Rental Security during COVID-19 - Repayment Plan
As part of its response to the COVID-19 emergency the GNWT introduced temporary regulations under the Residential Tenancies Act on April 9, 2020. The Residential Tenancies (COVID-19) Regulations R-049-2020 give tenants a way to delay paying their rent if they lost their job or had a significant reduction in their income due to the pandemic. The regulations require tenants to tell their landlord in writing the reasons why they are unable to pay their rent, and about any measures that they are taking to find other income. Tenants still need to pay all of their rent as soon as they are able to do so, however, some tenants may have accumulated large amounts of arrears of rent that they now owe.
Similar protections for tenants were established in many jurisdictions across Canada, but have now been repealed (cancelled). It is important to remember that the rights of landlords and tenants should remain balanced, and the restrictions the temporary regulations put on landlords cannot remain in place forever.
The GNWT will be introducing new COVID-19 regulations to replace the current ones. The new regulations will provide for repayment plans for tenants to pay back the rent arrears they accumulated under the current COVID-19 regulations.
March 18, 2020 – Declaration of a state of public health emergency ordered under the Public Health Act in the NWT.
April 9, 2020 – The Residential Tenancies (COVID-19) Regulations R-049-2020 were put into effect.
March 18, 2020 - January 31, 2021 (from the declaration of a state of public health emergency, until the day before the new regulations come into effect) – This is the “specified period” in the new regulations.
This is the period of time in which tenants may give written notice to their landlords if they are unable to pay rent because of significant loss of income due to the pandemic, and are concerned they may get evicted. Rent that becomes due during this specified period is referred to as “affected rent”. Repayment plans under the new regulations deal specifically with affected rent.
February 1, 2021 – The new regulations will come into effect, and landlords/tenants may establish repayment plans. The original regulations will be repealed.
February 1, 2022 – Repayment plans under the new regulations must be entered into by this date.
February 1, 2024 – The new regulations will be repealed. The protections for tenants will no longer have effect after this date, regardless of whether the landlord and tenant have agreed to extend the repayment period beyond this date.
Who do the new regulations apply to?
Tenants who give written notice to their landlord under the original regulations between March 18, 2020, and January 31, 2021, (the specified period) will continue to be protected from eviction due to unpaid rent under the new regulations unless they fail to make a payment under a repayment plan or under a “prior agreement”. A prior agreement is a payment plan that was established before February 1, 2021, that has been agreed to by the landlord and tenant and that deals with affected rent.
The new regulations deal with situations where tenants were unable to pay their rent because they lost their job or had their income significantly reduced due to COVID-19, and who have now accumulated arrears of rent that they owe.
Who can establish a repayment plan?
If a tenant has given written notice to their landlord under the original regulations and the landlord and tenant have not entered into a prior agreement that sets out how unpaid affected rent will be repaid (or if the landlord and tenant entered into a prior agreement but it does not deal with all of unpaid affected rent), either the landlord or the tenant can choose to start a repayment plan.
What happens if I already have a payment plan?
If you already have a repayment plan in place to pay back arrears of rent that accumulated between March 18, 2020, and January 31, 2021, that has been agreed to by you and your landlord, this is called a “prior agreement” in the new regulations. If you have a prior agreement that deals with the full amount of the affected rent that you owe, a new repayment plan is not needed.
Your landlord cannot apply to terminate your tenancy for unpaid rent if you have a valid prior agreement in place and you are making those payments in full and on time.
Can I replace my prior agreement with a repayment plan under the new regulations?
The prior agreement that you made with your landlord can be replaced with a repayment plan under the new regulations if the prior agreement does not deal with the full amount of rent that you owe that built up between March 18, 2020, and January 31, 2021. If the full amount is dealt with, the prior agreement remains in place unless both the landlord and tenant agree, in writing, to change it.
I gave my landlord written notice under the original regulations, and now I owe them back rent – will I have to pay it all back on February 1, 2021, when the original regulations are repealed?
The unpaid back rent must be paid, but how and when depends on whether the landlord or tenant gives a repayment plan under the new regulations. If neither the landlord nor tenant gives a repayment plan then the unpaid back rent remains due in full. However, because the tenant gave written notice under the original regulations, the landlord cannot apply for an order to terminate the tenancy and have the tenant evicted.
If a repayment plan is given, or a prior agreement to pay was entered into, payments must be made in accordance with the repayment plan or prior agreement. However, if the tenant doesn’t make the payments, then the landlord could apply for an order for lump sum payment of the arrears and to terminate the tenancy and have the tenant evicted.
Why get a repayment plan?
