So What Should Landlords And Property Managers Be Doing Right Now?



By: Shana Nodel J.D., Principal Lawyer


As a Litigation Lawyer who frequently acts on behalf of landlords and property management businesses, I am fully aware that the post COVID-19 economy is going to be a very different business landscape; that will in turn translate to a unique legal climate. In the world of law, the contracts we rely upon are important. That being said, there is likely to be an influx of unique litigation surrounding the wording of contracts, questions around force majeure, business interruption insurance and frustration of contract. It will be interesting to see what position the Courts take as time commences and questions surrounding these issues are put in front of Judges. The COVID-19 Pandemic is affecting everyone around the world. There is not a single industry that is not impacted or forced to navigate these uncharted waters and commercial landlords and property managers are no exception. Commercial landlords and property managers are not only concerned with their tenants' ability to pay rent but landlords, for their part, have operating costs to juggle. As a landlord or property manager, you are likely already aware that on April 16, 2020 Prime Minister Justin Trudeau announced that his government was expanding its fiscal rescue plan and would be introducing The Canada Emergency Commercial Rent Assistance Program. On April 23,2020 further details about the program were unveiled. The program is aimed to assist small and medium size businesses for the months of April-June who pay less than $50,000 per month in rent, have had to temporarily cease operations, or have experienced at least a 70 per cent drop in pre COVID-19 revenues. A key detail for business owners is that this rent relief is off of base rent and not net or total rent costs and for some businesses that will still require them to pay a sizeable bill every month. https://pm.gc.ca/en/news/news-releases/2020/04/24/prime-minister-announces-partnerships-provinces-and-territories While final terms about the program are still being ironed out, the government has explicitly come out and urged landlords to "provide flexibility". What this means for a landlord or a property manager will vary. Simply put - it's not "business as usual" for anyone. While both parties to a commercial lease could take a strictly legal approach to their relationship the question becomes whether this is the most optimal outcome or rather should both parties work together and take a longer view of the leasehold arrangement. While landlords prefer to have their space rented with zero vacancy, tenants for their part want nothing more than to get back to business and return to their office premises which were forced to close. It is my opinion that collaboration will dominate in the post COVID-19 world. I would recommend that everyone, in particular, all landlords and property managers be proactive by surrounding themselves with the trusted advisors across all industries that they have come to rely on. I want nothing more to see everyone succeed on the other side of this pandemic.

Stay healthy and safe.


Shana

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