With the current environment, tenants and landlords are in the same boat when it comes to rent. Tenants are worried about their inability to make rent; landlords are worried about their operating costs and many people from both parties find themselves unable to meet the obligations of their contracts. 
Currently, no new eviction orders will be issued until further notice and sheriff’s offices will postpone any scheduled enforcement of current eviction orders.3 

Tenants who are able to pay their rent must do so, to the best of their abilities. If not, an honest conversation between a landlord and tenant is often the best first step in dealing with this challenging problem. With this conversation, deferring payments is the most common approach at this moment.  Looking into the future of lease agreements due to COVID-19, we can perhaps start to see ‘pandemic clauses’ become a standard feature of leases and agreements.1 

In the meantime, here is a list of short-term solutions that landlords may consider:

•	Basic Rent abatement or deferral.2 

•	Basic Rent suspension for defined periods i.e. 3-6 months or longer depending on the nature of the tenancy.2

•	Basic Rent deferrals for a defined period and a corresponding increase of Basic Rent at a point in the future to make up for a Basic Rent deferral.2

•	Either eliminating or reducing the obligation to pay Basic Rent and replacing it with the requirement to pay Percentage Rent for a defined period of time.  A switch to paying Percentage Rent is similar to a "pay what you can" approach.2 
  
•	Less common, is abating or suspending both Basic Rent and Operating Costs. Typically, landlords like to recover at least their out of pocket expenses such as realty taxes, insurance, utilities still and maintenance costs.2

•	Reduction or elimination of administrative fee and/or management fee component of operating cost charge.2

•	Reduction or elimination of promotional and marketing fees.2

•	Reduction of services offered and performed at the property to effect a reduction in operating costs to be charged to tenants during the COVID pandemic crisis.2

•	Depending on the size of the property, number of tenants and nature of the tenancies in a given property, a landlord can consider a reduction of services provided to tenants during the state of emergency, which would potentially reduce operating costs.2

•	If the landlord would rather that a particular tenant vacate its premises, then the landlord may consider building in an automatic termination or an option to terminate for the landlord.2

•	Ensure that any concession you agree to clearly provides the following2:

         → insert a consideration clause;

         → clearly state when the concession expires;

         → the lease is otherwise in full force and effect and remains unamended;

        → time shall continue to remain of the essence;

        → the concession is not a waiver of any other clause in the lease;

        → the indemnifier signs the amendment, if applicable.

Assistance for Tenants

If you need help financially you can:
• contact your local service manager
• apply for COVID-19 emergency assistance
• access federal government programs

Assistance for Landlords

Landlords may wish to:
• talk to their municipality about help with property taxes and municipal service fees.
• inquire with their mortgage lender about mortgage payment deferrals
• investigate federal government programs

Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Hinton, K., & Mckenzie, R. (2020, April 1). 5 tips for handling commercial leases and contracts during COVID-19 and beyond. Retrieved April 20, 2020, from https://www.bcbusiness.ca/5-tips-for-handling-commercial-leases-and-contracts-during-COVID-19-and-beyond. ²Lanteigne, J., & Rosen, S. D. (2020, March 26). COVID-19 (coronavirus) advisory: Commercial landlord survival guide. Retrieved April 19, 2020, from https://gowlingwlg.com/en/insights-resources/articles/2020/covid-19-commercial-landlord-survival-guide/ ³Ministry of Municipal Affairs and Housing. (2020, March 28). Renting: changes during COVID-19 (coronavirus). Retrieved April 19, 2020, from https://www.ontario.ca/page/renting-changes-during-covid-19