As a result of a default, CMHC may terminate the loan and seek immediate repayment with interest and exercise all rights and remedies for all statutory documents, including the transfer of the loan to the Canada Revenue Agency or a settlement available to it through the Canada Revenue Agency. On April 24, 2020, the federal government gave these parties cause for optimism by announcing an agreement in principle with the provinces and territories to provide rent reductions to qualified small entrepreneurs severely affected by the COVID 19 pandemic. When a landlord/tenant/tenant/tenant provides false or misleading information in its certificate or by any other means in connection with a CECRA loan application, CMHC may find that the party in question is not entitled to obtain financial or other benefits through CMHC and may suspend the applicable portion for claims to recover the benefits received. CMHC, along with MCAP and First Canadian Title, will administer CECRA on behalf of the federal and provincial/territorial governments. The program is expected to be operational this month and will include an online application process, where parties will be required to submit certifications on eligibility conditions, a rent reduction lease and a forgivable loan contract. Among other things, the loan agreement contains specific agreements of the landlord/landlord not to respond to late payment notifications or to attempt to distribute the tenant concerned during the programming period, and again to compel the tenant concerned to pay more than 25% of the rent for the programming period in question and not to attempt to recover a rent surrendered, unless the tenant has established that he has provided false or misleading information based on his or her property. In this case, the landlord agrees to make economically reasonable efforts to recover the previously allocated rent and use these funds to repay the loan to CMHC. The loan agreement is not clear, but it is likely that the landlord would not be required to repay the portion of the CECRA loan attributable to that tenant`s rent, unless the landlord/owner actually succeeds in his recovery efforts. The landlord/landlord must also notify the CMHC if he or a affected tenant receives a loss of rent insurance product or a non-refundable rent relief from the state that has not already been deducted when calculating the loan amount.
The CMHC website provides instructions in cases where a landlord and tenant do not trade weapons grounds, including cases where the landowner owns the small business that is his sole tenant. Under these conditions, the government allows property owners and tenants who are unable to benefit from CECRA as long as all the general requirements of the program apply and there is a valid and enforceable rental agreement at a value that is not above market conditions.