Commercial Leases and Relief From Forfeiture: A Second Chance For Tenants During COVID-19?

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Leasing, Commercial Litigation, Contract Disputes, Contract Termination, Real Estate Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Today is the first day landlords can apply for the Canada Emergency Commercial Rent Assistance Program (CECRA) as reported in our blog last week entitled COVID-19 | Ontario-Canada Emergency Rent Assistance Program – Part 2. Although commercial rent relief is now finally available for the months of April, May and June 2020, it has been over two months since non-essential businesses in Ontario were required to close.  The gradual re-opening of some non-essential businesses, under strict guidelines, was only announced over the last few weeks.  According to a recent survey by CFIB, 48% of Ontario small businesses suffered a drop in revenue of 70% or more.  It is highly unlikely that these small businesses will survive the COVID-19 pandemic without further assistance. In addition, it has been widely reported that some commercial landlords will not participate in the CECRA program for various reasons.  Furthermore, the forgivable loan of up to … Read More

COVID-19 | Ontario-Canada Emergency Commercial Rent Assistance Program – Part 2

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Lease Arbitrator, Commercial Leasing, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Further to our blog entitled COVID-19 | Ontario-Canada Emergency Commercial Rent Assistance Program, CMHC has finally released further details about the OCECRA program including the opening date of the applications portal on May 25, 2020 at 8:00 a.m. EST. Amidst reports that many landlords were refusing to apply for the OCECRA program, Premier Doug Ford pleaded with landlords to participate in the OCECRA program, stating: “It is not going to be forever.  It is going to be for a few months.  Help people out.  You have an obligation to do that as a landlord”.  Prime Minister Justin Trudeau provided a more business-oriented argument for landlords to participate in the OCECRA program, stating: “With many people discovering that we can work from home … there may be a lot of vacancies in commercial buildings over the coming months and years.  Who knows exactly what the post-pandemic world will look like exactly?”. … Read More

COVID-19 | Ontario Announces More Businesses to Reopen During First Stage

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Business Interruption, Civil Litigation, Commercial Contracts, Commercial Leasing, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Debt and Enforcing Judgments, Event Cancellation, Event Termination, Real Estate Litigation, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Following on our previous blog last week entitled COVID-19 | Ontario Allows More Businesses To Reopen Soon, the Ontario government announced today plans for stage 1 to reopen the province, including allowing more businesses to reopen and/or relaxing restrictions on the delivery of goods and services. While the reopening of more businesses is welcome news after eight weeks in quarantine, Premier Doug Ford warned that individuals must still continue to practice social and physical distancing, and businesses should only reopen if they are ready to comply with the strict public health guidelines.  We cannot risk moving one step forward, but moving two steps back. The following is a list of some businesses that may reopen or expand their services on the following dates: May 16, 2020  Golf courses may open to the public but clubhouses only for washroom access and restaurants only for take-out (previously, golf courses could only prepare … Read More

COVID-19 | Ontario Allows More Businesses To Reopen Soon

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Business Interruption, Commercial and Contract Litigation, Commercial Leasing, Construction | Builders, Contract Termination, Coronavirus, COVID-19, Creditors Rights, Debt and Enforcing Judgments, Event Cancellation, Event Termination, Force Majeure, Franchise Law, Real Estate Litigation, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Following on the Ontario government’s announcement last week allowing a select few businesses to re-open earlier this week, there was another announcement yesterday allowing more businesses to re-open under the same strict public and health safety guidelines. The following is a list of businesses that may re-open, and their scheduled re-opening dates over the next week: May 8, 2020:  Garden centres and nurseries can re-open for in-store payment and purchases (previously, these businesses could only offer curbside pick-up and delivery); May 9, 2020:  Hardware stores and safety supply stores can re-open for in-store payment and purchases (previously, these businesses could only offer curbside pick-up and delivery);  May 11, 2020:  Retail stores with street entrances can re-open but they can only offer curbside pick-up and delivery (previously, non-essential businesses were required to be closed). Small businesses that are planning to re-open are reminded to follow public and health safety guidelines including The … Read More

COVID-19 / Coronavirus: Urgent Hearings in Small Claims Court

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Business Interruption, Civil Litigation, Commercial and Contract Litigation, Commercial Leasing, Condo Litigation, Construction Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Creditors Rights, Debt and Enforcing Judgments, Event Cancellation, Event Termination, Fraud Recovery, Mortgage Litigation, Real Estate Litigation, Retail Litigation, Shopping Mall Lease Litigation0 Comments

