The Covid-19 pandemic is a global crisis that is literally affecting everyone right now. This is not a time to panic though because this is a short-term situation that will eventually resolve. Hire the right professionals to get you through this time if you are facing difficulties (especially if you need to file any forms).

Disclaimer: These are guidelines only. Each situation is unique so if you have a tenant that has not paid their rent or paid a portion of their rent, reach out to us for professional advice specific to your case.

1) Be A Good Person

Do everything in your power to work with your tenants during this difficult situation; we are all in this together. This is not a time to be greedy and appreciate that your tenants may have lost their job, may have no savings and may even be dealing with own health issues. Also be aware that there is a high-level of anxiety of what will happen in the future and people are scared.

2) Direct Them To Benefit Programs

Government benefit programs have already started paying out and virtually everyone that has applied is being accepted. Direct your tenants to apply for all benefit programs they may qualify for:

https://www.canada.ca/en/department-finance/economic-response-plan.html#individuals

• Canada Emergency Response Benefit

• Salary Top-Ups for Low-Income Essential Workers

• Childcare Cost Benefit

• Special Goods and Services Tax credit Payment

There are many other programs available and you may have to help your tenant navigate the system – talk to your tenants to find out what their unique situation is.

3) Put Them On A Payment Plan

Tenants legally owe all of their rent as per your original lease agreement. There is no such thing as a “rent holiday” or just simply not paying their rent. If your tenant can’t pay (or are refusing to), work out a payment plan with them to pay however much they can afford now and how the outstanding balance will be repaid. Each situation is different and there isn’t a one-sized-fits-all-solution but anything is possible as long as both sides agree. And yes, tenants can use their last month’s rent deposit to pay rent now but be sure to document that they are doing this and no longer have a last month’s rent deposit.

4) Get It In Writing

DOCUMENT EVERYTHING YOU AGREE TO WITH YOUR TENANT IN WRITING. This is critical!!  “Writing” means a physical piece of paper that is delivered to them unless they have agreed to accept electronic correspondence. Text messages do not count! Follow up any phone conversations with a written summary of what was agreed to and be sure to distribute copies to all parties involved. Get signatures on all agreement (this can be e-signatures using services like DocuSign).

5) File Your N4 (Notice to End a Tenancy Early for Non-payment of Rent)

If you haven’t received the full rental payments, file an N4 form right away as a precautionary measure. Explain to the tenant what you are doing and reassure them that you will be working with them but that you need to protect your rights and investment. Filing an N4 needs to be done properly and according to specific timelines so seek expert help.

6) Defer your Mortgage Payment

If you can’t cover your mortgage payments, call your financial institution to see if you can defer your mortgage. Some mortgages already include deferral privileges that you can take advantage of. Currently interest is being charged on any deferred payments by financial institutions but this may change in the future and is better than defaulting on your mortgage. Deferring a mortgage payment may affect your credit rating but there is already talk that credit reports will be updated so that mortgage deferrals do not affect your score.

7) Do Not Sell

Now is not the time to be selling your investment property because many buildings are not even allowing showings due to physical distancing concerns. We expect buyers to come back to the market in 2-3 weeks but many will be bargain shopping and prices will bounce back in the next 6-12 months once the situation normalizes. We see prices resetting back to December 2019 levels (a drop of 5-10%) but we do not expect a significant drop or “crash”.

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