[co-author: Pardeep Brar - Articling Student]
This blog was updated on April 20, 2020.
Below is a quick reference guide of real estate emergency pandemic measures applicable to lenders/borrowers and to landlords/tenants in Ontario, Alberta and British Columbia.
Ontario
1. Mandatory Closures:
Does emergency/pandemic response legislation require commercial landlords or commercial tenants to close their buildings and/or prohibit entry as a result of COVID-19?
Effective March 24, 2020, the Government of Ontario ordered the closure of all non-essential businesses.
On April 3, 2020, the Government of Ontario updated the list of essential business that can remain open.
2. Restrictions on Lender Enforcement:
Does emergency/pandemic response legislation restrict lenders from exercising enforcement remedies under their mortgage/financing/debt agreements?
Emergency/pandemic response legislation does not restrict lenders from exercising enforcement remedies under their mortgage/financing/debt agreements. However, lenders may experience difficulties obtaining a court order as the Ontario Superior Court has issued a notice that only a select list of matters will be heard by the court. Unless the proceedings meet the court's requirements, the enforcement proceedings will likely be adjourned.
3. Restrictions on Landlord Enforcement:
Does emergency/pandemic response legislation restrict landlords from exercising remedies under leases?
Emergency/pandemic response legislation does not restrict commercial landlords from exercising remedies under commercial leases. However, commercial landlords may experience difficulty obtaining a court order for possession. The Ontario Superior Court has issued a notice that only a select list of matters will be heard by the court. Unless the proceedings meet the court's requirements, the landlord enforcement proceedings will likely be adjourned. In addition, the sheriff's department has been instructed not to carry out writs of possession until further notice.
Restrictions have been placed on the enforcement of residential tenancies. The Ministry of the Attorney General of Ontario announced that the Landlord and Tenant Board would not issue eviction orders for residential tenancies and that the sheriff's department would postpone all evictions.
4. Mortgage/Financing Relief:
Does emergency/pandemic response legislation require that commercial landlords or commercial tenants be granted relief from payment obligations or other covenants under their mortgage/financing/debt obligations?
Emergency/pandemic response legislation does not require that commercial landlords or commercial tenants be granted relief from payment obligations or other covenants under their mortgage/financing/debt obligations.
The Government of Canada has indicated that Canadian banks are working with borrowers. Banks are providing mortgage payment deferrals to landlords on a case-by-case basis. Interest will continue to accrue during the deferral period. Landlords must contact their lender to determine their eligibility and the specific terms relating to the deferral.
Canada Mortgage and Housing Corporation also allows lenders to offer deferred payments for insured mortgages to landlords. Interest will continue to accrue during the deferral period. CMHC expects that all landlords will pass their savings on to tenants and refrain from evictions during the pandemic. Borrowers should contact their lender to determine their eligibility and terms. Borrowers with mortgages that are not CMHC-insured are advised to consult their lender.
Additional financial relief measures include a five-month interest free period for businesses to make payments for most provincially administered taxes, deferring for 90 days the payment of property taxes in parts of Northern Ontario located outside of municipal boundaries and deferring for 90 days the remittance of education property tax by municipalities. Municipal financial relief is also available. Effective March 16, 2020, the City of Toronto has instituted a 60-day grace period for property tax and utility bill payments for all residents and businesses.
5. Lease Relief:
Does emergency/pandemic response legislation require that tenants be granted relief from rent payments or other covenants under their leases?
Emergency/pandemic response legislation does not require that tenants be granted relief from rent payments or other covenants under their leases.
On April 16, 2020, the Government of Canada announced that it intends to introduce the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses. CECRA will provide loans, including forgivable loans, to commercial property owners who will then reduce/forego the rent of small businesses for the months of April (retroactive), May and June. The federal government will need to work with provincial governments to implement this program. Further details on the program are not yet available.
Government and industry leaders are asking landlords and tenants to work together to find practical solutions. For instance, some landlords are offering Rent Deferment Agreements to tenants. Under such arrangements, the rent is not forgiven, but instead payment is deferred to a later date.
