What is the Commercial Landlord Hardship Fund?
The Commercial Landlord Hardship Fund (the Fund) has been created to assist small, private individual and joint-owner landlords who may not have the financial capacity to provide a rent reduction to their tenants under the requirements of the Commercial Tenancy Relief Scheme (CTRS).
Through the Fund, the Victorian Government is providing grants of up to $3,000 per tenancy to eligible landlords who may be experiencing hardship due to the reduction in rent under the CTRS.
Am I eligible for a grant?
You are eligible if you meet all the following criteria:
You are a private individual (i.e. a person) or joint landlords who are private individuals, and not a Trust, Self-Managed Superannuation Fund, or any other incorporated entity.
You are the sole owner, or joint owner with other private individuals, of a leased commercial property and your individual total taxable landholdings are under $1 million as evidenced by your 2020 Land Tax Assessment or 2019-20 Municipal Rates Notice. The $1 million total landholding threshold applies to all properties excluding your principal place of residence.
The commercial property is in Victoria and is leased to a tenant that is eligible for rent relief under the Commercial Tenancy Relief Scheme (CTRS).
You are experiencing, or will experience, financial hardship as a result of reducing rent for your tenant/s, who have sought rent relief under the CTRS.
Why is the grant restricted to individuals and joint owners?
This grant recognises that many small private individual landlords rely on income from rent to cover living expenses. They are more vulnerable to financial hardship, with less capacity to absorb the financial impact of providing rent reductions as required under the CTRS.
Incorporated entities have protection under Commonwealth legislation against bankruptcy and, in general, have greater financial resilience and resources than small private individual landlords.
How do I know if my total taxable landholdings are under $1 million?
Your 2020 Land Tax Assessment notice will state the total value of your taxable landholdings.
If you are not subject to land tax because your total taxable landholdings are less than $250,000, you can refer to the Site Value on your 2019-20 council or municipal rates notice.
Can I apply for this grant if I do not live in Victoria but hold properties within Victoria with CTRS eligible tenants?
Yes. There is no proof of residency required to apply for this grant.
Can I complete application on someone else’s behalf?
Yes. You can complete an application on behalf of an eligible landlord if you have their permission.
Is my principal place of residence included in the taxable landholdings?
No. Your principal place of residence is not included.
What rent reductions are required to be eligible for the grant?
Landlords must have provided the tenant with at least 30 per cent reduction from the total rent, of which half or more is in the form of a waiver for the equivalent of a minimum three-month period. This can be prior to or after the commencement of the fund on 21 August 2020.
Landlords can claim against rent waivers that have occurred in the three months prior to 21 August 2020 which is the date of this fund’s commencement. Future rent waivers that have been agreed to with the tenant, consistent with the regulations that at least meet the 30 per cent rent reduction requirement for the equivalent of a three-month period up to 31 December 2020, may also be claimed.
How do I provide evidence of a rent waiver?
To demonstrate they have provided a rent waiver which meets the requirements of the program, landlords need to provide evidence of:
- the commercial lease arrangements and rent payable before the start of the Commercial Tenancy Relief Scheme (29 March 2020); and
- the specific amount of rent waived, the relief period and agreement between both parties after 29 March 2020.
Examples of evidence include an original and/or amended lease, correspondence with the tenant or the outcome of a mediation agreement.
Landlords may need to supply evidence which covers several months to demonstrate they have met the rent waiver requirements of this program.
Can I apply for a grant if I have provided a full rent deferral to my tenant?
No. Only rent waivers will be taken into account when calculating the grant amount from this Fund. Rent deferrals will not be included as they are to be repaid to the landlord in the future.
What if a rent reduction that has previously been negotiated is not sufficient to qualify for this fund?
If an agreement is already in place that extends beyond 21 August 2020 which does not provide a rent reduction that is sufficient to qualify for the fund, the agreement would need to be revised ensuring that it complies with the fund and this would need to be demonstrated in the application.
Landlords and tenants may consider accessing free mediation and dispute resolution support via the Victorian Small Business Commission to negotiate a fair outcome.
Can a landlord providing rent reductions to multiple CTRS-eligible tenancies apply for multiple grants?
Yes. If the landlord meets all the eligibility criteria for each tenancy, they may be entitled to more than one $3,000 grant. However, please note that an applicant can only apply once to the fund.
If an applicant has multiple eligible commercial properties, they must apply for all properties within a single application as long as their total taxable landholdings, excluding their principal place of residence, have a value of under $1 million.
For example, if a landlord has provided rent reductions to three separate tenancies that are eligible for rent relief under CTRS, and the landlord’s total taxable landholdings are under $1 million, they may apply for up to $3,000 for each tenancy but it must be in a single grant application.
