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BC government offers eviction protection to Commercial tenants

Today’s eMemo contains the following update:

  • BC government offers eviction protection to Commercial tenants

BC government offers eviction protection to Commercial tenants

On June 1, BC’s Minister of Finance Carole James applied more pressure on Commercial landlords to sign rent forgiveness agreements with their small business tenants who qualify for the federal Canada Emergency Commercial Rent Assistance (CECRA) program.

A new order under the province’s Emergency Protection Act prohibits a Commercial landlord who may be eligible for the CECRA program from terminating lease agreements or repossessing goods or property. As outlined in the order, there are exceptions.

According to Save Small Business, a grassroots coalition of close to 40,000 small businesses in Canada, as of the end of April, only one in five small businesses expected their landlord to apply for CECRA on their behalf. The BC government’s goal is to encourage landlords to apply.

Timing of the ministerial order:

The order will be in place until the end of June, in line with the current end date of the CECRA, or until BC’s state of emergency expires or is cancelled (whichever date is earlier.)

Canada’s Commercial Rent Assistance (CECRA) program:

Under the CECRA program, the Canada Mortgage and Housing Corporation (CMHC) offers unsecured, interest-free and forgivable term loans to eligible commercial property owners.

  • The rent owed by small business tenants must be reduced by at least 75% during the months of April, May (retroactive) and June 2020.
  • To qualify, the tenant’s business must have experienced at least a 70 per cent drop in revenue.
  • The landlord must cover at least 25 per cent of the rent, the tenant no more than 25 per cent, while the federal government and provinces share the remaining 50 per cent.
  • The program is targeted to small business tenants that pay less than $50,000 per month in rent and don’t make more than $20 million in gross annual revenue.
  • Landlords must voluntarily apply for the program and should they become aware that the tenant has supplied false or misleading information, must make commercially reasonable efforts to recover and repay CMHC the portion (or all) of the loan allocated to the tenant.
  • Landlords and tenants are encouraged to seek independent legal advice on the benefits and risks of the program.

The CECRA program is accepting applications until August 31, 2020. BC will consider extending the eviction protection if the federal government pushes commercial rent relief past June.

More information on CECRA:

Visit Canada Mortgage and Housing Corporation’s CECRA page.

Source: FVREB Communications

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