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Jun 25, 2020

Ontario Government Bans Commercial Evictions in Ontario: What Bill 192 Means to Landlords and Tenants

By Kenneth Pimentel, Monty Warsh, Marco Gammone and Faruk Gafic

Bill 192 (Protecting Small Business Act, 2020), which received Royal Assent on June 18, 2020, amends certain provisions of the Commercial Tenancies Act. The amendments are temporary in nature and are intended to limit enforcement action by landlords during the COVID-19 pandemic.

The key elements of Bill 192 are as follows:

  • Landlords that: (i) are eligible to receive assistance under the Canada Emergency Commercial Rent Assistance Program (“CECRA”); or (ii) would be eligible to receive assistance under CECRA if they entered into a rent reduction agreement with their tenants containing a moratorium on eviction, are prohibited from doing any of the following during the “non-enforcement period”:
    • exercising any right of re-entry (Bill 192 does not narrow the scope of this limitation to defaults in the payment of rent and extends to both monetary and non-monetary defaults by a tenant); and
    • seizing any goods or chattels of a tenant by way of distraint to recover arrears of rent,

    except where the right of re-entry or distraint was exercised after the landlord was approved for assistance under CECRA, in which case the rent reduction agreement would apply.

  • The “non-enforcement period” is defined as commencing on the date that the amendments contained in Bill 192 come into force (being June 18, 2020, the date that Bill 192 received Royal Assent) and ending on the date that they are repealed.
  • Judges are prohibited from granting writs of possession that are effective during the non-enforcement period in respect of leases captured by the eviction prohibition and which relate to arrears of rent, except where the court action or application was commenced after the landlord was approved to receive assistance under CECRA.
  • The prohibition on terminations and distraints is retroactive to May 1, 2020.
  • If a landlord terminated a lease between May 1, 2020 and June 17, 2020, it is required to:
    • restore possession of the premises to the tenant (unless the tenant refuses to retake possession); or
    • if possession of the premises cannot be restored (other than by reason of the tenant’s refusal to accept possession), compensate the tenant for all damages arising from the landlord’s inability to reinstate possession.
  • If the landlord distrained against a tenant’s property for arrears of rent between May 1, 2020 and June 17, 2020, the landlord is required, as soon as reasonably possible, to return to the tenant all goods and chattels that are unsold as of the day that the amendments come into force.
  • If a landlord fails to comply with the foregoing, it is liable for any damages sustained by the tenant as a result of such non-compliance or contravention.

Bill 192 appears to be an attempt by the Ontario government to create an incentive for landlords to apply for CECRA on behalf of their small business tenants. However, it is not clear how much the prohibition on enforcement action by landlords will do to encourage more landlords to opt into the CECRA program if they have not already decided to apply.

Our Commercial Leasing Group will continue to monitor developments and any new information that may arise in connection with CECRA. We are always available to assist landlords and tenants in navigating successful completion of relief under CECRA and to help overcome the hurdles presented by COVID-19. We are committed to keeping clients informed on matters pertaining to commercial leasing, including providing continued updates on interpreting CECRA.

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