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Insight: REIBC blog > Pandemic Effect on Leases

Pandemic Effect on Leases

posted on 10:52 AM, November 26, 2021

COVID-19 impacts, including government-ordered pandemic restrictions, have affected tenancy relationships. Many businesses and residents experienced loss of income and employment, finding themselves in difficult situations when rents were due.

The COVID-19 pandemic was—and still is—difficult for many businesses. Many sectors have experienced losses and various mandatory lockdown periods and restrictions have taken a toll. “Existing rent obligations in the face of these difficulties caused concern for many tenants who lease commercial space,” say Lex Pacifica’s John McLachlan, RI, and Nicole Wong. “Landlords were also put into a difficult position where they were still responsible for operating costs even if there were no rent payments coming in.”

Those who rent their homes have felt similar pressures. “Many renters were laid off as a result of the pandemic, leading to concerns of whether they would be able to pay rent and keep a roof over their heads,” say McLachlan and Wong. “As is the case with commercial tenants, the renter is generally still responsible for their rent until the term of the lease agreement is up. The threat of COVID-19 has not relieved tenants from their obligations to pay rent.”

Various programs were initiated by the federal government and the BC government to assist those with commercial tenancies who were affected by the pandemic. The Canada Emergency Commercial Rent Assistance (CECRA) program to assist commercial tenants with rent was introduced in May 2020. However, problems with the structure of this program were revealed from the start. The pool of businesses deemed eligible to apply for CECRA was quite limited, and the program relied on the participation of landlords. In September 2020, CECRA was replaced with the Canada Emergency Rent Subsidy (CERS). CERS is still in operation and is a more direct and accessible rent support program that allows commercial tenants to apply for subsidies without landlord participation.

Input Summer 2021
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For more about commercial and residential tenancy assistance programs and their challenges, read McLachlan and Wong’s “The Effect of COVID-19 on Commercial and Residential Leases” in the Summer 2021 edition of Input. Download Summer 2021

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