Connect with Us

Empowering You. Creating Choices. Successful Outcomes.

Insights

COVID-19 Commercial Leasing Brief Case Updates

1. Rent relief request during initial “relevant period” valid to the extensions

R & D Health Clubs Pty Ltd v Lin Wang Pty Ltd (19 April 2021) (2021) ACML 85-493; [2021] VCAT 349

  • This case involved an assessment of rent relief under the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020(the Regulations).
  • The key question was whether the request for rent relief that was made under reg 10(2) of the Regulations as they existed prior to 29 September 2020 entitled the tenant to claim rent relief after 29 September 2020 or, whether a fresh request for rent relief was required.
  • Held that the tenant was not required to make a fresh request for rent relief after the expiration of the initial relevant period; the initial request for rent relief was validly made under the Regulations during the initial “relevant period” and was also valid for the extensions to the relevant periods.

Yarraville Business Pty Ltd v Persico (12 March 2021) (2021) ACML 85-488; [2021] VCAT 213

  • In this case, a rent relief request was held to protect a tenant from eviction for both the initial and extended “relevant period” and a new rent relief request was not required after the expiration of the initial relevant period.

2. Rent relief request not valid

Zeini v Inner Metropolis Holdings Pty Ltd (19 March 2021) (2021) ACML 85-489; [2021] VCAT 243

  • This case involved the tenant applying for injunctive relief to restrain the landlord from re-entering the premises on grounds that rent and outgoings had not been fully paid.
  • The tenants contended that pursuant to reg 9 of the Regulations, the landlord was not able to re-enter the premises. That regulation states that a landlord is not entitled to evict or attempt to evict a tenant under [an] eligible lease because of non-payment of rent or outgoings.
  • One of the key questions was whether the tenant had complied with reg 10(2) in making a request for rent relief as re 9 relied on this.
  • Held that the rent relief request was not valid as the decline in turnover evidence accompanying the reg 10(2) request failed to disclose income the tenant’s received from sub-letting the premises.

3. No protection from eviction for non-rental breaches

Karting Madness Pty Ltd v Daniel Terrence Pty Ltd (26 February 2021) (2021) ACML 85-487; [2021] VCAT 159

  • VCAT held in this case that the rights afforded to a tenant under the reg 9 to the Regulations to prohibit the landlord from evicting the tenant for non payment of rent or outgoings where rent relief request made in accordance with reg 10(2), did not afford the tenant protection from eviction for other breaches of the lease.

4. Tenant barred from COVID-19 rent relief for failure to provide required information

Filomeno Nominees Pty Ltd v Crown Group Pty Ltd (5 February 2021) (2021) ACML 85-486; [2021] VCAT 81

  • In this case a request for rent relief by the tenant did not comply with reg 10(2) of the Regulations and the tenant was barred from rent relief and the landlord entitled to re-take possession as the tenant was not protected by reg 9.

The key takeaways from the above cases are:

  • The Regulations must be strictly followed.
  • Where tenants have failed to comply with reg 10(2) in making a request for rent relief, they will not be given the protection afforded under reg 9.
  • Tenants are at risk that Landlords may re-enter premises for breaches of the lease not relating to non-payment of rent or outgoings even when there is an eligible lease under the Regulations.
  • Tenants are at risk that Landlords may re-enter premises if they have not strictly complied with the Regulations in their request for rent relief and where they are in breach of the lease for non-payment of rent or outgoings.

Note, the Victorian COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020  expired on 28 March 2021.

Whether landlord or tenant, if you require advice in relation to your commercial lease, please contact our Real Estate Lawyers at Burke & Associates Lawyers.

Insight written by Kristy Muhlhan

Contacts

Kristy Muhlhan

Principal

Kristy Muhlhan

Principal
LL.B (Hons) GRAD DIP. L.P., GAICD.
Since 2014, she has been an owner and Principal of the firm and has mastered a broad range of essential commercial and business skills which go hand in hand with the work she does for...

Stewart Davis

Associate

Stewart Davis

Associate
LL.B (Hons) B.Com
As well as property law, Stewart has had exposure to VCAT administration matters and commercial law, particularly servicing developer clients.

George Hanger

Associate

George Hanger

Associate
LL.B BA
George was admitted to legal practice in May 2015 after completing a Bachelor of Arts at the University of Melbourne and a Bachelor of Laws at Monash University.

Emma Dickens

Paralegal

Emma Dickens

Paralegal
Emma previously completed a Bachelor of Legal and Dispute studies at RMIT University in 2015.

Request Burke & Associates Lawyers' News