17 April 2020
The following is intended as a general summary of Residential Tenancy Law with respect to Alberta during the COVID 19 crisis. This is not a replacement for legal advice tailored to your specific case. Please consult a lawyer if your matter requires professional advice. If you have questions please contact the writer of this article (Kelly le Vann) at Johnston Ming Manning LLP, 403-346-5591.
The recent COVID 19 pandemic in Alberta has caused significant financial impact for both Landlords and Tenants in the Residential context. The pandemic has also led to a series of Ministerial Orders which have changed the nature of Landlord/Tenant proceedings (at least for now). This article is organized as follows:
- Changes to the Law
- Advice for Landlords
- Advice for Tenants
Changes to the Law
No Fees or Penalties for Late Payments
A Landlord is not permitted to charge any fee or late penalty for late or non-payment of rent by tenants between April 1, 2020 and June 30, 2020.
No New or Pre-Existing Rent Increases
The effect of any new or previously scheduled rent increases is suspended beginning on March 17, 2020 and ending on August 14, 2020 or termination of the Order.
This means that if the Landlord sent notice of the rental increase before March 17, 2020 for an increase to take place after March 17, 2020, that rent increase will not take effect until August 15, 2020. For clarity this order does not prevent a Landlord from raising rent, but it does prevent the increase from taking place until after August 14, 2020. This Order also has no effect on rental increase which took place before the Order commenced.
No Evictions in April 2020 for Non-Payment of Rent
The authority for a civil enforcement agency to enforce an eviction order is suspended until April 30, 2020 provided that the eviction is caused solely due to non-payment of rent, utilities, or both.
This does not prevent a Landlord from terminating a tenancy for non-payment of rent, or even getting an Order for eviction due to non-payment of rent (subject to the explanation found below regarding new requirements before commencing an application).
What this means is that the Bailiff, who is the only agency legally authorized to perform an eviction does not have authority under the Civil Enforcement Act to evict any person for non-payment of rent or utilities in the residential context during the month of April, 2020.
This is limited to non-payment of rent or utilities; therefore, the Bailiff can still enforce an Order for eviction if the reason for eviction was for damage to the property, criminal activity, or any number of breaches that have nothing to do with non-payment of rent. Therefore, an Order evicting a tenant for non-payment of rent and damage to property will still be enforceable during the month of April, 2020.
Duty of Landlord to Enter into Meaningful Payment Plan
This is the one most overlooked and likely one of the most important changes to Alberta Residential Tenancy Law in recent history.
Alberta’s Residential Tenancies Act (specifically ss. 26 and 29) has temporarily been modified to require the Landlord to enter into or make reasonable efforts to attempt to enter into a meaningful payment plan with the Tenant before terminating the tenancy for substantial breach or applying for termination with the Courts (or RTSDS). The onus is on the Landlord to prove that he/she made reasonable efforts to enter into a payment plan with the Tenant or that the Landlord entered into a reasonable payment plan and the Tenant failed to adhere to that plan before the Landlord can begin the process of eviction.
The Courts have not decided any cases involving this yet, so there is little to no guidance on what constitutes a meaningful payment plan. It is recommended that the Landlord consider the long-term implications of COVID-19 when entering into a payment plan, as a plan which accounts for rental arrears in April, but fails to take into account Tenant may still be experiencing similar hardship in May or June could result in dismissal of the Landlord’s application or more likely a Conditional Order and payment schedule which requires breaching before the Landlord can retake possession of the Premises.
The Courts and RTDRS have always had the power to make Conditional Orders regarding payment plans or to suspend the enforcement of an Order in the interests of fairness. At present there are no changes to the law regarding Conditional Orders, but it is expected that the Courts and RTDRS will be far more likely to make Conditional Orders with payment schedules and will require a breach of the Order proper before the Landlord is given authority to carry out an eviction through a civil enforcement agency.
Advice for Landlords
The best advice for Landlords is to know the law and be familiar with the changes (see above).
The most important things to be familiar with are the changes to the Residential Tenancies Act which will likely remain in effect until August 14, 2020. The Landlord must now prove that they either made reasonable efforts to enter into a meaningful payment plan before terminating the tenancy via written notice or applying for an Order to terminate the tenancy in Court. As this process may take time on the best of occasions, and improperly evicting a tenant has the potential to require the Landlord to start from the beginning, it is critical that the Landlord take all reasonable steps to enter into a meaningful payment plan with the tenant and that such a plan has either been rejected, ignored, or breached before serving the Tenant with a notice to terminate the tenancy for substantial breach.
What constitutes a meaningful payment plan will differ for each case and it is recommended that you speak to a lawyer in deciding how such a plan should be instituted.
Advice for Tenants
With respect to Tenants it is equally important to know the Law (see above changes to law)
The best advice for Tenants is to pay your rent or do everything you can to pay rent (including utilities). The new legislative changes suspending evictions and eviction orders to allow for payment plans will in no way relieve the Tenant of their obligation to pay rent on time.
If you cannot pay rent or are having trouble paying the entire amount due, it is strongly recommended that you speak with your Landlord at the earliest opportunity to arrange for a payment plan. The Landlord is required to enter into or make reasonable attempts to enter into a payment plan before the Lease can be terminated for non-payment of rent or utilities; this does not mean that the Landlord is required to take anything less than what is owed.
Failure to pay at least partial rent in any given month during the COVID pandemic is likely to create more problems for a Tenant as the more that is owed the more difficult it is to enter into a meaningful payment plan which can be sustained by the Tenant.
Finally, failure to respond to a Landlord attempting to enter into a payment plan with you as the Tenant is likely to result in eviction, so do not assume that the changes to the law will protect a Tenant who does not communicate or outrightly refuses to pay rent due to the COVID epidemic. Therefore, it is important to communicate with your Landlord and do everything possible to enter into a meaningful and sustainable payment plan which works for both parties.
The recent COVID pandemic has had a severe impact on the law and policies surrounding Residential Tenancy in Alberta. Not only have late fees, penalties, and rent increases been temporarily suspended, but enforcement of evictions solely for non-payment of rent and utilities have been suspended until April 30, 2020 (pending future orders).
The most important consideration is that the changes to the Residential Tenancies Act will now require Landlords and Tenants to attempt to enter into meaningful payment plans before the termination/eviction process can begin. In the event that the payment plan is in default the Landlord will have to show the existence of such a plan and that it is in default before he/she can begin the eviction process.
It is strongly recommended that both Landlords and Tenants engage in conversation at the earliest sign of a problem and attempt to make reasonable accommodation which will allow for the Tenant to stay in the Premises and pay all rental arrears via a payment plan.
Finally, failure to take these steps properly may result in the Landlord having to start the process anew and/or increase the likelihood that the Court will make a conditional order with a payment scheduling rather than an outright eviction. Should you have any questions regarding the new Residential Tenancy process in Alberta and/or you require professional assistance in dealing with a Residential Tenancy matter please contact Kelly le Vann at 403-346-5591.