As the world is slowly inching towards reopening, the federal and provincial governments have finally put in place an important measure to counter the struggles the last few months have caused for Canadian businesses. As of May 25th, the Canada Mortgage and Housing Corporation (CMHC) began accepting applications for the new Canada Emergency Commercial Rent Assistance program (CECRA). The CECRA will provide forgivable loans to commercial property owners for the months of April, May and June, covering 50% of the tenant’s rent and leaving the remaining 50% to be split between landlord and tenant.
Earlier news regarding the CECRA indicated that the program would be available exclusively to landlords who had mortgaged their property, leaving mortgage-free property owners in the dark. As of the May 25th release from the CMHC, the CECRA will be available to all property owners, mortgaged or not; this is a significant and welcome development for our Canadian business owners.
The same conditions for tenant eligibility outlined in my previous posting will still apply: the tenant must not pay monthly rent exceeding $50,000 in gross nor generate more than $20 million in gross annual revenues, and must have temporarily ceased operations or have experienced a 70% decrease in pre-Covid-19 revenues.
As a condition to the program, both the landlord and tenant must enter into a rent-reduction agreement, and both parties will be required to make attestations with regard to their respective eligibilities. The CMHC has provided sample agreements and attestations for applicants to use; these will, however, need to be tailored to your particular lease.
We would encourage you to contact us if you require assistance with your application to the CECRA; hopefully this measure will provide some much needed respite in these difficult times.
by: Martin Robertson -
posted on: June 8, 2020