At least 35% of landlords had renovation or construction work that had to be halted because of the COVID-19 crisis.
Of these, 74% said that the suspension of construction activity (which resumed on April 20) will not delay tenants from taking-occupancy, while 26% believe it will delay the move-in of at least one tenant. These results come from a survey conducted by CORPIQ from May 6 to 11.
However, CORPIQ has calculated that the value of major works, based solely on the rent increase that they will provide in 2021 under the setting criteria, will be derisory.
In fact, with the current economic crisis, interest rates for guaranteed investment certificates have dropped from an already historically low level. However, the rent adjustment granted by the Government of Quebec (therefore by the Régie du logement) on major expenses is based precisely on the return on GICs plus 1%. The rate should therefore be around 2.6% for a rent setting criterion in 2021, predicts CORPIQ, perhaps less. This means that $10,000 of work carried out this year and attributable to a dwelling, for example, would add only $21.67 to its monthly rent.
Nevertheless, these renovations are sometimes essential to ensure the security of the building or even to allow a new tenant to move in. It should be noted that the Government of Quebec has announced a program to compensate households that, for a reason attributable to the COVID-19 crisis, could not move into their next dwelling, condo or house in time. The registration form is available on the SHQ website.