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Applying for the Canada Emergency Commercial Rent Assistance (CECRA)

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Applying for the Canada Emergency Commercial Rent Assistance (CECRA)

The federal government body responsible for implementing the Canada Emergency Commercial Rent Assistance (CECRA) program is the Canada Mortgage and Housing Corporation (CMHC). It opened its application portal on May 25, 2020.

CECRA Overview

Applying for CECRA

CECRA will provide forgivable loans to qualifying commercial property owners experiencing rental income shortfalls as a result of the COVID-19 pandemic. The ultimate result of the program will be to reduce gross rent for small business tenants by 75% for the months of April, May, and June 2020. 

This is a voluntary and optional program for qualifying landlords. If an eligible landlord elects to participate, their eligible small business tenants would only be required to pay 25% of their monthly rent. The provincial and federal governments would fund the 50% and the landlord would absorb 25% of the monthly rent.

Note: CECRA is a voluntary program for both the property owner and the eligible tenant(s).

When to Register

All property owners in Ontario may register as of May 27, 2020. The portal will be online 24 hours a day, 7 days a week for applicants to complete their application and submit documents, once a property owner has been registered.

Note: Property owners will have the opportunity to apply until August 31, 2020, provided they can demonstrate eligibility during April, May, and June 2020.

Loan Forgiveness

The 50% portion of the rent that the federal and provincial governments are covering will be in the form of a loan, which will be forgiven, provided that the landlord meets the following criteria:

  1. Reducing eligible tenants’ rents by at least 75% for April, May, and June 2020;
  2. Does not seek to recover the reduced rent amounts once the program ends; and
  3. Agrees to place a moratorium on evictions for a three-month period

If the property owner has already collected rent for April, May, or June 2020, they must either provide the tenants with a direct refund or provide a credit for future rent payments (if agreed to by both parties).

As part of the application, property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement provided by the CMHC.

Note: The CMHC portal provides a digital forgivable loan agreement which property owners must acknowledge as part of the application process, which can be found here: https://assets.cmhc-schl.gc.ca/sites/cmhc/finance-investing/covid19-cecra-small-business/forgivable-loan-agreement-terms-conditions-en.pdf?rev=2f439497-bb51-40b2-a552-d9637e715817

Document Checklist 

The CECRA portal requires the following documents to support an application:

1. Executed Rent Reduction Agreement 

Property owners must enter into a legally binding rent reduction agreement with each impacted eligible tenant to confirm the rent reduction in accordance with the program terms and conditions. This agreement is conditional upon final approval of the application for CECRA. Note that despite the form provided by the government, it is the parties’ responsibility to ensure the agreement meets both program and legal requirements.

2. Attestation from the Property Owner

Property owners must sign an attestation confirming the information relating to the property owner and the property is correct and attest to their eligibility for the program. It also includes an Integrity Declaration attached as an appendix.

Note: Should the property owner and any of its impacted tenants are not at arm’s length

  • Lease (or sub-lease) to the impacted tenant must be on fair market terms;
  • Total gross rent payable under such lease must be no higher than fair market rent; and
  • Lease must not have been created or amended after April 1, 2020.

3. Attestation from the Impacted Tenant

Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. The tenants are responsible for attesting to their eligibility with the program requirements. It also includes an Integrity Declaration attached as an appendix.

4. Rent roll for the Property current as of June 1, 2020 (if June rent roll is not yet available, then provide current rent roll).

5. Copy of property tax statement.

6. Copy of most recent bank account statement related to the subject property.

Additional Required Information

  • Property Information: Property address, property type, and the number of commercial units.
  • Property Owner Information: Name of the registered owner of the property and the property owner tax registration number.
  • Applicant Information: Bank account information, property owner contact information, co-ownership information and contact details for co-owners.
  • Tenant Information: Tenant contact information, registered business name, lease area and the monthly gross rent for the period of April, May, and June 2020.

How to Apply

The application is available through the CMHC portal here: https://cecra-apply.ca/account/login

Learn More

To learn more about government assistance programs for businesses and relevant eligibility criteria, please see other articles prepared our legal team here, for additional information and details.

The lawyers at Kalfa Law are prepared to answer any of your questions on ongoing issues or concerns during this time. Please reach out to our corporate and commercial legal team at Kalfa Law and we would be more than happy to provide you with legal advice pertaining to your specific situation.

Baber Rahim, Tax Law Clerk & JD Candidate

© Kalfa Law, 2020

The above provides information of a general nature only. This does not constitute legal advice. All transactions or circumstances vary, and specified legal advice is required to meet your particular needs. If you have a legal question you should consult with a lawyer.

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