tenancy. Details of the eligibility criteria are yet to be announced.
In addition, commercial landlords that are participating in rental reduction agreements may now be eligible for a 50 per cent reduction in land tax, up from 25 per cent.
As part of the announcement the Victorian Small Business Commission (VSBC), which has been overseeing commercial tenancy rent negotiations, will have greater powers to enforce a rental reduction order on a landlord who refuses to respond to a tenant’s requests for rent relief.
Commercial landlords will also be compelled to provide rent reductions that are proportionate to a tenant’s reduced turnover – something which so far had only been “aspired to”, according to the Treasurer.
“So, up until now, that proportionality principle has been aspired to, but we will now make it a very clear and expressed intention that, if you’re identifying a downturn in your capacity, your turnover, then you should have an expectation that that is similarly reflected in terms of the rent relief that you get,” Mr Pallas said.
The VSBC has fielded more than 7900 rent-related inquiries from small business owners and landlords over the past four months.
According to the government, 90 per cent of negotiations that have needed mediation have resulted in tenants and landlords reaching “common ground”.
“The partnership already shown has been remarkable. To get through this though, all of us – tenants and landlords, businesses and government – need to continue working together,” Mr Pallas said.
The Property Council of Australia welcomed the Victorian government’s move to further reduce land tax for landlords but expressed caution over other aspects of the announcement.
“We welcome the additional land tax relief announced and will work with the State Government on the technical detail of proposals to introduce additional obligations on landlords,” Victorian Executive Director, Cressida Wall, said.
“The extension [of the eviction moratorium] will push many landlords to their limits or beyond. Landlords cannot keep propping up the system… As the crisis goes on, we will need goodwill and action from both banks and governments to ensure that these businesses do not go under and take down the economy with them,” she added.