Commercial relations between tenants and property owners in the time of COVID-19: a real puzzle!

May 2020

Commercial relations between tenants and property owners in the time of COVID-19: a real puzzle!

Steffi Georges
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514.878.3295

Since the shutdown of non-essential businesses, the vast majority of Québec businesses are experiencing a drastic drop in their sales, directly affecting their ability to pay their rent and possibly resulting in late payment penalties for non-payment or even resiliation of the commercial lease.

Many tenants argue that they should not have to pay rent for commercial space from which they cannot benefit or accuse their property owner of not fulfilling their obligation to provide for the use and enjoyment of the leased premises. In response, property owners claim they are entitled to collect the rent since they are not responsible for the closure of the leased premises, and that COVID-19 should be blamed instead. Who is right?

In all cases, the first step is to consult the commercial lease currently in effect to verify each parties' rights and obligations, since the arguments to be made, for both tenant and property owner, will depend on the terms of the lease.

In these trying times, we are available to assist you in engaging in discussions and negotiations to ensure your commercial relationship protection and to obtain concessions that are favourable to you. Furthermore, we are keeping abreast of the latest measures announced by the federal government, including Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. To fully understand the terms and conditions of the announced measures, we invite you to contact us. We can guide you through the process of applying for the amounts to which you may be entitled.

This bulletin provides general comments on recent developments in the law. It does not constitute and should not be viewed as legal advice. No legal action should be taken on the basis of the information contained herein.

 

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