Struggling Victorian shop owners have warned about the potentially harsh impact of new leasing laws proposed by the Andrews government at a time when Melbourne retail properties are suffering from strict lockdowns.
Many shops are unable to open and even essential services are severely restricted to comply with tough social distancing rules, prompting warnings from property owners about the impact of the Victorian government’s leasing rules introduced this week.
The laws would allow landlords to pass on the cost of essential safety measures to tenants, make them provide tenants with three months notice about new leasing arrangements, and set up procedures for early rent reviews by specialist valuers.
But the property lobby group REIV had warned this would add unnecessary stress at a time when rents are falling and a separate moratorium on evictions is in place.
The group said pleas directly to premier Daniel Andrews, the treasurer and other ministers to pull the bill while the COVID-19 pandemic rages went unanswered.
It is arguing the significant impact of the COVID-19 pandemic that has ripped through the retail sector has altered the landscape since the “flawed” bill was first drafted and said there had been no “genuine” consultation with industry.
The REIV told Small Business Victoria that the legislation was fundamentally flawed. “With the onset of COVID-19 and the impact on the retail sector, a great deal of it will be unworkable and severely impact on retail,” the group said.
Since the pandemic struck it warned the process of accurately determining market rents was “almost impossible” and expressed concern that many retail tenants would request early rent reviews from specialised retail valuers.
They would have to try to determine market rentals while the crisis unfolds and very few new retail leases are settled and many retail tenants have negotiated temporary rent reductions.
The REIV is asking the Victorian government to delay the commencement of the new legislation until well into next year when the retail sector has recovered from the current crisis.
REIV chief executive Gil King said it appeared that the Andrews government “refuses to talk with industry under the cover of COVID-19″.
”A number of pleas for the Bill to be pulled from parliament were ignored and not even responded to,” he said.
King warned the changes would increase costs for retail tenants at this difficult time as the cost of maintenance of essential safety measures are passed onto them.
REIV president Leah Calnan said going ahead with the changes without even speaking with the industry was “typical of what we are experiencing from the Victorian government on many fronts during the rental moratorium”.
This article originally appeared on www.theaustralian.com.au/property.
