Times are tough in this new COVID-19 world. Tenants’ businesses are closed, staff have been laid off, and while revenue has all but dried up, expenses continue.
The Canadian Government has announced the creation of the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. CECRA will provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June. While exact details have not been announced, the CBC spoke with tenants, landlords and other stakeholders and came up with 5 key elements they feel the program must have:
- Grants, not debt or deferrals – for the program to be helpful, it needs to provide relief, not deferrals or more debt.
- Be fair to tenants and landlords alike – rent relief is great for tenants but doesn’t provide relief for landlords.
- Be fast and focused – the government has done a good job of getting programs out quickly but this one needs to be further defined as May 1 is just around the corner
- Cast a wide net – ideally, it will cover many sectors: retail; full-service restaurants; arts, entertainment and recreation; health care; and social assistance.
- Put a ban on business evictions – if evictions are possible then having a rental program won’t matter.
Nick Rockel over at BCBusiness also had some tips for how tenants can get through these trying times when dealing with their landlord or signing a new lease:
- Buy yourself some time by deferring rent – have open communication with your landlord around deferring rental payments to keep a strong relationship.
- Get it in writing – keep a written record of any agreements you make with your landlord.
- Remember, everyone’s in the same boat – your landlord is just as stressed as you are, be empathetic towards each other.
- Make room for a pandemic clause – if signing a new lease look for a pandemic clause to ensure you’re protected in the future.
- Thinking of suing? Think again – courts are closed except for emergencies so litigation could take months and at that point, we may well have weathered the storm.
Advice From Real-Life Experts
We spoke with a few commercial landlords and asked them how they are working with their tenants and what advice they would give to other landlords:
“Communication is key. Letting the tenants know you are aware of their problems and will be willing to be flexible but also inform that rents will need to be paid, not forgiven. We have let tenants delay April payments. This missed payment will be spread over the next 3 months to catch up. The hope is government funding comes by the end of April to help these tenants.”
– Sean Lawson, Realtor / Builder
“Now is the time to stay in contact with our tenants. To reach out to them and invest the time to get to know them and their businesses. The more we know about them the better we will be able to respond to their current and future needs”
– David Porte, President, Porte Communities
The BDC put together an exhaustive list of resources & insights for companies to navigate the Coronavirus crisis. There are lots of programs out there, and the BDC has done a good job of breaking them down by Province.