Vic government announces free mediation service for commercial tenancy disputes

The Victorian government’s mediation service to help small and medium business tenants and landlords reach a fair agreement in rent disputes, as a result of coronavirus, is in effect.

The service is provided through the Victorian Small Business Commission (VSBC), and is part of the government’s commercial tenancy relief scheme.

The scheme provides a six-month moratorium on evictions for the non-payment of rent for small businesses with an annual turnover of under $50 million that are participating in JobKeeper, backdated to 29 March.

It also allows eligible small-and-medium sized businesses to negotiate rental relief that is in line with COVID-19 related reductions in turnover, with a stipulation that 50 per cent of the relief is a waiver, with remaining rent deferred.

Minister for Small Business Adem Somyurek said the relief scheme was about helping tenants and landlords through the COVID-19 crisis.

“The tenancy relief scheme is about ensuring that small businesses and landlords can maintain their business and an income,” he said.

“If both parties are unable to reach an agreement, the Victorian Small Business Commission is there to assist both parties in reaching a fair outcome.”

Regulations to deliver the scheme implements commercial tenancy principles agreed by the National Cabinet.

Since March 23, the VSBC has received more than 1,200 enquiries about commercial leases in relation to coronavirus, 81 per cent of which have been about rent relief and the National Cabinet’s commercial leasing code.

About a third of these inquiries originated from tenants who are struggling to pay their rent, with a further 18 per cent coming from landlords whose tenants have stopped paying rent.

Victorian Small Business Commissioner Judy O’Connell said it was vital that tenants and landlords communicate as early as possible to try to reach an agreement.

The VSBC also recorded a 100 per cent increase in applications for rental dispute mediation in April compared to the previous month, with two out of three relating to the commercial tenancy relief scheme.

Landlords who provide tenants impacted by coronavirus with rent relief may be eligible for a 25 per cent reduction on their property’s 2020 land tax as part of the Victorian government’s $1.7 billion Economic Survival Package.

Commercial tenants and landlords requiring advice or help in resolving their rental disputes can access the VSBC’s free mediation service by calling 13 87 22.