As predicted in our previous blog, B.C. Bans Evictions if Commercial Landlords Fail to Apply to CECRA: A Similar Ban Coming to Ontario?, the Ontario Government announced yesterday that it had passed legislation to protect commercial tenants from evictions and having their assets seized by their landlord during COVID-19.
After British Columbia, Alberta and Saskatchewan took steps in the last two weeks to protect small business tenants from landlords that choose not to apply for the Canada Emergency Commercial Rent Assistance (CECRA) program, Ontario Premier Doug Ford finally followed through on his promise to protect small business tenants during COVID-19.
On June 18, 2020, Bill 192, Protecting Small Business Act, 2020 (the “Act”) received Royal Assent, and officially amended the Commercial Tenancies Act to prohibit landlords, that are or would be eligible to receive assistance under the CECRA program, from evicting tenants or exercising distress remedies in the period from May 1, 2020 to September 1, 2020.
The seven things you need to know about the Act are:
1. Application: It only applies to commercial tenancies where the landlord is or would be eligible to receive assistance under the CECRA program had the landlord chosen to apply to the program.
2. Relief Period: The “non-enforcement” period is defined as the period from June 18, 2020 to September 1, 2020 (or an earlier date to be named by proclamation) but the Act also provides protection retroactively to May 1, 2020.
3. Restriction on Eviction Orders: Judges are prohibited from ordering a writ of possession (eviction order) that is effective during the non-enforcement period if the basis for ordering the writ is rent arrears. This restriction applies in respect to actions or applications that were commenced before, on or after June 18, 2020. The Act appears to allow a judge to issue an eviction order if the default is not related to rent arrears.
4. Restriction on Re-Entry: The landlord is prohibited from exercising a right of re-entry during the non-enforcement period. If the landlord exercised a right of re-entry in the period between May 1, 2020 and June 18, 2020, then the landlord must, as soon as reasonably possible: (a) restore possession of the premises to the tenant unless the tenant declines to accept possession; or (b) if the landlord is unable to restore possession of the premises to the tenant, then the landlord must compensate the tenant for all damages sustained.
5. Restriction on Distress: The landlord is prohibited from seizing goods or chattels as a distress for rent arrears during the non-enforcement period. If the landlord seized any goods or chattels as a distress for rent arrears in the period between May 1, 2020 and June 18, 2020, then the landlord shall, as soon as reasonably possible, return to the tenant all of the unsold goods and chattels.
6. Restrictions Not Applicable if Landlord Approved to Receive CECRA Assistance: After applying and receiving approval to receive assistance under the CECRA program, the landlord may: (a) commence an action or application for a writ of possession (eviction order); (b) exercise a right of re-entry; and (c) seize goods or chattels as a distress for rent arrears. For example, if the tenant failed to pay its 25% share of the rent, or committed other non-rent defaults under the lease, then the Act appears to permit the landlord to take these actions after the three-month moratorium under the Rent Reduction Agreement.
7. Liability for Re-Entry and Distress: Landlords that fail to comply with the restrictions are liable for any damages sustained, in addition to any other remedy available at law.
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