REAL ESTATE AND COVID 19: Frequently Asked Questions

As some jobs come to a halt, businesses reduce their services or close their doors, and the courts postpone all non-urgent proceedings until June, it’s no wonder there’s been an incredible influx of questions when it comes to real estate.

While we are all going through uncertain times, and we can’t guarantee what we’ll happen in the future, here are some of the most pertinent questions regarding real estate. Keep in mind, everyone’s circumstances may be different, and the following is general information that might be helpful but shouldn’t automatically be considered legal advice for your own circumstance.

 

Do tenants still have to pay rent?

Yes, tenants are still obligated under their tenancy to pay the landlord. While times may be more difficult during these times, given the slowdown of business and employment, the rent remains due.

We recommend tenants actively seek out what kind of financial assistance they can apply to for help. Rent can still stack up and create a snowballing debt down the line. Failing to pay rent could have negative consequences for all parties – including the tenant, landlord and the general economy.

Can evictions and enforcement procedures be scheduled?

At the moment Landlord and Tenant Tribunal matters are on pause until June. This means that while a claim may be validly made by a landlord, it will be hard to enforce until a solution to the tribunal and other court proceedings are made. Note, this is not stopping or limiting the landlord’s ability to collect or initiate a claim later.

How can I be proactive?

As a landlord we encourage contacting mortgage companies to discuss deferrals of payments, if needed, and working with tenants towards payment plans and solutions. While some lenders are deferring payments, each lender has its own standards for doing so and it’s important to note that the additional interest will be payable later. There is no interest forgiveness under these programs as it stands, and measures should be taken to avoid incurring unreasonable or costly decisions.

What about if I haven’t yet closed my current real estate deal?

Technology has been permitting the continuous closing of real estate deals so far. You may continue to work with mortgage brokers or banks to access funding for current transactions, and lawyers are working remotely and using various tech platforms to ensure transactions can be closed.

If you have an upcoming deal, it’s prudent to chat with your lawyer about what steps will be taken to close your deal using alternative measures.

Given that measures are still available to close deals, the same contractual obligations apply.

What if I can’t close my deal because of financing or my mortgage being revoked?

Losing employment and being unable to financially complete a current real estate transaction puts the buyer in breach of contract. With such unprecedented times, it’s unclear how the courts will respond to the corona virus pandemic and what responsibilities will be on each party. What we do know, however, is that the government is actively putting in place measures to assist individuals financially, and each circumstance will be looked at individually for insight on whether the breach could have been avoided.

 

These are some of the most frequently asked questions being posed today, and as time unfolds, we will likely see more questions (and more solutions!) develop. It’s important to keep being as responsible as we can be, both as landlord and tenants, to uphold our responsibilities and obligations as best we can, while appreciating the urgency to assist in public health measures.

We’ll continue to monitor the circumstances and keep you informed as we do!