Alberta
1. Mandatory Closures:
Does emergency/pandemic response legislation require commercial landlords or commercial tenants to close their buildings and/or prohibit entry as a result of COVID-19?
On March 27, 2020, the Government of Alberta ordered the closure of non-essential businesses (See the list of essential services).
Other businesses that are not identified as an essential service can still continue to operate if: (a) it is not specifically prohibited from offering services in a location accessible to the public; and (b) the business does not fall under specified business, workplace and facility closures (See the list of non-essential businesses).
2. Restrictions on Lender Enforcement:
Does emergency/pandemic response legislation restrict lenders from exercising enforcement remedies under their mortgage/financing/debt agreements?
Emergency/pandemic response legislation does not restrict lenders from exercising enforcement remedies under their mortgage/financing/debt agreements. However, lenders may experience difficulties obtaining a court order as the Provincial Court of Alberta and the Alberta Court of Queen's Bench will only hear urgent matters. Unless the proceedings meet the court's urgency requirements, the enforcement proceedings will likely be adjourned.
3. Restrictions on Landlord Enforcement:
Does emergency/pandemic response legislation restrict landlords from exercising remedies under leases?
Emergency/pandemic response legislation does not restrict commercial landlords from exercising remedies under commercial leases. However, commercial landlords may experience difficulty obtaining a court order for possession as the Provincial Court of Alberta and the Alberta Court of Queen's Bench will only hear urgent matters. Unless the proceedings meet the court's urgency requirements, the landlord enforcement proceedings will likely be adjourned.
Restrictions have been placed on the enforcement of residential tenancies. The Government of Alberta announced that tenants cannot be evicted for non-payment of rent before May 1st. Landlords and tenants are asked to work together to develop a payment plan while the public health state of emergency is in effect. Evictions are still permissible if the eviction is for a reason other than for non-payment. Late fees cannot be applied to rent payments until June 30 and cannot be collected retroactively for this period.
4. Mortgage/Financing Relief:
Does emergency/pandemic response legislation require that commercial landlords or commercial tenants be granted relief from payment obligations or other covenants under their mortgage/financing/debt obligations?
Emergency/pandemic response legislation does not require that commercial landlords or commercial tenants be granted relief from payment obligations or other covenants under their mortgage/financing/debt obligations.
The Government of Canada has indicated that Canadian banks are working with borrowers. Banks are providing mortgage payment deferrals to landlords on a case-by-case basis. Interest will continue to accrue during the deferral period. Landlords must contact their lender to determine their eligibility and the specific terms relating to the deferral.
Canada Mortgage and Housing Corporation also allows lenders to offer deferred payments for insured mortgages to landlords. Interest will continue to accrue during the deferral period. CMHC expects that all landlords will pass their savings on to tenants and refrain from evictions during the pandemic. Borrowers should contact their lender to determine their eligibility and terms. Borrowers with mortgages that are not CMHC-insured are advised to consult their lender.
Additional financial relief measures include a six month province-wide deferral of education property taxes for businesses, and a utility payment deferral for residential, farm and small commercial customers until June 19, 2020. Municipal relief is also available. For instance, the City of Calgary allows the deferral of utility bills for April to June and the tax payment deadline for the 2020 property tax has been extended from June 30 to September 30, 2020.
5. Lease Relief:
Does emergency/pandemic response legislation require that tenants be granted relief from rent payments or other covenants under their leases?
Emergency/pandemic response legislation does not require that commercial tenants be granted relief from rent payments or other covenants under their commercial leases.
On April 16, 2020, the Government of Canada announced that it intends to introduce the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses. CECRA will provide loans, including forgivable loans, to commercial property owners who will then reduce/forego the rent of small businesses for the months of April (retroactive), May and June. The federal government will need to work with provincial governments to implement this program. Further details on the program are not yet available.
Government and industry leaders are asking landlords and tenants to work together to find practical solutions. For instance, some landlords are offering Rent Deferment Agreements to tenants. Under such arrangements, the rent is not forgiven, but instead payment is deferred to a later date.
