To qualify, a property owner (or applicable economic beneficiary) must have indicated the property`s commercial rental income in tax returns for fiscal years 2018 and/or 2019. For landowners of newly constructed or newly acquired real estate, the property must have started generating income in 2020 and the landlord must have entered into a lease with a legitimate tenant on April 1, 2020 or before April 1, 2020. All homeowners must submit a copy of the rental list of the property which will be up to date from June 1, 2020. For applications filed before June 1, 2020, all you need is a copy of the property`s current rental list. The parties must have a tenancy agreement that must include a moratorium on evacuation and proof of the financial difficulties of the tenants in order to participate in the CECRA. In order to use the program as quickly as possible, eligible landlords/owners and tenants should begin discussing a lease agreement even before the application process begins on May 25, 2020. CMHC has provided a model rent reduction contract on its website. CECRA is granted to interest-free loans eligible to eligible commercial property owners (“property owners”) to cover 50% of the gross monthly rents payable by small contractors or subtenants (each a “concerned tenant”) who, in April, May and June 2020, is experiencing financial difficulties due to COVID-19. To obtain the loan, landlords must reduce the tenant`s rent by at least 75% for the corresponding three months, according to a rental agreement – a sample of the loan has now been made available by CMHC. The tenants concerned remain responsible for up to 25% of the rent.
CMHC, along with MCAP and First Canadian Title, will administer CECRA on behalf of the federal and provincial/territorial governments. The program is expected to be operational this month and will include an online application process, where parties will be required to submit certifications on eligibility conditions, a rent reduction lease and a forgivable loan contract. In Canada, there are two types of leases: contracting parties must have a lease agreement to reduce rent, including a moratorium on clearing and proof of the financial distress of tenants in order to participate in CECRA. CMHC has provided a model rent reduction contract on its website. In accordance with cmHC requirements, the owner or owner of a property must be a landlord with affected small contractors (including subtenants) and, in most cases, have indicated rental income on their personal or professional income returns for 2018 and/or 2019. There is an exception to the tax reporting requirement for new and recently icy constructions and acquisitions that were leased to a legitimate tenant on April 1, 2020 or before April 1, 2020. In addition, it must have entered into a lease for April, May and June 2020, as described above. Finally, the rental agreement (i) must include a moratorium on forced evictions during this period and (ii) a rental income tax return in accordance with the tenant`s certificate (see below). Since the first announcement, other details have been published and we have incorporated them into the discussion below. We will continue to update this information as further announcements are made.
The law does not apply if the lessor and tenant have participated, at any time, in the CECRA programme (with regard to commercial premises) or with respect to evictions or dismissals that took place before 16 June 2020 (the date on which the law was received at first reading). In addition, the law does not affect the remedies that a lessor may have under a lease agreement if a substantial, non-pandemic violation has occurred. Written and oral tenancy agreements define legal rights and obligations for both the landlord and the tenant. This is important because they can be mentioned in the event of a conflict between the two.