UPADATE ON THE MORATORIUM ON COMMERCIAL TENANCY EVICTIONS IN ONTARIO

The Ontario government had temporarily banned the evictions of commercial tenants by enacting several Acts that protected commercial tenants from being evicted or having their assets seized if those tenants owed rent (or other monies).

This ban on commercial evictions applied to commercial landlords who could have (but did not) apply for the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses program, even though their tenants would otherwise have been eligible for the program.

The commercial tenants that were eligible for the CECRA for small businesses program were protected from being evicted for unpaid rent. (This applies to commercial tenants that would be eligible if applications were still being accepted, even if the businesses had not previously participated in the program), Furthermore, the landlord could not change the locks or seize the commercial tenant’s assets. The landlord could still go to court to get an eviction order, but if the order was for unpaid rent, the court could not make it enforceable before the temporary ban on evictions was lifted.

Bill 229, (the Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 was officially approved and came into force on December 8, 2020. The purpose of this Act is to put into effect Budget measures and to enact, amend, and cancel various laws. The section that applies to commercial tenancies is Schedule 5 Commercial Tenancies Act (“Schedule 5”). Schedule 5 cancels and replaces Part IV of the Commercial Tenancies Act. This is the most recent Act to protect commercial tenants by extending the ban on commercial tenancy evictions.  Schedule 5 is in force until December 8, 2022, after which time, Part IV of the Commercial Tenancies Act is cancelled.

Basically, Schedule 5 deals with the “non-enforcement period”, which is the period during which eviction orders for unpaid rent cannot be enforced.

This temporary ban, preventing landlords from evicting commercial tenants who were eligible for the CECRA, originally ran from May 1, 2020 to October 30, 2020, but it was extended until January 31, 2021. If a landlord had evicted a commercial tenant who qualified for this temporary ban or seized its assets during that period, that landlord had to return any unsold goods and let the tenant back into the unit. 

If the landlord had already sold the goods, the landlord had to apply the money received for the sale of the tenant’s goods towards the tenant’s unpaid rent.  If the landlord has rented the unit to a new tenant, the landlord must pay money to the tenant to compensate the tenant.

There is another temporary ban on evictions.  This temporary ban prevents landlords from evicting tenants who have been approved for the Canada Emergency Rent Subsidy (CERS).

If a tenant, who is approved to receive the CERS, provides its landlord with proof that they have been approved to receive the CERS, that tenant cannot be evicted for a 12-week period from the date of approval.

If that tenant reapplied for a new CERS payment, the 12-week ban starts again from the date of the new CERS approval.  Tenants are required to provide their landlord with proof each time they receive a new approval.

The last possible date a CERS-approved tenant can be protected from being evicted is April 22, 2022.

The CERS ended effective October 23, 2021. You could continue to apply for the claim periods that were still open, but there were no new periods after claim period 14, which ended on October 23, 2021.

However, section 80(1)4. of Schedule 5 states that:

The landlord would have been eligible to receive assistance under the Canada Emergency Commercial Rent Assistance for small business program as described in paragraph 1 or 3 if applications under that program were being accepted. This paragraph applies only if applications to the Canada Emergency Commercial Rent Assistance for small businesses program are no longer being accepted or if assistance is no longer available under the program.

Thus, this subsection keeps Schedule 5 alive, even though the CECRA has ended.

Schedule 5 offers a number of protections:  It prevents a judge from ordering a writ of possession that is effective during the non-enforcement period that applies to a protected tenancy. This applies to an action or application that was started before, on, or after the applicable non-enforcement period began. A landlord cannot carry out a right of re-entry during the non-enforcement period. The landlord must compensate the tenant for the re-entry. Furthermore, the landlord must restore possession of the premises to the tenant, unless the tenant does not want to accept possession.  If the landlord is not able to restore possession of the premises to the tenant for any reason other than the tenant refusing to accept possession, the landlord must compensate the tenant for all damages experienced by the tenant because of the landlord’s inability to restore possession.

Not only is a landlord not allowed to seize any goods during the non-enforcement period, but the landlord must also return any goods or property that were seized for unpaid rent during the period beginning on October 31, 2020 and ending immediately before the day subsection 1 (1) of Schedule 5 to the Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 came into effect.

A landlord who disobeys, or does not comply with, any of the protections described above is legally responsible for any damages experienced by the tenant due to the landlord’s violation or non-compliance with any protections contained in Schedule 5.

As pointed out earlier, the protections provided by Schedule 5 are scheduled to end on December 8, 2022 when Part IV of the Commercial Tenancies Act is cancelled.

Please note these materials have been prepared for general information purposes only and do not constitute legal advice. Readers are advised to seek legal advice by contacting Frank Feldman* regarding any specific legal issues.

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