Is the grant available to part-owners of properties with tenancies that are eligible for rent relief under CTRS?
Yes. A landlord who has a part interest in a property with a CTRS-eligible tenant who meets the eligibility criteria may apply for a grant proportionate to their interest in the property.
For example, a landlord with a 25 per cent share in a property who provides rent reduction to their tenant under CTRS requirements, may apply for up to $750 (25 per cent of $3,000). Similarly, the other owners may also individually apply if they meet the eligibility criteria for their portion.
In this instance, the value of the property will not impact each part owner’s eligibility for a grant, as long as their individual taxable landholdings are under $1 million according to the State Revenue Office site valuation.
My spouse and I are joint owners of a commercial property with a tenant who is eligible for rent relief under CTRS. Can we put in a joint application for that property?
No. Each joint owner who meets the eligibility criteria must submit a separate application for their part interest in a property. The awarded grant will be proportionate to each applicant’s interest in the property.
Can a landlord obtain more than one grant on a single CTRS-eligible tenancy?
No. Only one grant is available in relation to a landlord’s interest in any CTRS-eligible tenancy.
My tenant is not eligible for rent relief under CTRS, can I still apply for this grant?
No. To be eligible for a grant from this Fund, your tenant must be eligible for rent relief under CTRS requirements.
How do I know if my tenant is eligible for rent relief under CTRS?
A CTRS eligible tenant is one who:
- Has an annual turnover that does not exceed $50 million
- Has experienced a loss of turnover of 30 per cent or more, and
- Is a participant in the Commonwealth’s JobKeeper Payment scheme.
How do I prove that the rent reduction has caused me to experience hardship?
Each applicant will need to attest that, as a result of providing rent relief to eligible tenants, they are experiencing, or will experience, financial hardship through difficulty in paying outgoings or living expenses, or through servicing debt.
What steps can tenants and landlords 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.
What if tenants and landlords are unable to negotiate a rent reduction in accordance with the regulations?
Parties will continue to have access to the Victorian Small Business Commission’s (VSBC) free mediation and dispute resolution services.
You can apply for free mediation with the VSBC 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 (VCAT) for a resolution.
Can I have the application information translated?
Applications must be submitted in English. Translated materials to support applications will be available on shortly.
Examples of grant funding eligibility
Kate owns one property with a site value of less than $1 million and has a tenant, Angelo, who applied for rent relief under CTRS requirements.
Prior to or following the fund’s announcement, the Kate provided Angelo rent relief of $10,000 over three months of which at least $5,000 is in the form of a waiver.
- A maximum payment of $3,000 is payable to Kate, subject to her meeting all eligibility criteria.
- Kate cannot make further applications in relation to this tenancy.
Thao owns a property and the aggregate or total site value is less than $1 million. Thao’s property has two tenancies that meet the CTRS requirements.
Prior to or following the fund’s announcement, Thao provided both tenants rent relief of $10,000 each over three months of which at least $5,000 each is in the form of a waiver.
- Two maximum payments of $3,000 are payable (one for each tenancy) subject to meeting all eligibility criteria, totalling $6,000 in payment to Thao.
- Thao cannot make further applications in relation to either tenancy.
Nick owns two properties. Together, the properties have a site value of under $1 million but only one of Nick’s property has a tenancy that meets the CTRS requirements.
Prior to or following the fund’s announcement Nick provided this tenant rent relief of $10,000 over three months of which at least $5,000 is in the form of a waiver.
- A maximum payment of $3,000 is payable to Nick subject to meeting all eligibility criteria.
- Nick cannot make further applications in relation to this tenancy.
Two applicants have a 50 per cent interest in one property with a site value of less than $1 million. It has a tenancy that meets CTRS requirements.
Prior to or following the fund’s announcement, the applicants provided the tenant rent relief of $10,000 over three months of which at least $5,000 is in the form of a waiver. The applicants must submit individual applications to the fund.
- One $3,000 grant is payable and apportioned to the interests of each applicant, in this case $1,500 each, subject to meeting all eligibility criteria.
- Neither applicant can make further applications in relation to this tenancy.
Two applicants, Applicant A and Applicant B, have a 50 per cent interest each in one property. The property has a site value of less than $1 million and has a tenancy that meets CTRS requirements.
Prior to or following the Fund’s announcement, the applicants provided the tenant rent relief of $10,000 over three months of which at least $5,000 is in the form of a waiver.
Applicant A experiences hardship as a result of the rent reduction, however Applicant B does not.
- One grant is payable to Applicant A, subject to meeting all eligibility criteria. The amount is apportioned to Applicant A’s interests in the property, in this case $1,500.
- Applicant A cannot make another application in relation to this tenancy.
- Applicant B is not deemed eligible for a grant.