What is the Commercial Landlord Hardship Fund 3?

The Commercial Landlord Hardship Fund 3 provides grants to eligible small landlords who may experience hardship as a result of waiving rent for their tenant between 28 July 2021 and 15 January 2022 under the Commercial Tenancy Relief Scheme (CTRS).

Small landlords can apply for a grant of up to $6000 per eligible tenancy.

In cases where landlords are experiencing acute hardship because of the rent waiver agreed with their tenant(s), the grant may be increased to a maximum of up to $10,000 per eligible tenancy.

Applications to the Commercial Landlord Hardship Fund 3 will close at 11:59pm on 15 January 2022, or when funds are exhausted.

What is the Commercial Tenancy Relief Scheme?

The Commercial Tenancy Relief Scheme (CTRS) has been introduced by the Victorian Government from 28 July 2021 until 15 January 2022 to ease the financial hardship faced by commercial tenants as a result of the coronavirus (COVID-19) pandemic.

Am I eligible for a grant?

Landlords can apply for a grant if they meet all the eligibility criteria outlined in the program guidelines:

• be a landlord with total taxable landholdings of less than $3 million, including part holdings but excluding principal place of residence, or where a property is held on trust, the total taxable landholdings of the trust must be less than $3 million
• be able to confirm property ownership by Customer Number shown on the State Revenue Office Land Tax Assessment Notice or by a 2020-21 Municipal Rates Notice
• be the landlord of property subject to a Commercial Tenancy Relief Scheme eligible tenancy
• be a landlord with a current lease agreement that provides rent relief to the tenant(s) under the Commercial Tenancy Relief Scheme for any period between 28 July 2021 and 15 January 2022.

Landlords must attest that commercial rent represents more than 50% of their total gross income for the 2019-20 financial year.

Landlords must provide information about the rent relief agreed with your tenant(s) using the Landlord acceptance letter (DOCX 48.82 KB) (or similar) when applying.

I am the landlord of a commercial property that is tenanted. I also occupy the tenanted property. Am I eligible to apply?

No. The landlord must not occupy an eligible tenancy that is subject to an application to the Commercial Landlord Hardship Fund 3.

Who can apply for a grant?

Individuals and incorporated entities that meet the program eligibility criteria may apply for a grant.

Can I apply for a grant from the Commercial Landlord Hardship Fund 3 if I received a grant under rounds one or two?

Yes, if you meet the eligibility criteria. Small landlords who received a grant under either or both of the funds that operated between 21 August and 31 October 2020, or 1 January 2021 and 28 March 2021 can apply. However, please note the eligibility criteria has changed. All applicants should read the guidelines and eligibility criteria carefully before applying.

What has changed since the second Commercial Landlord Hardship Fund, which was open from 1 January to 28 March 2021?

Key updates in the Commercial Landlord Hardship Fund 3 include:

• the available grant amount has increased from $3000 to $6000
• small landlords can request acute hardship consideration and apply for a grant of up to $10,000
• landlords must attest that commercial rent represents more than 50% of their total gross annual income for the 2019-20 financial year or any financial year thereafter
• the landlord must provide a rent waiver to their tenant(s) for any part of the period of 28 July 2021 and 15 January 2022
• forms of acceptable identification have been updated (see forms of identification below).

What is considered to be acute hardship?

Acute hardship is where the commercial rent received by the landlord represents at least 70% of their total gross annual income for the 2019-20 financial year. The landlord must not be either the owner occupier or related to the tenant.

To be considered for acute hardship, landlords must have waived more than $6000 in rent between 28 July 2021 and 15 January 2022.

How do I apply for acute hardship?

Landlords requesting acute hardship consideration must submit a Qualified agent letter (DOCX 58.62 KB) that includes confirmation that:

• commercial rent represents at least 70% of their total gross annual income for the 2019-20 financial year
• the landlord is neither an owner occupier nor a related party of the tenant.

What forms of identification can I use to prove my identity in my application?

You may use the following forms of identification in your application:

• Driver licence
• Medicare card
• Australian visa
• Australian passport

If you cannot provide any of the above forms of identification or have any trouble completing the application and need help, please call the Business Victoria hotline on 13 22 15.

