Rent, Evictions and other COVID-19 Related Information
This is an unprecedented time for us all and being an investor, it can be unnerving when you are unsure about how this will affect your investments when it comes to rent payments, mortgage payments, the real estate market and your over all investment.
Mortgage Deferral
I have seen an alarming amount of tenants claiming they will refuse to pay rent simply because “Landlords do not have to pay their mortgage.” Many tenants seem to be misinformed on what a mortgage deferral actually is and how it works. As many of us know, several banks are offering a mortgage deferral up to 6 months but this does not mean Landlords do not have to pay their mortgage. Depending on your lender and tenant rent payments, you may not even qualify for a deferral. At the end of the deferral, you will have to resume payment. In addition, the interest that hasn’t been paid during the referral period continues to be added to the outstanding principal of your mortgage. In the end, this can increase the total amount you owe after the deferral.
Bank of Montreal, CIBC, TD Canada, National Bank of Canada, RBC Royal Bank, Scotiabank and Sudbury Credit Union are some of the lenders participating in mortgage deferrals. If you feel you are unable to pay your mortgage, please, contact your lender as soon as possible. CMHC offers some explanation on mortgage deferrals if you are still unsure if a mortgage deferral is right for your situation. Read more here.
Evictions
There are Canadians across the country who have lost their jobs because of the COVID-19 pandemic and are struggling financially. Ontario has ordered to stop all eviction during this state of emergency because no one should lose their home during a pandemic.
The changes made by the Landlord and Tenant Board are as follows:
Landlords can still give eviction notices, however, landlords are encouraged to work with tenants to establish fair arrangements to keep tenants in their homes, including deferring rent or other payment arrangements.
Landlord and Tenant Board counter services are closed, but the most common types of applications can still be filed online..
All hearings related to eviction applications are suspended until further notice, except for urgent disputes such as those involving illegal acts or serious safety concerns.
No new eviction orders will be issued until further notice, unless the matter relates to an urgent issue such as an illegal act or serious safety concerns.
Enforcement of residential eviction orders is suspended until further notice. By order of the Superior Court of Justice, enforcement of eviction orders is suspended during the suspension of regular court operations, unless the court orders otherwise.
Rent
According to Ontario.ca:
“Tenants who can pay their rent must do so, to the best of their abilities. Landlords are entitled to collect compensation from a tenant for each day that an eviction order is not enforced.”
It is wrong for a tenant to withhold rent to a Landlord if their income is not affected by this pandemic. That being said, it is my opinion that Landlords should try their best to work with their Tenants that are unable to make a full rent payment due to COVID-19.
Whether partial payment is collected, a payment plan is put in place or rent is paid upon the tenant receiving financial assistance through EI, CERB or other financial assistance, it is imperative to try to work together. Communicate with your tenants and come up with a plan.
Reduced Electricity Rates
The Government of Ontario issued an Emergency Order under the Emergency Management and Civil Protection Act. As a result, starting on March 24, 2020, residential and small business customers on time-of-use (TOU) pricing will pay 10.1 ¢/kWh no matter what time of day the electricity is consumed.
This means that TOU customers will be paying the off-peak price throughout the day as long as the Emergency Order remains in place. The Government has indicated that it intends to keep the 10.1 ¢/kWh pricing in place for 45 days.
The 10.1 ¢/kWh pricing applies automatically – no customer action is
required.
Read the press release here.
Sudbury Property Taxes
Late payments for the April 2 tax due date will not incur interest or late payment penalties until June 4, 2020.
Property owners enrolled in the pre-authorized tax payment plan who feel they may have difficulty meeting the payment, due to the COVID-19 pandemic, can contact the office at 705-674-4455 ext. 2601 to review available options.
See more here.
Income Tax Due Date Extension
In order to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak, the Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals, including certain trusts. For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020. However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.
For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
Allowing tenants to be secure in their home is the right thing to do however, small-scale investors are very vulnerable to financial hardship in this situation if tenants withhold rent. No one can accurately predict how long this State of Emergency will last, it is in everyone’s best interest to work together.
There is financial assistance available for both landlords and tenants during this crisis. Click here to read more.