BILL 229 - BAN ON COMMERCIAL TENANCY EVICTIONS EXTENDED IN ONTARIO

The Ontario Government has passed several pieces of legislation halting or reversing evictions of commercial tenants and protecting them from being locked out or having their assets seized during the COVID-19 pandemic. Most recently, on December 8, 2020, Bill 229, Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 received Royal Assent and was passed into law by the Ontario Government.

Bill 229 implemented several notable changes to the Commercial Tenancies Act, 1990. Notably, Sections 81, 82 and 84 of the Commercial Tenancies Act, 1990 now state as follows:

• Eviction orders for rent arrears not effective during the non-enforcement period81(1) Despite anything in this or any other Act, a judge shall not order a writ of possession that is effective during the non-enforcement period that applies in respect of a tenancy referred to in subsection 80 (1) or (2) if the basis for ordering the writ is an arrears of rent.
• No re-entry during the non-enforcement period82 No landlord shall exercise a right of re-entry in respect of a tenancy referred to in subsection 80 (1) or (2) during the applicable non-enforcement period.
• No distress during the non-enforcement period84 No landlord shall, during the applicable non-enforcement period, seize any goods or chattels as a distress for arrears of rent in respect of a tenancy referred to in subsection 80 (1) or (2).

What this means is that during a non-enforcement period, judges are prohibited from issuing eviction orders for non-payment of rent, and landlords are prohibited from re-entering and terminating leases due to any type of default by the tenant and from distraining on the goods of a tenant. These new restrictions may provide relief to some commercial tenants struggling to pay rent, and significantly limit a commercial landlord’s rights upon a tenant’s breach or non-compliance with a lease.

There are two possible non-enforcement periods that may apply pursuant to the Regulations (O. Reg 763/20). The first non-enforcement period expired on January 31, 2021 (45 days after Regulation came into force) and applies to a tenancy in respect of which the landlord satisfies any of the following criteria:

• The landlord is or was eligible to receive assistance under the Canada Emergency Commercial Rent Assistance for small businesses program.
• The landlord is receiving or has received assistance under the Canada Emergency Commercial Rent Assistance for small businesses program.
• The landlord would be eligible to receive assistance under the Canada Emergency Commercial Rent Assistance for small businesses program if the landlord entered into a rent reduction agreement with the tenant containing a moratorium on eviction.
• The landlord would have been eligible to receive assistance under the Canada Emergency Commercial Rent Assistance for small businesses 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.

The second non-enforcement period that may apply began on December 17, 2020 and ends on April 22, 2022 and applies to tenancies that meet the following criteria:

• The tenant has been approved to receive the Canada Emergency Rent Subsidy.
• The tenant has provided proof of the approval referred to in paragraph 1 to their landlord.
• Not more than 12 weeks have passed since the day the tenant was approved.

Based on these new changes, many commercial tenancies in Ontario may fall under the second non-enforcement period applies and therefore commercial landlords will not be able to exercise their rights of eviction, re-entry, or distress until April 22, 2022.

THE LAWYERS AT CHAND & CO. UNDERSTAND COMMERCIAL TENANCIES

The lawyers at Chand & Co. can assist commercial landlords and tenants in even the most difficult of tenancy disputes. Our lawyers can also assist and guide landlords and tenants through the legal process when a tenancy dispute arises.

Often times, there is opportunity to negotiate arrangements with creditors to ensure that the landlord is able to obtain some relief for unpaid rent without recourse by either party to the courts. At other times, parties will require an expert litigator, like those at Chand & Co., to enforce their rights when disputes can not be resolved between the parties. Whether negotiations or litigation is anticipated, commercial landlords and tenants can trust our firm to understand their needs and protect and further their rights.