On July 23, 2020, the Commercial Tenancies Protection Act (the “CTPA”) received Royal Assent, and took effect retroactively on March 17, 2020. This legislation applies to commercial lease agreements in effect on March 17, 2020 (the day Alberta declared a state of public health emergency), as well as commercial tenancy agreements made effective between March 17, 2020 and the day on which the state of public health emergency ends. The CTPA does not apply to residential tenancies or mobile home site tenancies.
The CTPA protects commercial tenants eligible for assistance under the Canada Emergency Commercial Rent Assistance program, but whose landlords have decided not to participate. It also protects tenants with rent less than $50,000 per month, gross revenues less than $20 million per year, and if one of the following situations applies:
1. The tenant has had to close their business as a result of public health orders; or
2. The tenant has had their business revenue decline by at least 25% or more as a result of the pandemic.
The purpose of the CTPA is to prevent landlords from giving a notice of default, distraining for rent, evicting a tenant, or from exercising their remedies under a commercial lease agreement between March 17, 2020 and the emergency end date for the following reasons, which are caused by the COVID-19 pandemic:
1. non-payment of rent or rental arrears;
2. the applicability of a force majeure (or act of God) clause; or
3. the breach of a continuous occupancy requirement.
Landlords are also prevented from charging late fees or penalties during this period, and from increasing rent. A landlord can still evict a tenant or terminate a lease agreement, but it cannot be for one of the reasons included in the list above. The CTPA contains a list of reasons for which a landlord can still evict a tenant or terminate a lease agreement, which relate to breaches of the lease agreement that are not caused by the COVID-19 pandemic (e.g. doing significant damage to the premises).
If a tenant is unable to meet their rent obligations as a result of COVID-19, the landlord and the tenant must enter into a payment plan for the payment of rent. This payment plan amends the lease agreement, and obligates tenants to pay the full amount of rent owed. In the event of a failure by the tenant to adhere to the payment plan, the landlord shall have all remedies available under the tenancy agreement.