HOUSING | COVID-19 in Alberta: A legislative overview of tenancy-related changes - LawNow Magazine

HOUSING | COVID-19 in Alberta: A legislative overview of tenancy-related changes

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Since declaring a public health emergency in Alberta on March 17, 2020, the government has made a flurry of announcements and legislative amendments in response to the COVID-19 pandemic. The government has implemented these changes through legislation and Ministerial Orders that majorly impact both landlords and tenants during this pandemic.

Unlike legislation that goes through a legislative process (including debate), Ministerial Orders do not require approval of the Cabinet. Orders can modify legislation. And like legislation, Orders have the force of law. A number of Ministerial Orders are currently in effect and introduce new protections for renters under the Residential Tenancies Act and Mobile Home Sites Tenancies Act during the state of public health emergency. Most of these orders are in effect as of April 1, 2020.

Ministerial Orders

No fees or penalties for late payment of rent or non-payment of rent

Ministerial Order no. SA: 003/2020 (Service Alberta) makes the Late Payment Fees and Penalties Regulation. Under the Regulation, landlords cannot charge a fee or penalty for late payments of rent or nonpayment of rent between April 1, 2020 and June 30, 2020. This applies even if a provision in a residential tenancy agreement says otherwise. The Regulation applies to every tenancy agreement in effect on April 1, 2020 (the coming in force of the Regulation) and those entered into between April 1, 2020 and June 30, 2020 under the Residential Tenancies Act.

Similarly, Ministerial order no. SA: 004/2020 (Service Alberta) modifies the Mobile Home Sites Tenancies Act to waive late fees from April 1, 2020 to June 30, 2020. This applies even if a provision in a mobile home site tenancy agreement says otherwise. The late fee waiver applies to every mobile home site tenancy agreement in effect on April 1, 2020 and those entered into between April 1, 2020 and June 30, 2020.

Requirement for payment plans

Ministerial order no. SA: 005/2020 (Service Alberta) changes both the Residential Tenancies Act and the Mobile Home Sites Tenancies Act to establish payment plans. If a tenant breaches a tenancy agreement by not paying rent, arrears of rent or utilities, a landlord cannot end the tenancy without:

  • making reasonable efforts to enter into a meaningful payment plan OR
  • entering into a payment plan and then the tenant not following such plan.

Similarly, before making an application for certain remedies (for example, recovery of rent arrears for unpaid rent or termination of a tenancy), landlords must demonstrate the tenant agreed to a payment plan but failed to follow it. Alternatively, landlords must demonstrate that they made reasonable efforts to enter into a meaningful payment plan before making an application.

No rent increases

The Consumer Protection Act now allows customers to extend utility payments.Ministerial order no. SA: 006/2020 (Service Alberta) modifies the Residential Tenancies Act and Mobile Home Sites Tenancies Act to address rent increases. Effective March 27, 2020 (the date of the Order), any new rental rate increases or pre-existing scheduled rental rate increases are suspended for the term of the Order. This Order also applies to fixed term tenancies that have ended and where the landlord and tenant have or will enter into a new tenancy agreement (for the same premises but for an increased amount of rent). This means that the rental payment stated in the expired or terminated tenancy continues for the duration of the Order and replaces the amount of rent payable under the new agreement. Any rent increases will come into effect when the Order ends.

No evictions for failing to pay rent, utilities or both in April 2020

Ministerial order no. 20/2020 (Justice and Solicitor General) suspends the authority of civil enforcement agencies and bailiffs under the Civil Enforcement Act and the Alberta Rules of Court to evict a person for failing to pay rent, utilities or both. This suspension applies to orders issued by the Residential Tenancy Dispute Resolution Service (RTDRS), the Provincial Court and the Court of Queen’s Bench. This Order is only good until April 30, 2020.

Utility payment deferrals, landlord restrictions on entry of premises and more

Under Ministerial order no. SA: 009/2020 (Service Alberta), Service Alberta made a number of changes to legislation it administers, including the Consumer Protection Act, Residential Tenancies Act and Condominium Property Act. Some of the highlights are:

  • The Consumer Protection Act now allows customers to extend utility payments. Between March 17 and June 18, 2020, it is an unfair practice for any person (including suppliers, landlords or condominium corporations) to:
    • refuse to defer a sub metering customer’s utility payments when the customer requests it AND
    • disconnect that customer from energy supply for non-payment, including any non-payment of arrears that accrued before March 17.
  • The Residential Tenancies Act is modified so that landlords cannot enter a rental unit if the tenant, potential purchaser or landlord is self-isolating or in quarantine because they are showing COVID-19 symptoms or have tested positive for COVID-19. However, a landlord in self-isolation or in quarantine can name an agent to enter the premises on their behalf, as long as the agent gives proper notice under the Residential Tenancies Act.
  • A tenant dispute resolution officer with RTDRS must make their order no later than 60 days after the proceedings conclude. This is a change from 30 days in the Residential Tenancies Dispute Resolution Service Regulation.
  • Most of the changes to the Condominium Property Act have to do with a condominium corporation’s governance and gives condominium corporations flexibility in complying with the legislation during the pandemic. For example, the changes suspend certain meeting requirements but do not prevent virtual meetings (e.g., meeting to elect first board, AGMs, etc.). For more information on changes to condominium legislation during the pandemic, go to our COVID-19: Tips for Condominiums in Alberta webpage.
Legislation Changes

