When the first round of lockdowns kicked off in March, the federal government announced a six-month eviction moratorium for businesses, meaning that landlords were required to negotiate a workable solution with tenants.
For many salons, the move has been life-saving. In fact, the Shopping Centre Council of Australia (SCCA) announced this week that its rental assistance efforts have amounted to $1.6 billion nation-wide.
But the measures were only ever to be temporary, and as the end of the moratorium looms, many salon owners are panicked over what the end of September will bring. Particularly worried are Victorian salon owners, who are still in lockdown.
Victoria’s small business commissioner Judy O’Connell, who’s office is responsible for mediating disputes between landlords and businesses under the code, says the commercial tenancy code has been effective for SMEs, with more than 7,500 inquiries about the code to date.
“A lot of it is about how they go about rent relief, so we’ve done a fair bit of work to make sure it’s as easy as possible to negotiate,” says Ms O’Connell.
More than 1,400 applications for mediation have been lodged under the code, 524 of which have been finalised to date with a 90% success rate.
Interestingly, 43% of mediation applications have actually come from landlords, frustrated with tenants that haven’t paid their rent over the pandemic. “When they come to us the tenant is in a dire situation emotionally and financially, quite often they’re relieved to speak to us because they’ve exhausted negotiations with their landlords — communication started to break down,” Ms O’Connell says.
The Victorian Small Business Commissioner has been inundated with cases, finalising about 100 disputes each week, a 200% increase on what the office was previously dealing with.
It takes on average between five and six weeks to finalise a case though, underscoring the onus on businesses needing to gather and present evidence about their turnover declines while also trying to run their businesses through the pandemic.
“We’re trying to make it the minimal amount of evidence,” Ms O’Connell says. “A BAS statement or an extract from their accounting software … we don’t want them having to provide three-years worth of profit and loss statements or balance sheets.”
The real saviour, though, will be an extension of the code. Australian Retailers Association (ARA) chief executive Paul Zahra is pressing the case for extension with the Morrison government, saying there’s no question additional concessions need to be granted.
“The pandemic is far from over, and retailers will continue to struggle with its impacts,” Mr Zahra said.
“We believe that rent relief schemes should be extended by six months in its current form, in accordance with the extension of other support measures.”
While Melbourne’s lockdown is slated to end before the code expires, there will only be a few weeks for businesses to get themselves back in shape to pay September and October rents.
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