Governments continue to announce changes and new assistance programs in relation to the COVID-19 pandemic. Below is a round-up of how this has impacted residential and commercial rents and evictions in Alberta.
Changes in Residential Evictions During COVID-19
Due to the COVID-19 pandemic, the Alberta government recently announced the following protections for residential and mobile homes site tenants facing financial hardship due to COVID-19:
- Tenants cannot be evicted for non-payment of rent and/or utilities before May 1, 2020.
- Rents on residential properties or mobile home sites will not increase while Alberta’s State of Public Health Emergency remains in effect.
- Late fees cannot be applied to late rent payments until June 30 and cannot be collected retroactively for this time.
- Landlords and tenants must work together to develop payment plans while COVID-19 is being managed.
- Landlords can still file applications and receive orders for possession if the reason for the eviction is unrelated to rent and/or utility payments, or if a tenant refused to negotiate or comply with a payment plan. For instance, the Alberta government has stated that any renter willfully damaging property or breaking the law will not be protected.
- Additionally, the government has suspended civil enforcements of evictions for non-payment of residential rent until April 30, 2020. Landlords who already have an order for possession of the premises from either the court or the Residential Tenancy Dispute Resolution Service cannot have a civil enforcement agency remove the tenant from the premises until after April 30.
The Alberta government has not issued any moratorium on evictions for commercial leases.
Therefore, a commercial landlord’s right of repossession continues to be regulated by common law principles or the provisions of the lease itself and must proceed through the courts.
However, as we have previously noted, both the Provincial Court of Alberta and the Alberta Court of Queen’s Bench have restricted court operations to urgent matters, which include, among others:
- Orders relating to the pandemic, including quarantine orders;
- Injunctions, where there is prima facie urgency, including refusal of treatment/end of life matters;
- Civil Restraining Orders;
- Preservation Orders;
- Urgent Orders in the nature of habeas corpus, certiorari, mandamus and prohibition; and
- Emergency Adult Guardianship and Trusteeship Orders, where there is a risk of harm to an individual or their property.
As a result, unless the eviction falls under one of the above categories, it is unlikely that a landlord will be able to evict a commercial tenant until further notice.
The Canada Emergency Commercial Rent Assistance
This week, Prime Minister Justin Trudeau announced the Canada Emergency Commercial Rent Assistance (“CECRA”) for small businesses, which will offer forgivable loans to eligible commercial property owners so that they can reduce the rent owed by their commercial tenants by at least 75% for the months of April, May and June, 2020.
To qualify for CECRA for small businesses, the property owner mustown property that generates rental revenue from commercial real property located in Canada and the commercial real property must be occupied by an impacted small business tenant. An impacted small business tenant is a business, including a non-profit and charitable organization who:
- Pays no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement),
- Generates no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level), and
- Has temporarily ceased operations (i.e. generating no revenues), or has experienced at least a 70% decline in pre-COVID-19 revenues.
Additionally, the property owner must have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants (though an alternative mechanism will soon be announced for those without a mortgage), and the owner must enter into a rent reduction agreement for the period of April, May, and June 2020 that will reduce impacted small business tenant’s rent by at least 75%. Finally, the rent reduction agreement with impacted tenants must include a moratorium on eviction for the period of April, May and June 2020 and the owner must have declared rental income on its tax return (personal or corporate) for tax years 2018 and/or 2019.
The deadline to apply for CECRA is August 31, 2020.
DBH Law recognizes that there continues to be a growing concern in Alberta and abroad about the spread of COVID-19. We have implemented several measures to reduce the risk and impact to our employees, clients and the community at large.
Please be aware that we are prepared to initiate business continuity protocol for remote work and communications. It is our priority to ensure business continuity for our clients while ensuring the safety of our people. We recognize that the outbreak of COVID-19 is an unprecedented situation globally and we wish to assure you DBH Law is equipped and prepared to maintain and continue business services to our clients during this pandemic.
Entering in to a commercial lease represents a huge financial commitment and comes with significant legal risk. Because of this, it is critical for both landlords and tenants to obtain the advice of an experienced commercial leasing lawyer when negotiating a commercial lease and certainly before finalizing any agreement.
At DBH Law in Calgary, our experienced commercial real estate lawyers help our clients manage the risks of commercial leasing by providing trusted guidance in all aspects of their leasing affairs.
Contact the experienced commercial real estate team at DBH Law in Calgary to see how we can help you through your commercial leasing matters. We work with our clients every step of the way, negotiating for you and protecting your interests in the event of a dispute. Please reach out to us online or by phone at 403.252.9937 to talk today.