How do I know if my total taxable landholdings are under $3 million?

Your Land Tax Assessment Notice issued by the State Revenue Office will state the total value of your taxable landholdings. Small landlords with landholding of $250,000 - $3 million must use this method.

Small landlords with landholding up to $250,000 should use their 2020-21 council or municipal rates notice which includes a site value.

Is my principal place of residence included in the taxable landholdings?

No. Your principal place of residence is excluded from taxable landholdings.

I am the small landlord of a property held in trust. How are taxable landholdings considered to assess my eligibility?

Total taxable landholdings used to assess eligibility for this grant will be those of the trust in which a property is held. The total taxable landholdings must be under $3 million.

Example:
A small landlord holds a property on behalf of a Family Trust with a total taxable landholding under $3 million. The landlord provides rent relief to a tenant under the Commercial Tenancy Relief Scheme.

The landlord may apply for a grant of up to $6000 and the Family Trust taxable landholding will be used to assess eligibility.

Can business owners who own their premises apply for a grant?

Yes, but the property must be held by a different legal entity to the business. For example, business owners that own their premises in a family company or trust can apply for a grant from the Commercial Landlord Hardship Fund 3.

Business owners who own their premises are not eligible for acute hardship.

Can I apply for this grant if I live outside Victoria and hold properties within Victoria with tenants eligible for rent relief under the Commercial Tenancy Relief Scheme?

Yes. There is no proof of Victorian residency required to apply for this grant. Applicants must however be an Australian citizen or resident.

Can I complete an application on behalf of someone else?

Yes. You can complete an application on behalf of an eligible landlord if you have their permission. You will need to retain evidence in the form of a letter that the landlord has given you permission to apply on their behalf.

What rent relief do I need to provide to my tenant to be eligible for a grant?

Eligible small landlords and their tenants must have agreed a rent waiver or non-payment of rent between 28 July 2021 and 15 January 2022 under the Commercial Tenancy Relief Scheme and completed the following process:

Step 1 – Receive a written request for rent relief made by a commercial tenant(s)
Step 2 – Respond to the tenant(s) in writing within 14 days, or the agreed timeframe
Step 3 – Agree to reduce rent in proportion to their tenant’s downturn in turnover
Step 4 – At least 50% of the agreed rent relief must be a rent waiver
Step 5 – Provide the tenant(s) with a Landlord acceptance letter (DOCX 48.82 KB) detailing the agreement.

Only rent waivers will be considered for a grant from this fund. A waiver is non-payment of rent.

How do I provide evidence of a rent waiver?

Small landlords need to provide the following documents to demonstrate a rent waiver that meets the requirements of the program:

• the commercial lease agreement and rent payable before the property became eligible under the Commercial Tenancy Relief Scheme
• a Landlord acceptance letter (DOCX 48.82 KB) showing details of the agreed rent relief, including:
  • rent relief start and end dates
  • total dollar amount of monthly rent (excl. GST) and per cent of rent waived
  • dollar amount (excl. GST) and per cent of rent deferred (if any).

Can I apply for a grant if I have provided a full rent deferral to my tenant?

No. To be eligible for this fund, a rent waiver of at least 50% of the agreed rent relief must be provided through the Commercial Tenancy Relief Scheme.

Only rent waivers will be considered for a grant from this fund. A waiver is non-payment of rent. A deferral is a delayed rent payment.

What if I've agreed to rent relief with my tenant that doesn't meet the CTRS rules?

To be eligible for the Commercial Landlord Hardship Fund grant, the rent relief must meet the CTRS requirements (for example, proportionate rent relief). An existing, non-compliant agreement would need to be revised and the landlord would need to provide evidence of this in the application to this fund.

Landlords must provide information about the rent relief agreed with your tenant(s) using the Landlord acceptance letter (DOCX 48.82 KB) (or similar) when applying.

Small landlords and their tenants may consider accessing free mediation and dispute resolution support via the Victorian Small Business Commission to negotiate a fair outcome.

