COMMERCIAL PROPERTY, SALES & LEASINGCORONAVIRUS COVID-19 PANDEMIC

Tenancy rent relief extended as Omicron grip communities

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BOTH the NSW and Victorian governments have extended their commercial tenancy rent relief schemes as the Omicron wave forces shoppers to stay at home, wreaks havoc on staff availability and halts supply chains.

NSW Treasurer Matt Kean last week announced an extension until 13th March that will allow tenants with an annual turnover of less than $5 million and turnover hit by at least 30% to stay in the property without fear of their lease being terminated even if they can’t pay rent.

At least half of rent relief given must be in the form of a waiver, with the remainder a deferral.

Eligible landlords can access the $40 million Commercial Landlord Hardship Fund, which provides small commercial or retail landlords with a monthly grant up to the value of any rental relief provided, to a maximum of $3,000 per month per property.

“Small business is the engine room of our economy and we need to make sure we support impacted businesses through this latest Omicron wave,” Kean said.

“With staff shortages and reduced foot traffic, many businesses are struggling at the moment but the ability to negotiate rent will give them a buffer so they can keep the lights on now and recover more quickly.”

The move was slammed by Property Council NSW.

“This decision should be seen for what it is: government intervention into legal contracts and a compulsory transfer of income from one business to another,” Property Council NSW

Executive director Luke Achterstraat said.

“Such radical measures are not what ‘living with COVID’ is supposed to be about.

Australian Retailers Association CEO Paul Zahra said the body would like to see this extended to small businesses in every state and territory with a threshold of up to $50 million, as was previously.

“We’ve entered unchartered territory with Omicron with small businesses struggling to keep their doors open due to tens of thousands of daily staff isolations and ever-rising supply chain costs” he said.

“This is taking an enormous toll on the retail workforce and small businesses who’ve had to limit their trading hours or close altogether,” he said.

Victoria followed suit over the weekend, extending the Commercial Tenancy Relief Scheme until 15th March.

The scheme will be available to businesses with an annual turnover of $10 million or less and which have suffered a decline in turnover of at least 30%.

Landlords will be required to provide continued proportional rent relief in line with a reduction in turnover. A business with a turnover of 40% of pre-pandemic levels would only be charged 40% of its rent.

As in NSW, at least half would be waived, with the remainder to be deferred. A freeze on rent increases and an eviction moratorium will continue.

Mediation will be provided by the Victorian Small Business Commission if parties cannot reach an agreement.

Eligible landlords that have provided rent relief to will have access to the $20 million Commercial Landlord Hardship Fund while their tenants are eligible for the scheme.

Earlier this month, NSW also extended the land tax relief application period until the end of February for commercial and residential landowners, who may be eligible to receive up to a 100% reduction in land tax if they provided a reduction in rent over the second half of 2021.

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