We've never seen anything like this. Not even remotely.

A state of emergency. All non-essential businesses closing. Hundreds of thousands of people working from home or already out of work.

The past few weeks in Ontario have been nearly impossible to believe. Every day another update, another extension of the COVID-19 crisis, another financial promise or accommodation.

So why would paying rent be any different?


At a time when mortgage deferrals and slashed rates are available for homeowners, why would anyone expect that a province currently having its economy brought to its knees would be filled with renters who will still be able to ante up their rent payments on April 1?

It simply, and quite literally, doesn't add up.

Combine this with the recent suspension of all evictions in the province, and landlords throughout Ontario will have little, if any, recourse once a tenant does not pay their monthly rent. The Landlord and Tenant Board is closed until further notice and is not hearing any cases related to eviction while the COVID-19 outbreak continues. Even in a relatively smooth scenario, it can already take months or even a year for an Ontario landlord to properly evict a tenant. And the current situation is far from smooth.

In short, while the governments in this country have addressed a lot of new issues arising from the current pandemic, they have failed to so far properly inform and or reassure landlords and businesses that they're own mortgages and loss of income will be protected to some degree. And while there are a great deal of people who now find themselves unable to pay rent in the coming months (and this number will likely only grow moving forward), there are surely a subset of renters who will also simply take advantage of not having to pay rent without any consequences.

It's no wonder then, that an online petition to "Cancel rent and mortgage payments during Covid-19" has earned over 630,000 signatures in just its first week.

As a paralegal, and former adjudicator of the Landlord and Tenant Board of Ontario, Harry Fine broke down in a video yesterday, there's simply not much anyone can do for small landlords right now; "There is no answer right now."

Speaking with Robert Klopot, CEO of luxury property management company The Forest Hill Group, it's clear that there are simply too many unknowns right now. The difference between one or two months of missed rent or maintenance fees and five or six months missed is massive. And no one can be sure what COVID-19 will result in. "If the financial health of your 'community' is positive this will likely only be a hiccup," says Klopot. But many renters in Toronto would have no idea how their buildings are faring financially - they've simply been paying rent and hoping for the best. Only the COVID-19 outbreak has ensured that at best seems all but impossible to hope for now.

Of course, even if a landlord has a mortgage fee deferred for several months, there's still the question of maintenance fees at condos to ensure the upkeep and continued health and safety measures are taken care of.

An average approximation for the cost of maintenance fees at a downtown Toronto condo is $0.80 per sq. ft. So, a 600-sq. ft. condo is looking at about $400 a month in fees. Multiply that by the number of units that may not be able to afford to pay the monthly fees and you can quickly see a crisis forming in some buildings even if a plan for rent has been formed.

Klopot suggests it's still too early to know what the level of repercussions we're looking at might be. April 15 seems like a better check-in date to him, as it will allow enough time for people to not pay rent, for cheques to bounce, and for property investors to make clear where they're going to stand on this when the dust begins to settle.

Of course, April 15 is just three weeks away. So whatever way this goes, we won't have too long to find out. One thing's for sure, however: rent is never free. And someone, at some point, is going to have to pay up.

Real Estate