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Non-payment: the situation improves in May, but remains worrying
News
A recent survey carried out by CORPIQ to which more than 2000 landlords answered, reveals that, as of May 6, 9% of dwellings had unpaid rent for the month of May.
This rate proves to be lower than the 14 % of unpaid rents observed in April, also on the 6th day of the month. One of the explanations could be the payment of the Canada Emergency Benefit which allows tenants, who have lost their employment income, to receive $2,000 per four-week period. This was not available in the first week of April.
However, the late rent rate for May is not the same everywhere. While it is close to 4% in seven regions, including the Capitale-Nationale region, it exceeds 11% in Laval, 12% in the Outaouais and almost 15% on the Island of Montreal. This is still better than last month when the rate of unpaid rent, as of April 6, was 19% in the metropolitan area.
A third of landlords (33%) had at least one unpaid rent for the current month, as of May 6, compared to 46% as of April 6.
April's rent is paid
The survey also reveals that April rents have finally been paid as only 2% of April’s rents remain due. Landlords were asked if their tenants were also behind in their May rent payments, since the other landlords who were fully paid for May must have all already received their April rents.
Still concerning April rents, many landlords had made agreements with their tenants in difficulty. Of those still waiting for April rents as of May 6, 17.7% reported that all agreements were respected, 24% found that only some tenants were respecting the agreement, 16.5% regretted that no agreements were being respected by their tenants, and finally, 41.7% had not made agreements with tenants in default.
CORPIQ, which had asked the Quebec government to implement a rent payment assistance program, welcomed the announcement of the $1,500 interest-free loan, on April 29, which provides additional leeway to tenants in difficulty for May and June rents. The Société d'habitation du Québec made the application form available this week. The loan will directly be paid to the landlord.
Paying the mortgage
The paralysis of the economy has not only affected tenants: many landlords lost their employment income in March and April (42% according to the previous survey), in addition to missing rents, to the point where the issue of mortgage payments is becoming a concern. As of May 6, 48.6 %of landlords still believed that they would, or might, experience difficulty paying their mortgage, compared to 67.6%who were concerned in April. Fortunately, mortgage interest rates are significantly lower than they were during the last major economic crisis in the first half of the 1990s. Another 6% of landlords no longer have a mortgage.