Since March 16, 2020, all hearings in the Ontario Small Claims Court have been suspended due to the COVID-19 pandemic.  Although the Superior Court of Justice has had procedures in place to bring an urgent civil or commercial list hearing since March 15, 2020, the Small Claims Court was left without the ability to hear urgent motions and garnishment hearings until today. Today, the Chief Justice of the Superior Court of Justice released the updated Notice Regarding the Suspension of Small Claims Court Operations to outline the procedure to request an urgent hearing in Small Claims Court and to provide guidance on the type of matters a judge may find to be urgent.  Urgent  hearings may include: Cases in which a judgment debtor has an outstanding warrant for arrest issued in relation to a Small Claims Court proceeding; or Time-sensitive cases that would result in immediate and serious financial hardship … Read More

COVID-19 | Ontario to Permit Some Businesses to Reopen on May 4

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Business Interruption, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Leasing, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Event Cancellation, Event Termination, Force Majeure, Government Action, Loan and Guarantee, Mortgage Enforcement, Mortgage Litigation, Real Estate Litigation, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

On May 1, 2020, the Ontario government announced that a select few businesses will be allowed to re-open on Monday, May 4, 2020 but with strict public health and safety measures in place.  Most of these businesses are seasonal businesses and some essential construction projects. This announcement follows from the release earlier this week of the three-staged Framework for Reopening our Province which included stage 1 to reopen certain Ontario businesses gradually under strict guidelines in order to allow the economy to return to some sense of normalcy while continuing to safeguard the public and limit health risks. The following is the list of businesses that may be re-opened on May 4, 2020: Garden centres and nurseries – but they are restricted to alternative methods of sale such as curbside pickup and delivery; Lawn care services and landscaping services; Essential construction projects including shipping and logistics; broadband, telecommunications and digital … Read More

COVID-19 | Ontario-Canada Emergency Commercial Rent Assistance Program

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Commercial and Contract Litigation, Commercial Lease Arbitrator, Commercial Leasing, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

On April 16, 2020, the Federal government announced the Canada Emergency Commercial Rent Assistance Program (CECRA) but could not provide further details because discussions with the provinces and territories were required for the administration and implementation of the program. Today, the Ontario government announced the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA) and provided further details on the eligibility requirements and the terms of the forgiveable loan.  The OCECRA is expected to be operational in mid-May 2020, and will provide commercial rent relief for the months of April and May (retroactively) and June 2020. We summarize the OCECRA as follows: Ontario-Canada Emergency Commercial Rent Assistance Program – Updated May 7, 2020 What is the purpose of OCECRA?  To provide relief to landlords and small business tenants affected by COVID-19 by providing forgivable loans to landlords to cover 50% of the gross monthly rent for April, May and June 2020. Who … Read More

Corporate Governance Considerations During the Covid-19 Pandemic

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Law, Business Litigation, Business Torts | Economic Torts, By-laws, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Coronavirus, Corporate Disputes, Corporate Litigation, COVID-19, Derivative Actions, Directors' and Officers' Liability, Family Business Disputes, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Retail Disputes, Retail Litigation, Sale of Business Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Corporate governance issues are top of mind for directors and businesses who are attempting to navigate through the Covid-19 Pandemic related closures and emergency measures. Boards of Directors still need to operate and make decisions in the best interests of the corporation, and this can involve tough decisions, particularly where there is little guidance as to how measures to lift Covid-19 related restrictions will play out. By example, while it may be in the best interest of investors and shareholders that the Board act to lay off employees in the short term, the impact of staff shortages when Covid-19 restrictions are lifted may pose it’s own challenges. Many businesses must consider how to hold governance meetings during Covid-19 times. On March 30, 2020, Ontario passed an Order under the Emergency Management and Civil Protection Act (EMCPA), (Ontario Regulation 107/20) entitled “Meetings for Corporations” making temporary changes to the Business Corporations … Read More

Small Business Relief Resources During COVID-19 / Coronavirus

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Business Interruption, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Leasing, Commercial Lending, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Creditors Rights, Debt and Enforcing Judgments, Distribution Agreements, Event Cancellation, Event Termination, Force Majeure, Franchise | Licensing, Government Action, Loan and Guarantee, Mortgage Enforcement, Mortgage Litigation, Real Estate Litigation, Retail Disputes, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

