As the impact of coronavirus (COVID-19) continues to unfold, the federal government stands by its commitment to help support Canadians financially affected by the virus.
Many who are in the process of moving likely still have questions about how the whole operation should unfold over the weeks ahead. Both industry and government leaders are adapting to completely unprecedented circumstances and are seeking solutions. Our article on moving during COVID-19 offers some details on how that’s playing out so far.
The MoveSnap team is actively compiling a database of information to help support our clients with their move and household-related questions.
6 changes that could impact you if you’re a new homeowner or planning a move during the coronavirus pandemic
1. Property Tax Relief
For many households, property tax is the highest expense carried after mortgage payments. Municipalities across the country have instituted property tax relief programs to give property owners time to adjust to their pandemic-impacted financial situations. Anyone moving into a new property should check with their financial institutions to see how this could impact their upcoming fee schedule, as programs do vary.
2. Rent Relief
The first of April loomed large in the minds of renters facing economic hardship. Just in time for the beginning of the month, the government released some assurance that there will be no non-urgent evictions for the foreseeable future. In British Columbia (which holds some of the highest rents in the country), the government has created an emergency relief fund offering up to $500 per month to landlords.
If you’re moving into a new rental unit, you may want to communicate with your landlord to see if they’ve considered forgoing an annual rent increase, or whether they may be amenable to possible rent deferral in the event of job loss or salary reduction. Beyond provincial mandates, it’s important to remember that any further relief comes at the individual discretion of the landlord or property company.
3. Utility Services Billing Changes & Relief
Many people are also concerned about a spike in their utility bills now that Canadians have been asked to stay at home. A number of provinces and municipalities have enacted relief programs to help:
- The Ontario Energy Board has temporarily suspended time-of-use pricing, and will be charging off-peak hours 24/7 for the next 45 days. And Toronto has extended water, sewer, and waste bill deadlines to include a grace period of 60 days after billing.
- British Columbia has announced a three-month relief package for residents, starting April 1. Qualifying households will receive a credit of three times their average monthly bill over the past year to help cover their electricity costs, a credit they do not have to repay.
- In Alberta, the grace period for water, sewer and waste bills extends to 90 days.
- Regina has instituted a program to support people with overdue water, sewer and waste accounts through smaller payment installments
- In Saskatoon, overdue water, sewer and waste payments have been deferred until September 30, 2020.
No matter where you live, in many municipalities there will be no service suspension due to missed payments. Other cities continue to roll out their emergency support measures based on local decision-making and should have information available on their official sites. If you’re moving into a new home or out of a new one, you should check with your local service provider to see if any of these emergency measures apply to your current or new billing cycle.
4. Mortgage Payment Deferrals
Mortgage deferral on a primary residence is available through several banks for six months (with some banks now allowing this program for rental properties as well). Keep in mind, this is putting off, not cancelling your interest charges accumulating during this time, and it’s worth considering whether it makes more sense long-term to maintain payments to avoid the extra interest costs at the end of the six months. Be sure to check with your mortgage specialist or lender to discuss your options, as deferrals are assessed on a case-by-case basis. In the meantime, if you’re concerned about a new mortgage on a property you’re about to move into, the Canada Mortgage and Housing Corporation has compiled helpful documentation that addresses primary questions around the new pandemic-related regulations.
5. Government ID Renewal Extensions
In Ontario, the government has extended the expiry of driver’s licences and health cards for an indeterminate period of time to help avoid large, in-person gatherings for the time being. Residents can also apply online for certain services, including updating your government ID cards with a new address. Certain extension protocols now apply, so it may take longer for you to receive your updated driver’s licence in the mail, and you do not need to pick up an updated vehicle permit until further notice. You can continue using your current health card as long as you register your new address online.
6. Federal Tax Relief
The individual tax filing due date has been deferred to June 1, 2020, but the government is encouraging 2019 filing sooner than later. Many full-time employed individuals will receive refunds that could help during this time, especially with a move or any major expense that’s still scheduled to go through over the next few months. On that note, if you do owe taxes, payments can be deferred to August 31, 2020, without incurring interest or penalties.
Finally, what is “force majeure” and what does this mean for my real estate contract?
Force majeure is a term that roughly translates into a “superior force” or “act of God” that impacts the contract between the home buyer and seller. And according to the Financial Post, force majeure won’t help you if you purchased a home before COVID-19.
Examples of force majeure range from local, such as an unexpected change in government legislation that impacts pricing, a strike, or a recession, to the extreme, like a war, an explosion, a hurricane, etc. Under the force majeure clause, there are protective measures in place that allow affected parties to extricate themselves from their contract because they are not liable for these circumstances beyond their control.
A global pandemic like COVID-19 certainly demonstrates at least one major characteristic of force majeure in that its effect is beyond our control. Many have wondered whether market prices will spiral as a result of the virus, and what this means for the value of their home. Others are facing economic instability due to job loss that may result in short-term liquidity problems. Some question whether these factors provide them with any wiggle room to get out of their deals due to “buyer’s remorse”, while on the other end of the spectrum, others are anxious whether their deals will close.
For now, COVID-19 has not been classified as a “force majeure.” Mark Weisleder, a partner with the law firm Real Estate Lawyers.ca LLP, is quoted in the article saying the “only way a deal cannot close is if the government registration system closes down or lenders cannot fund loans, which is not the case right now.” This should extend some relief to buyers and sellers concerned about their protections under Canadian law at present. Mr. Weisleder also offered extended legal advice around buyers and sellers protecting their deals, emphasizing that it’s in everyone’s interest to deal compassionately and fairly with individual circumstances.
As circumstances change from week to week, MoveSnap is here to help with your upcoming move and keep you informed about your moving questions and concerns.
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.