The original regulations require that tenants need to pay the full amount of rent they owe every month, but allow for that to be delayed for a period of time if they are unable to pay because of a significant loss of income due to the pandemic. Under this new regulation, repayment plans are intended to give tenants a reasonable amount of time to pay back any rent they owe that has built up since March 18, 2020.
Your landlord will not be able to terminate your tenancy for unpaid rent from this period if you have given written notice as set out in the original regulations, and are making the payments in full and on time as required by a repayment plan or prior agreement.
How do I start a repayment plan?
Either a landlord or a tenant can choose to start a repayment plan. The repayment period starts on the day that you or your landlord gives the other a valid repayment plan. A repayment plan is valid if it has all the required information in it and follows the terms set out in the regulations. A repayment plan template will be available for landlords and tenants to use.
What needs to be in the repayment plan?
To be valid, the repayment plan must be in writing and must contain the following information:
- The date the repayment period starts. This is the day that you give the repayment plan to your landlord or your landlord gives it to you.
- The total amount of unpaid rent that has accumulated between March 18, 2020 and January 31, 2021.
- The date each installment must be paid. Each installment will be due on the same day of the month your rent is usually due, unless both the landlord and the tenant agree to change this.
- The amount that must be paid in each installment. Each installment will be in equal amounts spread out over a 12-month period, unless both the landlord and the tenant agree to change this.
When will I have to make my first payment under a repayment plan?
The first payment is not due until at least 30 days after you gave the repayment plan to your landlord or your landlord gave it to you. Payments will be due on the same day of the month that you usually pay your rent.
The repayment plan may consist of 11 or 12 payments in total depending on when the repayment period starts. The following are examples of how this would work depending on the start of the repayment period if you owed $2400:
Your rent is due on the 1st of every month. You give your landlord a repayment plan on September 1, 2021, and the one-year repayment period starts that day. The first installment would be due at least 30 days later, so on October 1, 2021. This means that you would pay back your rent in 12 equal installments of $200 (in addition to your regular rent) on the 1st of every month, with the last payment due September 1, 2022.
Your rent is due on the 1st of every month. You give your landlord a repayment plan on September 16, 2021, and the one-year repayment period starts that day. The first installment would not be due until November 1, 2021, because the first installment needs to be at least 30 days after the repayment period starts, and payments are to be made the same day rent is due. This means that you would pay back your rental arrears in 11 equal installments of $218.18 (in addition to your regular rent) on the 1st of every month, with the last payment due September 1, 2022.
What happens if the repayment plan has an error or is missing something?
A repayment plan made under the new regulations is only valid if it has the required information and is following the terms set out in the regulations. If the repayment plan is missing information or is not following the terms in the regulations, it will need to be redone in order to be valid.
Can the landlord and tenant agree to different terms for a repayment plan?
A landlord and tenant may agree to amend the terms of the repayment plan outside of what is set out in the regulations (for example, a landlord and tenant can agree to make installment payments due on a day other than when rent is normally due, or to extend the 12 month repayment period).
The original regulations prevented a landlord from terminating a tenancy for a number of reasons other than a tenant’s inability to pay rent – will these protections remain in place?
The original regulations say that if a tenant provides written notice to their landlord, the landlord cannot apply to terminate that tenancy due to the tenant’s inability to pay rent. The regulations also prevent a landlord from terminating a tenancy if written notice has been provided for a number of other reasons where they would normally be able to. This includes when:
- A rental property is the landlord’s only residence in the Northwest Territories
- A tenancy agreement is for subsidized public housing
- A landlord requires possession of the rental premises for use as their own residence, or their immediate family
- A landlord has entered into an agreement of sale
- A landlord requires the property for demolition of the residence, extensive renovations, or if they are repurposing the property and will no longer be renting it
- A student or staff member was provided housing by an educational institution but no longer meets the requirements to qualify for that housing
- A landlord and a tenant share a bathroom or kitchen facility and have had personal differences that make continuing the tenancy unfair to either of them
Under the new regulations, these additional protections are removed and a landlord may terminate the tenancy in these situations once again, as they have been able to in the past. The new regulations mean that if a tenant makes the necessary payments as set out in their repayment plan or prior agreement, the landlord cannot terminate the tenancy for that unpaid rent.
When do I have to have a repayment plan in place?
If a landlord or tenant wishes to establish a repayment plan under the new regulations, it must be given no later than February 1, 2022. This will mean that most one-year repayment plans will conclude by February 1, 2023. The regulations will remain in place for one additional year beyond that up until February 1, 2024, in case landlords and tenants agree to extend the repayment period for up to an additional year (for example 24 installments over 2 years instead of 12 installments over one year).