Small-business rental disputes at a record high

shareholder dispute, disputes, dispute resolution
Mediator trying to resolve businessmen deadlocked in acrimonious debate. Vector illustration on business mediator or dispute resolution concept isolated on plain background.

The Victorian Small Business Commission (VSBC) reported that in 2020–21, it received over 19,000 enquiries, the vast majority of which were from either small-business tenants or their landlords seeking help to resolve rental disputes. The Commission recorded an 85 per rise in request for help with disputes on the previous year 12-month period.

Most of the enquiries were to resolve rent relief disputes under the Victorian Government’s Commercial Tenancy Relief Scheme. On the landlords’ side, most complaints were that their tenant stopped had stopped paying paying rent, on on the tenants’ side that their landlord had refused to enter negotiations over reducing their rent while their revenue was heavily compromised.

Other disputes included retail leasing disagreements about which party – tenant or landlord – should pay for outgoings or repairs and maintenance. Help was also sought in resolving general small-business disputes including situations where supplier invoices were left unpaid or goods and services were not provided.

The Commission reported that more than a third of all matters were resolved early on, often by phone. Where this wasn’t possible, the VSBC moved the matter on to mediation, where an impartial mediator guided parties in resolving their dispute.

All mediation costs were waived when it came to rent relief disputes – including where the tenant wasn’t eligible for the Commercial Tenancy Relief Scheme. Commissioner Lynda McAlary-Smith said the VSBC significantly ramped up efforts to address the needs of small businesses in response to exceptionally stressful circumstances.

“There has never been a greater need for small business people to understand their rights and obligations and to know how to get support if they need it – be it guidance on rent relief in their language or help in looking after their mental wellbeing,” McAlary-Smith said.

In order to mitigate these difficult circumstances, the VSBC put in a place a number of initiatives:

  • sharing frequent, plain-English guidance on rent relief via workshops, webinars and on their website
  • promoting translated information on how to ask for rent relief to culturally diverse business and community leaders
  • encouraging small-business owners who were feeling stressed or anxious to access free mental health and financial counselling.