Melbourne restaurants and cafés hit with rental default notices

Stage 4 restrictions continue throughout Victoria, forcing more eateries to shut down. 

However, salt is now being rubbed into the wounds of  restaurant and café owners in Melbourne’s inner suburb of Richmond who are struggling, but managing, to stay open as they are issued with default notices for failure to pay their rent in full.

Many of these restaurateurs fear they will lose access to their premises come September.

Salona restaurants owner, Stavros Konis, is angry at the prospect that his restaurant may have to close down permanently. The Swan Street restaurant was founded by Konis’ grandfather in Richmond in 1979. The restaurant has been in the family for three generations in which time they have never missed a rental payment.

Mr Konis says his landlord's tactics during Melbourne’s second lockdown is making it difficult for his business to survive the latest restrictions.

"It's very frustrating for me, because I know I can survive this," Mr Konis said.

"I've been in business for a very long time. I've got a very successful business. It'd be a shame for me to close this one and relocate somewhere else.”

Mr Konis said when the second lockdown started, his property manager, Steve Pantelios of Steveway Real Estate, did offer to reduce the rent by 50 per cent on behalf of the owner but with a 90 per cent reduction in revenue, Mr Konis was unable able to even pay that. 

This dire circumstance has led to a default notice sent by the agency along with a $385 administration fee.

"It was a slap in the face," Konis said. 

"It would make sense if there was another 10 of me willing to jump into my shoes and open a small business here. But unfortunately, that's not going to happen," he said. 

Salonas is one of many restaurants to receive a default notice and eviction threats through Steveway.

The president of the Victoria Street Traders Association, Ha Nguyen, who owns a cooking school, lodged a dispute with The Victorian Small Business Commission, that has seen its requests for mediation double since the pandemic started in March. 

"It's very scary because you are already down at the bottom. You can't do anything, and someone is bombarding you with phone calls and emails," Mr Nguyen said.

Nguyen said his rent was reduced but then increased again without taking into consideration the lack of revenue coming in since July.

Mr Pantelios told the ABC his real estate agency Steveway had "at all times … acted in good faith" and  said his agency had offered concessions to tenants in many cases.

"In dealing with tenants during the crisis, we have, at a minimum, always complied with the guidelines set out in the regulations," he said.

"A number of tenants have seen the COVID-19 crisis as an opportunity to totally avoid their obligations to deal fairly," he said. 

"In these instances, we must be mindful of the landlord's interests. We need to explain the situation to our landlords, many of whom, for example, are self-funded retirees who are relying on the rental income to live."