Ontario-Canada Emergency Commercial Rent Assistance (CECRA)
UPDATE on the Commercial Rent Assistance (CECRA).
The Ontario Government is committing $241 million to partner with the federal government and deliver more than $900 million in urgent relief to small businesses and their landlords through a new program, the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA).
The OCECRA will provide forgivable loans to eligible commercial property owners experiencing potential rent shortfalls because their small business tenants have been heavily impacted by the COVID-19 crisis.
How long would a commercial property owner have to apply for OCECRA?
The OCECRA would be administered by the Canada Mortgage and Housing Corporation (CMHC) and would be available until September 30, 2020. Support would be retroactive to April 1, covering April, May and June 2020.
Are there any eligibility requirements for commercial property owners?
The OCECRA would apply to commercial properties with small business tenants.
Commercial properties with a residential component, and residential mixed-use properties with a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants.
The property owner must be the registered owner and landlord of the residential or commercial real estate property.
If a property owner does not have a mortgage secured by a commercial rental property, the property owner should contact CMHC to discuss program options, which may include applying funds against other forms of debt facilities or fixed cost payment obligations (e.g. utilities).
What are the eligibility requirements for small businesses?
An eligible small business tenant is one that:
- Pays monthly rent not exceeding $50,000 in gross rent payments; and is,
- A non-essential small business that has temporarily closed, or who is experiencing a 70 per cent drop in pre-COVID-19 revenues (determined by comparing revenues in April, May or June to the same month in 2019 or alternatively compared to average revenues for January and February 2020).
Not-for-profit organizations and charitable entities would also be considered for the program.
Are commercial properties that also have apartments eligible as well?
Commercial properties with a residential component, and residential mixed-use properties that have a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants only.
Program Highlights as follows:
- They will “lower rent by 75% for small businesses that have been strongly affected by COVID-19 for April, May and June 2020”
- The government will cover 50% of that reduction and the property owner will cover the rest
- If you are a small business that has been strongly affected by COVID-19 and you were paying less than $50,000 per month on rent you will be eligible to receive the support
- They will also be there for nonprofits and charitable organizations that are struggling right now
- There will be more coming in the following days for rent support for larger businesses
- There is now an agreement with all provinces and territories. “Allowing renters to pay only 25% of their rent for April, May and June. From the 75% that they won’t pay, the owner will absorb 25% and the Federal Government and the Provinces will take the 50% remaining.
Implementation of the program will require a partnership with provincial and territorial governments who are responsible for property owner-tenant relationships.
More details about the Commercial Rent Assistance program to be available in the coming hours and days.
News source: https://news.ontario.ca/opo/en/2020/4/ontario-canada-emergency-commercial-rent-assistance-program.html
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