Landlord charges Langley salon to apply for federal rent subsidy
LANGLEY, B.C. -- There is no fee to apply for CECRA, the new COVID-19 rent subsidy program, but a Langley hair salon's landlord is demanding payment to fill out the application paperwork.
"On Wednesday afternoon I received a letter from my landlord saying they were going to go forward with it, however in order for them to do so I had to come up with $550 for them to actually apply for it," said Dena Fyfe, the owner of Buhf Beauty Boutique. "I can sympathize with the landlord that the government hasn’t made it easy to apply for this, however, the way they’re going about it is just wrong on so many levels."
With the new program, the federal government pays 50 per cent of a commercial tenant's rent for three months, and the property owner and tenant split the rest.
The program is administered by the Canada Mortgage and Housing Corporation, which confirmed landlords and tenants don't have to pay a fee to apply. CMHC said it's the first time they've been made aware of something like this happening.
In a statement to CTV News, the landlord, Janda Group, said it’s hired an outside company to handle subsidy applications, adding: "The reimbursement costs requested are direct expenses from consultants or from the staff of the landlord. These expenses assist in completing these applications and are only fair to help mitigate the financial impact to the landlord. To be clear, this reimbursement is not a source of revenue, but a way to stop our loss."
While paperwork might take time to fill out, Fyfe doesn’t think landlords should be charging tenants to apply for a program designed to help small businesses survive the pandemic. "I think there is a cost incurred to run any type of business and that’s one of them, and I don’t feel that it needs to be or should be passed onto the customer," she said.
"It’s better than the landlord saying no altogether, which is what most landlords are doing,” said David Gens, the CEO of Merchant Growth, a Vancouver-based small business lender. In a recent survey it found only 20 per cent of landlords had applied for CECRA. But Gens believes charging tenants to apply for the program is also wrong.
"It’s just a fantastic piece of evidence that this program isn’t designed well," he said "That absolutely needs to be prevented. But without being able to force landlords to take the program, I don’t know how you prevent it. I think you have to just dramatically re-think the program and provide the support directly to the tenants."
Faced with the choice of paying the $550 paperwork fee or losing the rent subsidy, which will save her thousands in back rent from when her salon was closed, Fyfe relented.
"They’re going to get their money unfortunately, because if I compare the two, obviously one is better than the other."