Victorian rent relief extension prompts review of documentation
Following the announcement that rent relief has been extended in Victoria, SMSF clients who have already documented rent relief on the basis of this relief expiring at the end of September may need to review these documents, says an industry lawyer.
In response to the lockdown in Victoria, the Victorian government this month announced it would extend the ban on evictions and rental increases until the end of the year, increase assistance and ensure tenant turnover is taken into account in rental negotiations.
Under the extension, evictions will continue to be banned for both residential and commercial tenancies until 31 December, except in specific circumstances. Rental increases continue to be banned for the same period.
Commercial landlords will be required to provide rent relief in proportion with the fall in turnover being experienced by eligible tenants going forward.
DBA Lawyers director Daniel Butler said while it appears the relief is purely based on eviction and no rent increase, residential tenants are able to request a further extension of rent relief from the landlord.
“If the super fund has an arm’s-length tenant in a residential property, they cannot evict them,” he noted.
“Similarly, where you’ve got an arm’s-length commercial property where the tenants are not paying, you won’t be able to evict them and the landlord is required to negotiate in good faith with the tenant in accordance with the Victorian provisions.”
With close to 26,000 agreements for reduced rent registered with Consumer Affairs Victoria in the past four months, Mr Butler said SMSF clients with tenants in difficult financial situations who already had rent relief documentation in place may now need to revisit this documentation.
“A lot of people would have already documented a position and presumably a lot of people documented it on the basis of the relief expiring at the end of September,” Mr Butler said.
“If you’ve done documents which are locked in to expire at the end of September, and [there are] tenants asking for an extension, advisers may once again need to document this.”
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
