Finance Small Business Melbourne business owners fear eviction as they struggle to make rent
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Melbourne business owners fear eviction as they struggle to make rent

Restaurant owner Stavros Konis says profits are so low he is struggling to pay rent and might have to close. Photo: ABC News:/Peter Healy
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Stavros Konis is frustrated and angry.

He does not want to see the restaurant his grandfather bought in 1979 close down on his watch.

But he says his landlord’s tactics during Melbourne’s second lockdown are making it impossible for his business to survive Stage 4 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.

“But I’ll have to if I’m going to survive. I’ll relocate to another place where there’s a different landlord with a smarter approach.”

Salona is a restaurant on Swan Street in Richmond, a once poor, working-class suburb in the shadow of the MCG that has evolved into a thriving inner-city icon of Melbourne life.

Stavros Konis and his grandfather Tony Atherinos at Salona, which has been in the family for generations. Photo: Stavros Konis

As Melbourne’s second wave began to bite, Mr Konis said the property manager, Steve Pantelios of Steveway Real Estate, offered him a 50 per cent reduction on the rent from the landlord.

But, he said, with revenue down by 90 per cent there was no way he could pay it.

“You’re trying to drive the business, and rejig from an a la carte restaurant to takeaway, and then you’re getting the wind sucked out of your sails,” Mr Konis said.

Shortly afterwards, Mr Konis said the agency sent him a default notice, along with a $385 administration fee.

“It was a slap in the face,” he said.

“We’ve been here for three generations. My grandfather had this business. My father had the business. We’ve never missed a rent payment.

“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.

Vegan Shack and cooking school also fear eviction

Next door to Salona, the Vegan Shack Cafe also received a default notice from Steveway, which acts on behalf of several local landlords.

Co-owners Deborah Adams and her son Jansen Andre said their landlord offered to cut their rent by a third, and defer another third – but it was still far more than they could afford.

“I’ve been trying to get a loan, but that default notice means no one will touch us,” Ms Adams said.

“We need that money to pay rent, and to survive at home.”

Businesses in Richmond are struggling to survive amid coronavirus restrictions. Photo: ABC News: Peter Healy

She said the default notice was rescinded after she spent $700 getting legal help.

But this week, she received an invoice asking for the full rent.

Ms Adams says she cannot understand the strategy and is worried she will be kicked out when the moratorium on evictions expires in September.

“I’m a landlord myself. And I’ve had to be lenient and given my tenant a couple of months rent-free,” Ms Adams said.

“Because I know that if they leave, there won’t be another one.”

Deborah Adams and her son Jansen Andre own the Vegan Shack Cafe in Richmond. Photo: ABC News: Patrick Stone

The Victorian Small Business Commission has been dealing with more than double its usual number of inquiries and requests for mediation since March.

The president of the Victoria Street Traders Association, Ha Nguyen, is one of them. He owns a cooking school on Victoria Street.

He lodged a dispute at the commission after he also received a default notice through Steveway, as well as a threat of eviction.

Mr Nguyen says he fears eviction when the moratorium on evictions ends next month. Photo: ABC News: Peter Healy

“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.

He said his rent was lowered but then raised again, and has not been adjusted to reflect his lack of income from the business since July.

Mr Nguyen also fears eviction when the moratorium ends.

Agency says it’s ‘mindful of the landlord’s interests’

Real estate agent Steve Pantelios from Steveway Real Estate said many landlords relied on rent as their income.

Mr Konis said landlords and agents had not adjusted to the new reality.

“A lot of the properties in this area were bought back in the day, probably in pounds, before the Australian dollar was brought in. They’re not used to being strategic, and working with clients,” he said.

But Mr Pantelios told the ABC his real estate agency Steveway had “at all times … acted in good faith”.

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

Mr Pantelios said his agency had “in many instances” offered concessions to tenants that exceed the regulations.

“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.”

Herschel Landes, the former president of the Bridge Road Traders Association, said Richmond’s once-vibrant shopping strips faced dereliction.

“I’m surprised that landlords are taking a tough approach. There’s been some examples of generous landlords and you’ve seen that the businesses have actually bloomed when the landlord gives them a bit of generosity,” Mr Landes said.

Herschel Landes said the approach from landlords when it came to rent reductions had been a mixed bag. Photo: ABC News: Ben Knight

‘Not about us versus them’

Jane Gilliam of Hampstead Flowers on Bridge Road said the attitude of her landlord had helped her navigate through the crisis.

“He’s been in retail himself, so he understands,” she said.

“He’s communicated really well, we’ve negotiated. We’ve talked about it.

“He doesn’t want to lose a good tenant and we both benefit.”

Mr Konis said the alternative was a “catastrophe” for both landlords and tenants.

“The way they’re going, I don’t think that there’ll be too many businesses that will survive this unless they’re lucky enough to have smart landlords that have a long-term vision and they can navigate through this,” he said.

“It’s not about us versus them. We’ve got to start working together.”

ABC