On April 14, 2020, the Ontario legislature passed a bill during an emergency sitting to extend the state of emergency to May 12, 2020. The state of emergency in Ontario was initially declared on March 17, 2020, and subsequently extended to April 14, 2020.  Under the Emergency Management and Civil Protection Act, any further extensions must be passed by the legislature, and can only be extended for additional periods of no more than 28 days.  On May 12, 2020, the state of emergency was extended to June 2, 2020 (Updated: May 12, 2020). Although the extension of the state of emergency does not automatically apply to individual orders such as the closure of non-essential businesses, it is expected the mandatory closure of non-essential businesses will be extended as well to combat the COVID-19 pandemic.  In addition, many small businesses (deemed essential) have voluntarily closed due to safety concerns for their … Read More

The Impact of Covid-19 / Coronavirus On Franchise Disclosure Obligations

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Litigation, Commercial, Commercial and Contract Litigation, COVID-19, Force Majeure, Franchise | Licensing, Franchise Law, Government Action, Retail Disputes, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

The Covid-19 / Coronavirus pandemic has disrupted social and economic life globally and here in Ontario. It is apparent that the Covid-19 pandemic, resulting closures and physical distancing measures implemented by various governments will have a considerable impact on investment decisions in the franchise context. In this blog we consider the impact of the Covid-19 pandemic on current and shortly anticipated franchise disclosure obligations. The Crucial Role Of Franchise Disclosure The franchise disclosure obligations which arise during a franchise purchase or franchise renewal process are critical for both franchisees and franchisors. It provides crucial information to a franchisee so that they can make a fully informed investment decision, and sets the groundwork and expectations on behalf of the franchisor to ensure the relationship is off to a good start and lasts to the mutual benefit of both parties. Updating Franchise Disclosure With Covid-19 / Coronavirus Impact Considerations Franchisors who are … Read More

Covid-19 Pandemic Closures: Considerations For Commercial Tenants And Landlords

Sabrina Saltmarsh, B.A. (Hons), J.D.Building | Property Management, Business Disputes, Business Interruption, Commercial and Contract Litigation, Commercial Contracts, Commercial Lease Arbitrator, Commercial Leasing, Commercial Litigation, Contract Termination, Coronavirus, COVID-19, Force Majeure, Franchise | Licensing, Government Action, Injunction & Specific Performance, Insurance, Property Management, Real Estate Litigation, REIT Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

What can commercial tenants and landlords do to protect themselves from the impact of Covid-19 related closures on commercial lease obligations? Here are some tips for businesses who are in the difficult situation of having to deal with potential defaults on commercial rent obligations related to closures or reductions due to the Covid-19 situation. 1. Review The Lease Agreement Carefully For Potentially Relevant Clauses In Ontario, the commercial landlord-tenant relationship is governed by the Commercial Tenancies Act, R.S.O. 1990, c. L.7., (the “Act”) which outlines the relationship, rights and obligations between commercial landlords and tenants. However these relationships are heavily governed by the commercial lease agreement in place between the landlord and the tenant, which can take precedence over the Act based on the agreement of the parties. Review the Act and more importantly, review your commercial lease agreement carefully to appreciate whether the agreement contemplates the type of situation … Read More

Capturing Online Sales in Shopping Mall Commercial Leases

Gilbertson Davis LLPCommercial and Contract Litigation, Contract Disputes, Counterfeit Goods, eCommerce | Online Retail, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

As more business is done online, and as traditional brick-and-mortar retail stores decrease in popularity, shopping malls and retail shopping landlords are looking for more creative methods to maximize rental income. It is not uncommon for a shopping mall lease to require the tenant to pay a percentage of their sales as part of the additional rent. Many stores, however, also do a significant amount of business online. While tenants usually consider such sales to be separate from sales at their physical storefront, landlords may consider those sales as attributable to the storefront and subject to additional rent.  It is important for any commercial lease to be clear how additional rent is calculated, and if additional rent includes a percentage of revenues, it should be clear to all parties what revenue is included and what revenue is excluded. Where a lease is unclear, the court will often rely on the principle of contra proferentum and … Read More