British Columbia
1. Mandatory Closures:
Does emergency/pandemic response legislation require commercial landlords or commercial tenants to close their buildings and/or prohibit entry as a result of COVID-19?
On March 26, 2020, the Government of British Columbia ordered certain businesses to close and identified a list of essential businesses.
Non-essential businesses, other than those businesses specifically ordered to close, can stay open as long as they adapt their workplaces to the orders and recommendations of the provincial health officer (See the list of essential services).
2. Restrictions on Lender Enforcement:
Does emergency/pandemic response legislation restrict lenders from exercising enforcement remedies under their mortgage/financing/debt agreements?
Emergency/pandemic response legislation does not restrict lenders from exercising enforcement remedies under their mortgage/financing/debt agreements. However, lenders may experience difficulties obtaining a court order as the British Columbia Supreme Court has suspended all regular court operations and will only hear essential and urgent matters.
3. Restrictions on Landlord Enforcement:
Does emergency/pandemic response legislation restrict commercial landlords from exercising remedies under commercial leases?
Emergency/pandemic response legislation does not restrict commercial landlords from exercising remedies under commercial leases. However, commercial landlords may experience difficulty obtaining a court order for possession. Effective March 19, 2020, the British Columbia Supreme Court suspended all regular court operations and will only hear essential and urgent matters.
Restrictions have been placed on the enforcement of residential tenancies. A landlord may not issue a new notice to end a tenancy and any existing eviction orders are halted. Evictions may still be permitted in certain cases, such as where there are health and safety concerns, or if the eviction is needed to prevent undue damage to the property. In these situations, landlords may apply to the Residential Tenancy Branch.
4. Mortgage/Financing Relief:
Does emergency/pandemic response legislation require that commercial landlords or commercial tenants be granted relief from payment obligations or other covenants under their mortgage/financing/debt obligations?
Emergency/pandemic response legislation does not require that commercial landlords or commercial tenants be granted relief from payment obligations or other covenants under their mortgage/financing/debt obligations.
The Government of Canada has indicated that Canadian banks are working with borrowers. Banks are providing mortgage payment deferrals to landlords on a case-by-case basis. Interest will continue to accrue during the deferral period. Landlords must contact their lender to determine their eligibility and the specific terms relating to the deferral.
Canada Mortgage and Housing Corporation also allows lenders to offer deferred payments for insured mortgages to landlords. Interest will continue to accrue during the deferral period. CMHC expects that all landlords will pass their savings on to tenants and refrain from evictions during the pandemic. Borrowers should contact their lender to determine their eligibility and terms. Borrowers with mortgages that are not CMHC-insured are advised to consult their lender.
Additional financial relief measures include steps by BC Hydro to defer bill payments and the implementation of a 1 percent reduction in rates for all customers. The Government of British Columbia has also reduced the school property tax rate for commercial properties to achieve an average 25 percent reduction in the total property tax bills for most businesses, many provincial tax-filing deadlines are deferred to September 30, 2020, and the date that late payment penalties apply for commercial properties in classes 4, 5, 6, 7 and 8 have been postponed to October 1, 2020. Municipal financial relief is also available. For instance, the City of Vancouver is considering extending the due date of property taxes from July 3 to September 2, 2020.
5. Lease Relief:
Does emergency/pandemic response legislation require that tenants be granted relief from rent payments or other covenants under their leases?
Emergency/pandemic response legislation does not require that commercial tenants be granted relief from rent payments or other covenants under their commercial leases.
On April 16, 2020, the Government of Canada announced that it intends to introduce the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses. CECRA will provide loans, including forgivable loans, to commercial property owners who will then reduce/forego the rent of small businesses for the months of April (retroactive), May and June. The federal government will need to work with provincial governments to implement this program. Further details on the program are not yet available.
Government and industry leaders are asking landlords and tenants to work together to find practical solutions. For instance, some landlords are offering Rent Deferment Agreements to tenants. Under such arrangements, the rent is not forgiven, but instead payment is deferred to a later date.
