The Incoming Tsunami: Tenant / Landlord Issues

By: Jacob Asparian

The Incoming Tsunami: Tenant / Landlord Issues

Tags: real estate, covid-19, renter, landlord, tenant, lease, commercial, residential

Hey what is going on everyone? Day 3 of the province shutdown and we are all still dealing with the repercussions of this pandemic.  Now over the past week, we’ve talked about how the current issues are affecting local businesses and how our office is dealing with it. You can read that here.


A looming issue is fast approaching that doesn't seem to have a simple solution for anyone involved. In less than a week, a large majority of commercial and residential tenants around the country will have to pay rent even though they may not have been working for over half the month. So what do they do? 


I’ve spoken to both tenants and landlords and I keep hearing the same questions. 


“What should we be saying to our tenants?”

“Can I evict them for non payment?”

“I lost my job and I can’t afford rent”

“I will be late on my rent. What can my landlord do”


There are so many different scenarios that it is tough to give a blanket answer. According to CMHC, we have over 4 million renters in Canada. Of those, 3.4 million Canadian households who rent have their primary source of income come from wages or self-employment! 46% of those renters have less than one month savings in reserves. That is 1.5 million households around the country! This doesn’t include the number of business owners that have commercial leases who have been affected by this. 


Residential landlords, now is a great time to touch base with your tenants. Ask them how they are, if they need anything and if they will be able to pay rent on April 1. Open communication is extremely important in times like these and landlords should expect most tenants to be affected in their ability to pay. 


Ontario has currently announced a moratorium for all residential eviction orders and enforcements. This means no evictions can be processed and even evictions unrelated to the covid 19 shutdown will get caught in the mix .                                                                                

Tenants, pay your rent if you can because you still owe your full rent legally! While there is a moratorium on evictions now, the LTB will inevitably unfreeze eviction orders and enforcement. The more you pay now, reduces how much you need to catch up on later. If you can’t pay, talk to your landlord and discuss with them. Communication is key! Ignoring them or just saying you aren't going to pay is not fair to the landlords either. 


Remember, late rent payments can still affect your credit score. However, if you have stopped working and it is a question of paying your rent or feeding yourself and your family, your landlord can wait. No matter what kind of threats they make, you will not be evicted right now. You may still be on the hook for the rent, but right now everyone is in survival mode. 


Landlords are still within their rights to evict for non payment of rent. Even with the moratorium on evictions you can submit an N4 . It is important to document all interactions in case this eventually gets heard in court but i'm sure the backlog of cases to be heard is going to be very high. While you may have tenants who will try and take advantage of the current situation, let’s not forget how everyone has been affected and to proceed with compassion. Renters statistically have a lower net worth than homeowners and are less likely to be able to withstand a prolonged work stoppage. 

Commercial tenants, while you dont have the same protection that the residential tenants in Ontario have, I would still recommend you to speak to your landlords and work on a mutually beneficial plan. Would I pay 100% of the rent? No way (*not legal advice). Cheesecake Factory has told its landlords it won't be able to pay rent on April 1.  This shutdown can and will decimate small businesses across Canada. Do everything you can to negotiate a rent break or something to help in these challenging times. You should review your lease, see if a force majeure clause was included but most definitely talk to a contract lawyer. We are all in survival mode and we don’t know how long this will last for. The situation will only get more serious the longer this shutdown lasts.


Everyone is affected by this. Renters, homeowners, business owners, small and large landlords. While we’re all in this together, it seems to be a financial hot potato issue with everyone trying to pass the buck to the next person. It won't be an easy conversation but we need to be proactive and start now. 


As always, if you have any questions, please never hesitate to reach out! Stay healthy and happy!


1 Message Us On Facebook Message us on Facebook!