Bill 11 and new provisions under the Residential Tenancies Act and Mobile Home Sites Tenancies Act

The first reading of Bill 11: Tenancies Statutes (Emergency Provisions) Amendment Act, 2020 was on March 31, 2020, and it swiftly received Royal Assent on April 2, 2020. Bill 11 amends both the Residential Tenancies Act and the Mobile Home Sites Tenancies Act, while validating the Late Payment Fees and Penalties Regulation, to prohibit rent increases and late fees during a state of public emergency.

… Bill 11 only addresses late fees and rent increase protections. It does not deal with other aspects of the tenancy protection plans announced by the province.One of the changes confirms that landlords cannot increase the amount of rent owed under an existing tenancy agreement until after the emergency ends (June 30, 2020 or another date decided by government) where the:

  • landlord has given a tenant written notice of the rent increase AND
  • the notice period or the Regulation is to elapse between March 27, 2020 and the emergency end date.

Another change affirms that landlords cannot charge fees or penalties for late payment of rent or non-payment of rent between April 1, 2020 and the emergency end date. This change applies to every tenancy agreement in effect in Alberta on April 1, 2020 and every tenancy agreement entered into in Alberta between April 1, 2020 and the end date.

Any provisions in the tenancy agreement are void if they are contrary to the prohibition of rent increases, fees and penalties during the public health emergency.

Interestingly, Bill 11 only addresses late fees and rent increase protections. It does not deal with other aspects of the tenancy protection plans announced by the province. For example, the Bill does not address payment plans and protection from eviction for the month of April for non-payment of rent. Minister (of Service Alberta) Nate Glubish’s rationale is noted in the Hansard pages upon the Bill’s 3rd reading: “[T]hat is dealt with through the Ministerial Orders and only needs to happen for the duration of the public health crisis. It doesn’t need that protection at the expiry of the crisis, so that’s why that is not included in this bill.”

Nevertheless, the wording and legislative intent of the Bill affirms that particular protections – such as prohibition of rent increases, fees and penalties during the state of public health emergency – will still be in effect retroactively beyond the expiry of the public health emergency.

Conclusion

We have heard from both tenants and landlords in Alberta in the past several weeks of the impact of COVID-19. Many are facing challenges, some of which are not addressed by the above Ministerial Orders or legislation. For one, tenants that don’t fall under the Residential Tenancies Act or Mobile Home Sites Tenancies Act miss out on the tenancy protections put in place during the pandemic.

… Ministerial Orders have the force of law—even if they are only in place for a short period.Another concern among tenants is uncertainty of what happens after the end of April— more specifically, when the Ministerial Order for no evictions for failing to pay rent, utilities or both in April 2020 expires. While (in theory under Ministerial Order) landlords must work together with tenants to make payment plans (or at least make reasonable efforts to do so) before a landlord can end a tenancy during the pandemic, there’s questions about whether this is indeed happening in practice. Here at CPLEA, we have been receiving complaints from tenants that some landlords are not cooperating with them in making payment plans. We don’t know if this is a widespread issue.

We have also heard from landlords about their concerns in making their own mortgage payments. The possibility of a prolonged pandemic raises issues about long-term loss of income on their properties. Despite any short-term relief offered by their banks through mortgage deferrals (remember, deferrals just mean paying later), their mortgages remain. Landlords are still on the hook for principal and, in most cases, accrued interest during the deferral period. Some landlords have inquired about whether there is any provincial or federal loan forgiveness for residential property owners similar to the Canada Emergency Commercial Rent Assistance (CECRA) program, which provides forgivable loans to qualifying commercial property owners. Hint: the answer is no as of the writing of this article.

What we can conclude from the flurry of Ministerial Orders and legislative changes over the past several weeks is that there has been swift action in addressing tenancy challenges during the pandemic. Bill 11 makes permanent some rental protections first introduced under Ministerial Orders (such as prohibition of rent increases and fees/penalties during a public health emergency), but not others. However, one important thing to emphasize during this time is that Ministerial Orders have the force of law—even if they are only in place for a short period. Only time will tell if further legislation or Ministerial Orders will address emerging tenancy issues during this pandemic.

For more information on tenancy and condominium-related legislative changes during the COVID-19 pandemic, see the following CPLEA COVID-19 resources:

Authors:

Judy Feng
Judy Feng
Judy Feng, BCom, JD, is a staff lawyer at the Centre for Public Legal Education Alberta. The views expressed do not necessarily reflect those of the Centre.
 


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