Do Tenants Have to Pay Rent During COVID-19

Tenant and Landlord Rights During COVID-19 Pandemic

Lots of questions are coming in from Tenants and Landlords. They want to know their rights and how to handle the COVID-19 pandemic. The number one question we hear is about whether or not Tenants have to pay rent.  In Toronto, there has been an uprising of Tenants refusing to pay rent.  This is quite simply not allowed.  While many Tenants believe that the owner of their property is wealthy with disposable income to invest in real estate, they’re wrong.  In many cases, real estate investors carry large loans against a primary residence or dip into retirement funds; risking their future on real estate. Without monthly rent, they use lines of credit to pay their mortgage, tax and insurance.  Many investors are out of pocket hundreds of dollars monthly even with monthly rent.

At the end of the day, there must be mutual respect and open lines of communication.

Are Tenants Obligated To Pay Rent?

Yes. Because there are no financial relief programs for rent, Tenants must pay rent just as Landlords must pay their mortgage.

What a Tenant can do for Relief if Experiencing Financial Hardship?

Tenants are obligated to pay rent payments but there may be options.  First, speak with your Landlord or Property Manager. Let them know your situation and discuss options.

Options for Landlords and Tenants to Consider

  • Utilizing Mortgage Payment DeferralsLandlords with mortgages can utilize payment deferrals. For instance, deferring a mortgage payment allows you to offer temporary relief to Tenants. This provides better cash flow but it’s not the same as waiving a payment.  Because deferred payments must be paid, and are typically added to the end of the mortgage, this option should only be used if necessary.  As a result of deferred payments, you’ll have additional interest charges.
  • Creative Payment Options: Tenants will often pre-pay last month’s rent, and we’ve used this payment in lieu of current rent or split it between multiple payments.  We recently reduced a Tenant’s next two months by 50% and used the deposit for the balance. As a result, the tenant had temporary relief and they agreed to replenish this at a later date.

    **Landlords are not required to do this and the arrangements for repayment of the deposit will be completely up to them.  While this provides a Tenant with support, it may result in increased subsequent rent to replenish deposit.

  • Utilize Government Subsidies and Financial Relief Programs: Relief is being provided by Federal and Provincial governments so Tenants and Landlords should utilize these programs and ease the stress.  Keep up with Canada’s COVID-19 Economic Response Plan.

More info on how to weather the pandemic can be found here. We hope this information helps you find a solution to your challenges and encourage you to reach out for help.  If you have more questions or would like additional information on this topic, please comment below or contact us directly.