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Crisis to Recovery
Navigating the way in a COVID-19 world
CRISIS TO RECOVERY
By Erin Ruddy
The rapid spread of the COVID-19 virus that shuttered most of the world in March, closing borders and businesses and causing unparalleled hardship for the majority of Canadians, continues to create upheaval on the economy. As worldwide state of emergencies persist, and extraordinary measures are enacted by governments to keep businesses afloat while striving to “flatten the curve”, the future at this juncture remains uncertain.
What is clear, however, is that apartment owners and managers have been impacted in unique ways given apartment residents are confined to their homes. Along with a heightened risk of exposure to the virus, threats of building-wide quarantines, and enhanced, hyper-vigilant cleaning measures, calls for rent freezes in late-March by tenant advocacy groups had (and still have) many landlords fearing the worst.
Robert Gentile, President of Quinte Region Landlords Association, said he worried about what would happen if tenants, landlords and policy-makers didn’t work collaboratively to ensure financial safety nets were put in place so that rents get paid throughout the crisis.
“Small landlords rely on their rents to pay their bills, the largest ones being mortgages, taxes, and utilities,” he said. “While some landlords, but not all, may be granted deferrals on some bills, they will still have to be paid in the end. So it is not realistic for rents to simply be waived without government financial assistance.”
Making matters worse, tenant groups launched a campaign in the lead up to April 1st to dissuade renters from paying their rent, calling for “rent breaks” and other measures to protect the renting public. Since several provinces had placed a moratorium on evictions, the ramifications of this loss of income had some smaller landlords fearing bankruptcy.
Fortunately, some positive news was issued on March 25th when the federal government introduced the Canada Emergency Response Benefit (CERB). Intended to quickly direct income support payments to Canadians whose incomes had been lost or severely reduced because of COVID-19, qualifying individuals could receive monthly payments of $2,000 for the duration of the crisis.
Joe Hoffer, Partner, Cohen Highley LLP Lawyers said he was optimistic about the program and its potential to provide some financial relief: “It means that many of the rent defaults landlords may experience on their April rent rolls could be resolved before the end of April and could stay resolved for at least four months.”
Since the crisis began, Hoffer’s advice to landlords has been to work with tenants facing COVID-related income loss to come up with repayment plans unique to them. “Landlords are entitled to see some verification from tenants to support the claim of loss of income and its connection to COVID-19,” he said. “If the landlord is satisfied with that verification, then there is a good chance that the CERB program will supply funds to meet the tenant’s housing needs and avoid ongoing rent defaults.”
He also advised landlords to “get really familiar” with CERB and other government assistance programs, recommending that they work with eligible tenants to incorporate the funds sourced from these programs into tenant repayment agreements. Of course, not all tenants would be willing to cooperate—in which case Hoffer said landlords should issue the N4 and follow up with an eviction application as leverage to recover a judgment or repayment of arrears.
But, as April unfolds into May, just how many tenants are making use of CERB and other government programs to fulfill their rent obligations? This is something we’ll be looking into and reporting back on at REMInetwork.ca. Hoffer’s hope, in the meantime, is that that the program will provide a lifeline for tenants and relief for landlords struggling to maintain operations throughout this very challenging time.
— Kris Boyce
Sanitation, communication and preparedness With the COVID-19 crisis well underway, it goes without saying that maintaining a clean, sanitized building will only help to reduce the spread of this highly communicable disease. But this applies to all germs and not just the novel coronavirus. Common areas, communal surfaces, lobby door handles and elevator buttons should be cleaned regularly with hypervigilance to prevent the transmission of illness.
In mid-March, we reached out to Kris Boyce, CEO of Greenwin, about the importance of sanitation, communication and preparedness during these exceptional times.
“At Greenwin, we care deeply about our employees, our communities and our residents, and take the COVID-19 situation very seriously,” she said. “Right now, our focus is on ensuring they have the information, resources and support they need to stay healthy and safe. At this point we are fortunate in that there has not yet been a confirmed case of COVID-19 in any of our buildings, but in the event that this happens we are confident in our level of preparedness.”
In addition to bolstering its cleaning protocols, Boyce said Greenwin promptly enacted several measures to limit exposure, including the distribution of first-line-of-defense health tips, the temporary closure of amenity spaces, restricting access to management and leasing offices, and deferring all non-essential maintenance across all of its properties.
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“From the onset of the outbreak, we’ve strived to be proactive and flexible with our response,” she said. “With circumstances changing on a day-to-day basis, we are committed to closely monitoring the situation and putting protocols in place that align to the best practices recommended by Canadian health authorities.”
For its part, the Federation of Rental Housing Providers of Ontario (FRPO) maintained regular communication with its members, offering continued updates and valuable best practices for reducing the spread of the disease. The association’s advice to landlords was—and continues to be—to keep tenants well-apprised and informed as part of their crisis management, advising that all notices be posted at building entrances, on tenant notification boards and in common areas as promptly as possible.
FRPO also offered important tips on what to do if (and when) COVID-19 infiltrates a rental property, instructing management to contact local public health authorities and follow their medical directions with due diligence. But given strict privacy laws, it also warned landlords not to identify by name anyone in the building who’s been infected, reminding housing providers that it’s the role of public health authorities to reach out to any other tenants who may have come into contact with that individual.
Informing stakeholders; staff In the wake of the state of emergency announcement, most property managers issued special statements outlining the action steps they’d taken in response to the COVID-19 pandemic, Killam Apartment REIT being among them.
For residents, Killam’s plan included: an increase in frequency and thoroughness of cleaning practices throughout all properties; the closure of amenity spaces to assist with social distancing; a ban on evictions for residents unable to make payments due to financial hardship caused by COVID-19; and a commitment to working with those tenants facing financial hardship to find flexible payment solutions on a case-by-case basis.
In addition, Killam said it would be waiving the collection of recent rental increases and would suspend collection of further rental increases during the state of emergency, beginning with the April 1, 2020 rent payment.
In terms of action steps aimed at protecting and supporting employees, Killam said it is providing continued assistance in a variety of ways, including limiting site staff to reduce exposure, and offering paid time-off for any employee required to selfisolate or who becomes ill.
A progressing story Here at Canadian Apartment, our goal is to keep readers up to date with timely, relevant news specific to the rental housing industry. As we navigate the way forward in these uncertain times, we are confident Canada’s rental housing community is taking the best steps it can to ensure the health and safety of residents and employees. For ongoing, daily coverage of the industry’s response to COVID-19, please follow us at: www.REMInetwork.com