Can a small landlord that has provided rent reductions to multiple tenancies access more than one grant?

Yes. The landlord may be entitled to more than one grant if they meet all the eligibility criteria for each tenancy. Small landlords must apply for each tenancy grant in a separate application, i.e. one application form per eligible tenancy.

Example:
A landlord has a total taxable landholding under $3 million and has provided rent reductions to three separate tenants that are eligible for rent relief under the CTRS. The landlord may apply for up to $6000 for each tenancy in three separate grant applications.

Is the grant available to part-owners of properties with tenancies that are eligible for rent relief under the CTRS?

Yes. A small landlord with an ownership share in a property where the tenant has been provided with rent relief under the Commercial Tenancy Relief Scheme can apply if they meet the program eligibility criteria. Any grant will be proportionate to their interest in the property.

Each landlord must provide information about the rent relief agreed with your tenant(s) using the Landlord acceptance letter (DOCX 48.82 KB) (or similar) when applying.

Example:
A landlord with a 25% share in a property where the tenant(s) receives a rent reduction under the Commercial Tenancy Relief Scheme, may apply for up to $1500 (25% of $6000).

Other owners with a share in the property may also apply if they meet the eligibility criteria.

The property value will not impact each part owner’s eligibility for a grant, as long as their individual taxable landholdings are under $3 million according to the State Revenue Office site valuation.

Can my partner and I put in a joint application if we are joint owners of a commercial property with a tenant who is eligible for rent relief under the Commercial Tenancy Relief Scheme?

No. Each part-owner that meets the program eligibility criteria must submit a separate application for their share. Any grant will be proportionate to their interest in the property.

Can a small landlord obtain more than one grant on a single tenancy?

No. Only one grant is available for a landlord’s interest in any tenancy eligible for the Commercial Tenancy Relief Scheme.

Can I still apply for a grant if the commercial property is used for residential purposes?

Yes. If your property is subject to a commercial lease, and meets the other eligibility criteria, it is eligible.

Example:
A landlord owns an apartment that is subject to a commercial lease with a hotel company that operates serviced apartments. If the landlord has provided a rent waiver through the Commercial Tenancy Relief Scheme, the landlord may be eligible for a grant, providing they meet other criteria.

Can I still apply if my tenant is not eligible for rent relief under the Commercial Tenancy Relief Scheme?

No. To be eligible for a grant, your tenant must be eligible for rent relief under the Commercial Tenancy Relief Scheme.

How do I know if my tenant is eligible for rent relief under the Commercial Tenancy Relief Scheme?

You and your tenant should refer to the Commercial Tenancy Relief Scheme and its regulations for the most up-to-date advice.

What steps can small landlords and tenants take to resolve tenancy matters?

If a commercial tenant is having trouble paying rent as a result of the coronavirus (COVID-19) pandemic, the Victorian Small Business Commission recommends:

• tenants keep paying what they can afford
• landlords work out their financial situation
• both tenants and landlords talk to each other to try and reach an agreement on rent relief.

More information about how to manage dispute resolution and the Commercial Tenancy Relief Scheme can be found by visiting the Victorian Small Business Commission website.

What if a small landlord and their tenants are unable to negotiate a rent reduction in accordance with the regulations?

Parties will continue to have access to the Victorian Small Business Commission free mediation and dispute resolution services.

You can apply for free mediation with the Victorian Small Business Commission to resolve your rent dispute, making sure you include a copy of your lease.

If you are unable to reach agreement, you may apply to Victorian Civil and Administrative Tribunal for a resolution.

What other supports are available for landlords who have provided rent relief under the Commercial Tenancy Relief Scheme?

The Victorian Government has announced it will provide further 2021 land tax relief for landlords who have provided rent relief to commercial tenants between 28 July 2021 and 15 January 2022 under the Commercial Tenancy Relief Scheme. For information about Land Tax Relief for landlords, visit State Revenue Office - Coronavirus land tax relief.

Can I have the application information translated?

Applications must be submitted in English. Translated information materials to support applications will be available through the Business Victoria website shortly.

