Rent Relief Options for Business & Property Owners
Many business and property owners are still unsure of what to do about rent. Many businesses are worried that paying rent while non-operational may lead to the closure of their business. Meanwhile, property owners want to avoid losing wonderful commercial tenants, minimize their own exposure, and not be left with an empty storefront. Even with the Canada Emergency Commercial Rent Assistance (CECRA) program proposed by the government, negotiating compassionate rent relief still needs to happen between the commercial property owners and their tenants themselves.
To help property and business owners navigate these negotiations, consider the following resources:
- COVID-19 and Commercial Leases: Advice for Small Businesses and Landlords, prepared by Councillor Brad Bradford.
- Rent Relief in a World of Coronavirus is a FREE webinar discussing landlord and tenant strategies for negotiating rent relief with an eye towards economic recovery. A digital recording is found in the link; register to access.
- OMG Real Estate has compiled editable Word Template Letters that business owners can use to start the discussion with their property owner.
- Caravel Law has put together a Supporting Commercial Landlords and Tenants FAQ, plus are happy to answer your questions.
Some examples of innovative partnerships between property owners and tenants include:
- CECRA provides a 50% loan/grant by the government to property owners who agree to forgo 75% of the rent for tenants for April, May, and June. This program allows the government to cover 50% of rent, the tenant to cover 25% of rent, and the property owner to forfeit 25%.
- The use of last month’s rent for April and making a payment plan to top it up again.
- A discounted rent relief for the month of April (or for however long is needed) with the remaining amount to be paid in equal instalments over the following months (ex. Landlord Rent Relief Sample Letter). Some property owners may consider forgiving the discounted amount entirely.
To make options more manageable for property owners, there is:
- A Grace Period for Municipal Property Taxes
- A Grace Period for Municipal Utility Bills
- A possible 6-Month Payment Deferral for Mortgages. This is not interest-free, but we, TABIA, and elected officials are advocating for interest-free deferrals and forgiveness (see below).
We are also continuing to advocate on your behalf to the federal and provincial governments to provide rent relief supports to property owners and small businesses. See below for updates:
- Apr 16 – The Federal Government announces its intent to introduce the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. The program will seek to 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. It will require a partnership between the federal government and provincial and territorial governments, which are responsible for property owner-tenant relationships. More details to come.
- Apr 14 – Our provincial representative MPP Bhutila Kharpoche and provincial NDP are calling on the provincial government for Rent Relief for Small Businesses on behalf of local businesses and BIAs.
- Apr 14 – Prime Minister Justin Trudeau said today to expect more announcements this week for help for students, essential workers, businesses’ commercial rent, and other sectors that have been hit hard. We are hopeful.
- Apr 14 – Tourism Industry Association of Ontario (TIAO), the Ontario Businesses Improvement Area Association (OBIAA),and the Economic Developers Council of Ontario (EDCO) delivered A Joint Letter to the Federal Government, calling for 1. Commercial Rent Relief; 2. Interest Relief on Debt; and 3. Financial Aid, Not Debt Deferral.
- Apr 9 – TABIA created a Commercial Rent Abatement Strategy, which shares the burden of rent relief equally across the government, financial institutions, property owners, and businesses. This proposal has been shared with the federal government, including our MP Arif Virani.
In the end, negotiating compassionate rent relief can only be done when and both sides understand each other’s concerns. And don’t forget, all negotiations should be confirmed in writing