1. When Does it Apply:
CERS applies from September 27, 2020, to June 2021 for those who qualify. However, the current amounts and thresholds announced only apply to December 19, 2020, and will be reassessed by the federal government in the interim.
2. Who Does it Apply To:
The CERS benefit in the form of a subsidy will be paid directly to qualifying tenants and property owners that suffer revenue losses based on a gradually decreasing scale that corresponds with the amount of revenue shortfall. Property owners will be able to use it to apply to commercial mortgage interest expense.
Tenants are not required to negotiate and enter into rent-reduction agreements with their landlord as was required under the CECRA program.
3. What is the Subsidy
Rent expenses (or commercial mortgage interest expenses) of qualifying will – until December 19, 2020 – be reimbursed, on a sliding scale, up to a maximum of 65 percent of eligible fixed property or mortgage interest payments, with an additional 25 percent subsidy provided to qualifying business/organizations which were required to close temporarily by “a mandatory public health order issued by a qualifying public health authority”.
As a result, it is possible that a qualifying business/organization could potentially have up to 90 percent of their rent or mortgage interest payment subsidized. A revenue decline of 70 percent or more will maximize the subsidy available, with a sliding scale to provide a smaller percentage of subsidy relief for organizations with a smaller decline.
Given the length of the program, changes to the program may be announced from time to time depending on how the pandemic continues to affect business/organizations.
I will update as further details are provided.
Disclaimer: This article is for general information purposes only and not intended as or to be relied upon for legal advice. Consult with a lawyer for your unique situation.
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