Rent Payment and Residential Lease Enforcement: COVID-19 Update
By Sean O’Donnell
These blog posts are meant to provide educational content and are not to be taken as legal advice.
As the economic impact of the COVID-19 outbreak continues to ripple across the country, many will be feeling the biggest hit yet as April 1 arrives and rent payments are due. This new month is a pressing deadline for tenants and landlords alike as the outbreak keeps many people at home and closes all non-essential businesses, leaving tens of thousands of Canadians out of work. The federal government has implemented various remedial measures to assist businesses and its employees in these trying times. The Ontario provincial government has also implemented its own host of measures related to residential leases, as seen below. With increasing pressure felt across people’s pocketbooks coupled with great uncertainty looming, it is important to familiarize yourself with the current rules in the province relative to rent payments and evictions during COVID-19.
The following provides a summary of eviction rules under normal conditions, followed by the amended rules currently in effect as a result of COVID-19.
In response to the increasing impact of COVID-19, the Ontario government has announced that it will temporarily halt the issuance of any new eviction orders until further notice. Further, Sheriff’s Offices will postpone any scheduled enforcement of current evictions until further notice. While favourable to tenants, the obligation to pay rent while eviction orders are not being enforced still remains.
If the landlord gives a tenant notice to end the tenancy, the tenant does not have to move out. This is true pre-COVID-19 and during. The landlord is required to apply for an eviction order from the Landlord and Tennant Board (the “LTB”).
Step 1: Notice
Under normal circumstances, the first step to an eviction process is for the landlord to give the tenant a notice in writing that they want the tenant to move out. Notice must be given with an official notice form provided by the LTB. Under the current circumstances of COVID-19, landlords are still permitted to issue eviction notices, however, they are being encouraged to work with tenants to establish “fair arrangements” to keep tenants in their homes. This includes deferring rent or making other payment arrangements.
Step 2: Application
Under normal circumstances, and provided the tenant has failed to remedy the situation or move out, landlords can file for an application to the LTB in order to end the tenancy. Under the current circumstances of COVID-19, LTB counter services are closed, however, the most common types of applications can still be filed online.
Step 3: Hearing
Under normal circumstances, the LTB will usually schedule a hearing to decide the landlord’s application. It will mail a ‘Notice of Hearing’ to the landlord(s) and tenant(s) along with a copy of the application. Under the current circumstances of COVID-19, all hearings related to eviction applications are suspended until further notice (exceptions: urgent disputes and those involving illegal acts or serious safety concerns).
Step 4: Order
Under normal circumstances, a LTB member will make a decision regarding the landlord’s application to end the tenancy. Under the current circumstances of COVID-19, however, no new eviction orders will be granted until further notice, unless it relates to an urgent issue such as an illegal act or serious safety concern.
Step 5: Enforcement
Under normal circumstances, and provided a tenant has failed to leave the rental property as of the termination date outlined in the eviction order, a landlord is not permitted to personally enforce the order. This also prohibits landlords from changing the locks. Instead, an eviction order can only be carried out by the Court enforcement office, otherwise known as the “Sherriff’s Office”. Under the current circumstances of COVID-19, the enforcement of residential eviction orders is suspended until further notice. According to an order by the Superior Court of Justice, the enforcement of eviction orders is suspended during the suspension of regular court operations.
COVID-19 Analysis and Impact
While the announcement to suspend all eviction orders was welcome relief to renters, it has also sparked some concern for landlords who rely on tenants for their monthly income. Although a concern, containing the spread of the outbreak remains the top priority of Ontario’s provincial government. How can they ask people to stay home and prevent the spread of COVID-19 if they are to be kicking tenants to the curb? Therefore, it appears in the present time that tenants are safe from eviction, but this should not be viewed as a “free pass” to forgo rent payments. As previously mentioned, tenants are still obligated to make rent payments during COVID-19, however, if current circumstances are making such obligations impossible, tenants and landlords are being encouraged to work cordially and determine necessary modifications, which may include rent deferral or other payment arrangements.
Some of Canada’s largest residential landlords have stated they’re committed to working with tenants who have lost their job because of COVID-19. Mark Kenney, CEO of Canadian Apartment Properties Real Estate Investment Trust, has said, “If anybody’s lost their job, we are there to support them, and there to work with them through this crisis”, further mentioning, “We are violently against evicting people that find themselves in a place of distress right now”. The Company manages more than 65,000 residential rentals across Canada, and has said to those who are in crisis to get in contact with their property manager to explain their situation, offer to pay what they can, and discuss ways to repay unpaid amounts over time. Other rental companies such as Northview Apartment REIT, Greenwin Corporation, and Boardwalk REIT have also issued similar statements to its tenants, asking for them to communicate their position and they will be met with “various degrees of support”. While this is reassuring news for those whose tenancies are with these larger rental companies, the fact remains that eighty (80) percent of landlords in Canada are small-scale owners of units who do not share the same level of flexibility as larger rental companies.
In a very ‘Canadian’ fashion, some rental operators like Greenrock, a firm with no less than nine residential communities across Toronto containing tens of thousands of tenants between them, has provided each of its residents with a $100 grocery card and a $300,000 donation to local charities impacted by COVID-19. Residents with Greenrock are also able to choose to have either a portion or the entirety of their last month’s rent deposit used as a credit toward their regular rent payment, with the amount to be replenished in the future at no additional cost or interest. While encouraging other landlords to take note, the reality on the ground is that the majority of landlords in the province and in the country will be unable to follow suit; instead, they too will be impacted financially as the trickle down effect to Canada’s economy, stemming from tens of thousands of job losses and layoffs, begins to take shape.
What then are your obligations as a tenant at the present time?
The answer to this question will very much depend on the context of one’s situation. If the impact of COVID-19 has rendered you to decide between putting food on your table or paying rent, the obvious answer is to put food on your table. The provincial government has made clear that it will stand by to ensure that no one, at least for the immediate future, will be evicted for failing to pay rent. On the other hand, if you are financially able, and your job has not been affected by COVID-19, the obligation of paying rent as outlined in your lease agreement still applies. In fact, the obligation to pay rent remains for all tenants, despite their ability to pay. Further, if you are currently subject to an eviction order that is not being enforced due to COVID-19, you are still obligated to pay rent during this period.
A recent petition going around to cancel rent and mortgage payments has gained hundreds of thousands of signatures. This should be met with extreme caution and individual tenants should not operate on the basis that rent and/or mortgage payments will be cancelled or assume that the government will cover unpaid rent during COVID-19. To be clear, there is no change in the law that reflects an individual’s ability to forgo monthly rent payments. Tenants who fail to pay rent are going to be required to pay it at some point, or at the very least, someone will have to pay it. It would be unwise for tenants to operate on the assumption that anyone, but themselves, will be held liable for overdue rent payments. In other words, despite the temporary suspension of evictions, tenant obligations remain and will continue to do so. Therefore, while the short-term repercussions appear to be limited, it is the longer-term impacts in the months and years to come when we have lifted ourselves out from underneath the COVID-19 pandemic that tenants should bear in mind.
As previously mentioned, and as encouraged by provincial government, both tenants and landlords should be working together to find reasonable, practical, and fair solutions in these circumstances. It is crucial for both parties to work as a harmonious unit, implementing necessary changes to rent amounts and/or rent deferral options, keeping in mind the obligation to act in good faith. Tenants, be honest and transparent with your landlord. Landlords, be understanding and creative in finding appropriate solutions. Remembering that both parties share a common and unprecedented challenge in 2020 will help align what are usually thought of as competing interests.
If you seek legal advice relative to your rights and obligations as a tenant or landlord, please contact us for a consultation.