What is acceptable as an alternative to the Landlord Acceptance Letter template?

Landlords may provide a copy of the rent relief agreement made with their tenant(s) that includes:

• rent relief start and end dates
• total dollar amount of monthly rent (excl. GST) and per cent of rent waived
• dollar amount (excl. GST) and per cent of rent deferred (if any).

A waiver is non-payment of rent. A deferral is a delayed rent payment.

Can I apply to the fund if my tenant(s) occupy the property under a sub-lease?

No. You must be the property owner and landlord under a head-lease agreement to be eligible.

A head-lease is the lease under which a sub-lease is granted.

What is meant by total annual income?

If the landlord is an incorporated entity or a business, total annual income refers to all ordinary income you earned in the course of running a business for the income year, that is required to be declared to the Australian Tax Office as income.

If the landlord is not a business, total annual income means all the income you receive from your employment (job), pensions, annuities, government payments, investments, business and foreign income, that is required to be declared to the Australian Tax Office as income.

My self-managed superannuation fund (SMSF) owns a commercial property. Are contributions to my SMSF considered as income?

Yes, contributions are considered in total annual income.

Examples of grant funding eligibility

Example one

Kate owns one property with a site value of less than $3 million and has a tenant, Angelo, who applied for rent relief under the CTRS.

Kate has provided Angelo with rent relief of $14,000 over three months, of which at least $7000 is in the form of a waiver. The rent relief applies between 28 July 2021 and 15 January 2022.

Outcome

• A maximum grant of $6000 is payable to Kate, subject to her meeting all eligibility criteria.
• Kate cannot make further applications in relation to this tenancy under this Commercial Landlord Hardship Fund 3 program.

Example two

Thao owns a property with a site value of less than $3 million. Thao’s property has two tenancies that meet the requirements of the CTRS.

Thao has provided both tenants with rent relief of $14,000 each over three months, of which at least $7000 each is in the form of a waiver. The rent relief applies after 28 July 2021.

Outcome

A maximum payment of $12,000 is payable to Thao (two grants of $6000), subject to Thao meeting all eligibility criteria.

Thao cannot make further applications in relation to either tenancy under this Commercial Landlord Hardship Fund 3 program.

Example three

Nick owns two properties and together, the properties have a site value of under $3 million. Only one of Nick’s properties has a tenancy that meets the requirements of the CTRS.

Nick has provided this tenant with rent relief of $14,000 over three months, of which at least $7000 is in the form of a waiver. The rent relief applies after 28 July 2021.

Outcome

A maximum payment of $6000 is payable, subject to Nick meeting all eligibility criteria.

Nick cannot make further applications in relation to this tenancy under this Commercial Landlord Hardship Fund 3 program.

Example four

Two landlords, Maria and Soraya, each have a 50% interest in one property with a site value of less than $3 million. The property has a tenancy that meets the requirements of the CTRS.

Maria and Soraya have provided the tenant with rent relief of $14,000 over three months, of which at least $7000 is in the form of a waiver. The rent relief applies after 28 July 2021.

Outcome

Maria and Soraya must submit separate applications to the fund.

Two $3000 grants are payable, one to each landlord, subject to each meeting all eligibility criteria.

Neither Maria nor Soraya can make further applications in relation to this tenancy.

Example five

Abdul owns a commercial property and has experienced acute hardship as a result of reducing rent for his commercial tenants.  Abdul's gross income is $80,000, including $20,000 from a pension. His tenants have experienced a 50% downturn in revenue and therefore meet the requirements of the CTRS. The tenanted property meets the requirements of the CTRS.

Abdul has provided the tenant with rent relief of $14,137 over three months, of which at least $7680 is in the form of a waiver. The rent relief applies after 28 July 2021.

Outcome

Abdul must apply to the Commercial Landlord Hardship Fund 3 and provide a Qualified Agent letter in support of acute hardship consideration, showing that commercial rent represents at least 70% of his total gross annual income for the 2019-20 financial year.

A maximum payment of $7680 is payable, subject to Abdul meeting all eligibility criteria for the fund and for acute hardship consideration.