New legislation providing rent relief to Victorian hotels has been welcomed by the Accommodation Association.

Commercial tenants and landlords in Victoria have been guaranteed with government rental support to help businesses through the state’s sixth lockdown which began last night, following new legislation passed yesterday.

The Accommodation Association has welcomed the move, saying the measures will provide some hope amid “flatlining consumer confidence”. The association has called on other states and territories around Australia to follow suit with similar legislation or procedures in the event of current or future lockdowns.

Under the new Commercial Tenancy Relief Scheme (CTRS), businesses that have experienced a loss in turnover of 30% or more during the pandemic are guaranteed to receive rent reductions, with separate support to be provided to landlords through up to 25% land tax relief and other measures. Special arrangements will be put in place for businesses which were not operating in 2019.

The legislation secures proportional reduced rent for tenants based on lost turnover.

The legislation mandates for proportional rent reductions in line with a tenant’s loss in revenue by comparing a business’ total turnover for the final quarter of the 2020/21 financial year with the corresponding period in the 2018/19 FY. Once a reduced rent is agreed, this amount then takes effect for the period from 28 July 2021 until 15 January 2022.

Accommodation Association CEO, Dean Long, expressed his sincere gratitude to Victorian Minister for Small Business, Jaala Pulford, for recognising the need to support businesses hanging on by a thread.

“Right now I know there are hotels and staff in Melbourne reliant on international and corporate travel out of Sydney that are effectively operating blindfolded, with no clear pathway forward,” Long said.

“That’s why it’s critical the CTRS runs into 2022, as it recognises the need to support businesses impacted by lockdowns into next year. Snap lockdowns do not include a snap recovery, it takes month for hotels to rebuild.”

Accommodation Association CEO, Dean Long

Parties are encouraged to enter negotiations, with the Victorian Small Business Commission available for mediation if necessary.

Minister Pulford said the legislation should provide some peace of mind for small businesses struggling to pay the rent.

“Tenants and landlords have already been working together really well and we’d encourage them to continue to do so to achieve fair outcomes,” she said.

The new legislation takes into consideration the absence of JobKeeper, which the Federal Government has consistently resisted calls to reintroduce in its previous form.