The Victorian government introduced the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill to parliament on 3 September 2020 and it passed the Legislative Assembly on 4 September 2020.
It serves 4 principal purposes:
- It extends the operation of:
(a) Part 2.2 of the Covid-19 Omnibus (Emergency Measures) Act 2020 (Vic) (Original Act) – being the part dealing with Retail and non-Retail leases and licences – until 26 April 2021; and
(b) Section 615 of the Residential Tenancies Act 1997 (Vic) being part of new Part 16, inserted by Part 4.1 of the Original Act – being the part dealing with Residential Tenancies – until 28 March 2021 (or a later date by Order of the Governor in Council being not later than 27 April 2021).
- It amends the Original Act by:
(a) Adding a definition of "specified rent relief".
(b) Deleting the definitions of "qualifies for the JobKeeper scheme" and "SME entity".
(c) Amending the definition of "eligible lease" by:
(i) deleting the definition of "eligible lease" contained in Section 13 of the Original Act; and
(ii) replacing it with a definition which refers to a specified class of lease, "that is prescribed" (being a class that will be identified in the regulations), that is operational from "the day the first regulations made under section 15 of the original act come into operation".
- It provides for 13 more categories of Regulations that may be made by the governor in council on the recommendation of the Minister for Small Business, to include, amongst other things:
(a) the making of orders directing landlords to make "specified rent relief" to tenants under eligible leases;
(b) ancillary provisions dealing with amendments and enforcement of such "binding orders"; and
(c) requiring certain material to be verified by statutory declaration (including material forming the basis of any application for rent relief).
- Replacing the requirement to consult the Minister for Jobs, Innovation and Trade, with the requirement to consult the Minister for Industry Support and Recovery.
The proposed changes are a cause for some concern.
The amendment to the definition of "eligible lease" means that the definition can be inserted (and subsequently amended) by regulation alone. This means that the definition of eligible lease is not fixed, and can be changed at any time, by a decision of the Minister for Small Business.
In addition, it appears that whatever definition is adopted is intended to have the effect of retrospectively, as the definition operates from the date the first regulations under section 15 of the Original Act were promulgated, which were made on 1 May 2020, but taken to have been operational from 29 March 2020.
The second reading speech proposes this amendment to enable alterations to make it clear that sole traders are covered by the definition. However, we will all have to await the precise terminology.
Additionally, it is now apparent that the Small Business Commissioner is going to be given powers to impose orders on Landlords and Tenants. The second reading speech notes,
"To address this issue, this Bill also enables the making of regulations to enable the VSBC to make an order where this is considered fair and reasonable in all the circumstances. It is intended that the VSBC would use these additional powers to resolve disputes between the parties, in particular, where a landlord is consistently failing to respond to VSBC pre-mediation requests to negotiate in good faith."
The extent, the breadth, and the circumstances of such power are yet to be revealed. Watch this space.
Ultimately, the detail will be in the Regulations, which have not yet been presented. So we have to wait to see what the real impact will be.
And for Commercial Leases, these extensions are provided for until 26 April 2021.