If you’re a landlord or tenant, you have plenty on your plate right now. As a tenant, you’re asking yourself: Do I have to pay rent? Does the coronavirus pandemic mean that my landlord has to give me a break? If you’re a landlord, you’re asking: Do I have to give my tenants a break? Does my Lease Agreement or the law allow them to stop paying, to have a rent holiday?

Basically, both landlords and tenants are asking one of two questions, if not both:

  • Does my lease agreement allow for the non-payment of rent in these circumstances?
  • Does the law allow for the non-payment of rent in these circumstances?

What the Lease Agreement says about a rent holiday?

The first question to ask is: Do you have a Lease Agreement in place?

If the answer is yes, then let’s talk about that Lease Agreement. The Lease Agreement is the first and best place to find out what rights the landlord and tenant have. There are two key clauses you can look at:

  • The force majeure clause, which allows both the landlord and tenant to suspend or terminate the agreement, and avoid fulfilling certain obligations (such as the obligation to pay rent). The force majeure clause only applies in cases where there are circumstances beyond the parties’ control, and which prevent them from fulfilling their obligations.
  • The other clause is the payment clause. In that clause, you’ll be looking for any wording that empowers the tenant to stop paying rent (a rent holiday of sorts) or to receive some sort of discount on the rent they normally pay in certain circumstances.

You can also read more on what we have to say about how to manage contracts in this time.

To pay rent or not to pay rent, that is the question.

What does the law say about not paying rent?

Here are the questions to ask are the following:

  • Are there any special regulations that the government has issued? The government has issued various regulations or guidelines to not only curb the spread of the virus, but to ease the burden on the economy. Are there any that apply to Leases and allow tenants not to pay rent?
  • Does the Rental Housing Act say anything?
  • Does the Consumer Protection Act apply to your Lease Agreement?
  • If so, do any of its provisions afford a tenant a rent holiday?

Is there any other way to not pay rent?

Many landlords and tenants are constantly in talks about how to deal with the situation we find ourselves in. A good-faith conversation should be one of the options that you consider. You can reach an understanding with your landlord or tenant that, regardless of what your contract or the law allows, one of the following will apply to your relationship:

  • No rent will be due at all for a certain period;
  • No rent will be due until the end of the lease period, and then the deposit amount will go towards covering the outstanding rent; or
  • There’ll be a discount on the rent for a certain period.

Actions you can take

  • Know what you agreed would happen in these circumstances by asking us to interpret your Lease Agreement for you. We have a lot of experience drafting and reviewing residential lease agreements and commercial lease agreements.
  • Resolve a dispute or find a way forward by asking us to conduct an online mediation for you.
  • Keep up-to-date with the latest legal developments by subscribing to our newsletter. There’s always a possibility that government might intervene and try to relieve the situation.

Interested?

If you are interested, please complete the form on the right or enquire now. We will contact you to find out more about your requirements and give you a quote.