23 Jan Pause to Commercial Eviction Ontario, Landlord Rights & Remedies
The Protecting Small Business Act, 2020 (the “Act”), formally known as Bill 192, received royal assent on June 18, 2020. The Bill amends the Commercial Tenancies Act to temporarily prevent eligible commercial landlords from taking certain actions against small business tenants for the non-payment of rent during Covid-19. The non-enforcement period began on June 18, 2020, and is effective until the Act is repealed on September 1, 2020, or on an earlier day to be named by proclamation of the Lieutenant Governor.
The Act affects the enforcement of a landlord’s rights and remedies against a tenant for rent arrears. It prevents evictions during the non-enforcement period and prevents re-entry and the seizure of assets or chattels from May 1, 2020 – September 1, 2020.
Am I Affected?
Landlords who evict or evicted a commercial tenant during the non-enforcement period are affected if they are or would be eligible to receive assistance under the Canada Emergency Commercial Rent Assistance (“CECRA”) for the small business program, whether by entering into a rent reduction agreement with the tenant containing a moratorium on eviction or not.
Landlords are not affected if the tenant default occurred after they were approved to receive assistance under the CECRA for small business programs or if they are not eligible for the program.
The CECRA program offers forgivable loans to commercial property owners to cover 50% of monthly rent payments owed by small business tenants during the months of April, May, and June. Property owners are required to reduce rent by 75%, meaning that they forgo 25% of the rent payment. Applications are currently open until August 31, 2020, and the rent assistance will apply retroactively.
Ban on Evictions
To eligible landlords, the Act prohibits judges from ordering a writ of possession on the basis of rent arrears that are effective during the non-enforcement period. This temporary ban on commercial eviction Ontario applies in respect of any action or application that was commenced before, on or after the day this Act came into force.
For clarity, eligible landlords may not evict tenants during the non-enforcement period, regardless of when their original action for eviction was commenced.
Restoration of Possession and Compensation for Re-Entry
Eligible landlords who exercised their right of re-entry on or after May 1, 2020, are required to restore possession of the premises as soon as reasonably possible unless the tenant declines. If landlords are unable to restore possession of the premises, they must compensate the tenant for all damages sustained.
If a landlord restores the premises or compensates the tenant, the tenancy is deemed reinstated on the same terms and conditions as previously, unless agreed otherwise.
Return of Seized Goods or Chattels
During the non-enforcement period, landlords may not seize any goods or chattels as a distress for arrears of rent. Goods that have already been seized and were seized after May 1, but were unsold as of June 18th, are to be returned to the premises.
Non-Compliance with the Act
In addition to any other remedy available at law, a landlord who contravenes the Act in terms of re-entry or the seizure of goods or chattels is liable for damages to the person aggrieved as a result of the contravention or non-compliance.
If you have any questions regarding the matter, please do not hesitate to contact Leslie Fluxgold directly at lfluxgold@fijlaw.com or at 905 763 3770 x 210.
*The material provided in this article is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.
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*Reference: https://www.ola.org/sites/default/files/node-files/bill/document/pdf/2020/2020-06/b192ra_e.pdf
Leslie A. Fluxgold is a respected advisor to the business community, with a focus on commercial real estate and commercial lending. Having served as counsel for the Ministry of Municipal Affairs and Housing, practiced privately for over 20 years, and spent over 15 years acting for many of Canada’s leading commercial lenders, Les has the expertise and hands-on experience to guide clients through complicated real estate matters and commercial loan transactions. He identifies their objectives, assesses their options and gets them to the finish line.