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Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:


CALL: (03) 8561 3318

We have previously discussed the leasing principles issued in the Federal Government’s Mandatory Code of Conduct for Commercial Tenancies (“Code”) in our article COVID-19 & Leasing – National Cabinet Mandatory Code of Conduct.

The Code recently came into effect in Victoria through the Commercial Tenancy Relief Scheme (“Scheme”). The Scheme is governed by the COVID-19 Omnibus (Emergency Measures) Act 2020 (“Act”) and the (Commercial Leases and Licences) Regulations 2020 (“Regulations”). The Regulations, among other things, establishes the process for tenants to obtain rent relief.

This article focuses on the rent relief process established by these Regulations.

Who is eligible?

A tenant that has an eligible lease is entitled to have rent relief for the period from 29 March 2020 until 29 September 2020 (“relevant period”). The lease is eligible, as defined under the Act if:

  • The retail lease, commercial lease or commercial licence was in operation as of 29 March 2020;
  • The tenant  is a SME entity (“SME”)  with an annual turnover of less than $50 million; and
  • The tenant is participating in the JobKeeper Scheme.

What is the process?

Landlords and Tenants are obliged to act reasonably and in good faith when discussing and negotiating rent relief, with the aim of reaching an agreement for the relevant period.

Pursuant to the Regulations, the tenant must first make a written request to the landlord for rent relief. Their request must be accompanied by:

  • a statement that the lease is an eligible lease; and
  • information and evidence that they are an SME and a participant in the JobKeeper scheme.

Both the Victorian Small Business Commissioner (“VSBC”) and the Victorian State Government (“VSG”) have issued guidance about the information tenants are expected to provide. A tenant should provide further information if they believe it will assist their request for rent relief.

After the landlord receives the request for rent relief, they must offer rent relief to the tenant within 14 days, or longer by agreement. A rent relief offer must take into account all the circumstances including:

  • the decline in the tenant’s turnover associated with the leased premises during the relevant period; and
  • the landlord’s financial ability to offer rent relief.

For example, the landlord receiving loan repayment relief is relevant.
The landlord’s offer must:

  • relate up to 100% of the rent payable under the lease (noting the VSG policy guidance states that the relief should be in proportion to tenant’s decline in turnover).
  • have at least 50% of the rent relief offered in the form of a rent waiver. For example, an offer of 50% rent relief could have a 25% rent waiver and 25% rent deferral; and
  • be during the relevant period.

Where the relief offer includes rent deferral, a landlord must offer to extend the lease term equivalent to the period the rent is deferred. For example, if rent is deferred for 6 months, the lease term would be extended by 6 months. The deferred rent would be repaid over the remaining lease term (including any extension) or 24 months, whichever is greater. The parties can agree on how deferred rent is to be repaid.

The landlord must also genuinely consider waiving recovery of outgoings or other expenses payable by the tenant for any part of the relevant period that a tenant is not able to operate their business at the leased premises.

Any reduction of outgoings received by the landlord must be passed on proportionally to the tenant if they are payable under the lease. It is important to note that the State Revenue Office has recently introduced land tax relief which is available to eligible landlords.

What happens if the parties reach an agreement?

Whilst not a requirement in the Regulations, any rent relief agreement should be documented in a deed of variation of lease, to clearly set out the agreed terms and prevent future disputes. If the lease includes Guarantor(s), they should also be a party to the variation of lease.

Can tenants get any further rent relief?

A tenant may make a further request for additional rent relief under the Regulations if their financial circumstances deteriorate. The landlord must follow the same process as outlined above for offering initial rent relief however they need not offer another 50% rent relief waiver with respect to any further rent relief offer.

What if the parties cannot reach agreement?

The Regulations allow for the eligible lease dispute to be referred by either party to the VSBC for a mediation. If the dispute cannot be resolved at mediation, either party can apply to the Victorian Civil Administrative Tribunal or the Supreme Court of Victoria to determine the dispute.

Where can I find further details?

The Full Regulations can be found here.

As Accredited Property Law Specialists, we are well equipped to advise you of your rights and obligations. Should you have any questions on how the Regulations may impact you, or if you need assistance in negotiating your position in a lease, please contact us on 1300 205 506.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by one of our lawyers

,

.

Amy Landberg

For further information contact

Amy Landberg

Amy is a Legal Practitioner at Sharrock Pitman Legal.

She deals with Property Law. For further information, contact Amy Landberg on her direct line (03) 8561 3327.

More on

Property Law

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be placed on the Supreme Court website for at least 14 days prior to any application.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself does not take long to process the application (maybe another 1 to 2 weeks) and this is done 'on the papers'. This means you do not have to go to a court hearing. There is also a general discretion for the Court to issue a 'Requisition' asking that you provide more information before they process the application and this can delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

  • Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
  • There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
  • There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.
  • You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
  • It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE: 
(03) 8561 3318

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About Sharrock Pitman Legal

For fifty years Sharrock Pitman Legal has made a significant and long term contribution to meeting the legal needs of business owners and residents in the City of Monash and greater Melbourne area.