Pet spa owners livid over 30% rent hike, but landlord counters it's 'market rate'
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As Michelle Tao prepares to re-open her pet spa, she can’t help but feel anxiety over a proposed 30% commercial rent increase.
Tao, who co-owns Woofur Holistic Pet Care Centre — located at 1285 Elgin Mills Road E. in Richmond Hill — with her husband Doug Kwong, has watched while the COVID-19 shutdown drove down her revenues by more than 70%.
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And with their seven-year commercial lease poised to expire June 30, landlord Primont Homes is asking for hikes which will drive up their rent over a period of six months by about 30% — a monthly increase of roughly $2,500 on top of the $8,500 they’re currently paying.
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“The rent they’re asking us to pay is equal to a premium spot on Yonge St.,” said Kwong, 42. “It’s a little crazy to be asking for that.”
“Surprisingly, this proposal came after the pandemic hit and during the time our business was closed,” said Tao. “I understand that there are a lot of small businesses out there, even within our commercial plaza, who could not afford to pay their rents for April and May, not to mention an increase of 30% for the subsequent months.”
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Tao added a provincial commercial rent freeze would help out small businesses as they re-open and begin to recover.
Joe Montesano, the president of Primont Homes, said Wednesday that under the current terms, Woofur’s rent is 40% below market value as compared to what neighbouring tenants pay.
“Woofur was told that if they wanted to renew for a five-year lease, then it would have to be at a market rate. As a gesture of good faith, and in light of the serious impact caused by the pandemic, we told them that we are willing to gradually transition them to a market rate over a period of time and offer them short-term relief in the interim,” he wrote.
“When the pandemic struck, we made clear to Woofur — and indeed all of our tenants — that we were willing to make compromises in order to assist with short term pain while ensuring that the long-term relationship remained commercially reasonable for both parties,” said Montesano.
He added that Woofur “rejected these reasonable offers” and made it clear they will only accept another long-term lease at well-below market rates.
On Wednesday, Prime Minister Justin Trudeau unveiled help for landlords who take part in the CECRA program.
In order to qualify, landlords must offer a 75% rent reduction to their small business tenants for the months of April, May and June. In exchange, government will cover 50% of the rent payment, leaving tenants and landlords to each pay 25%.
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“We will certainly look into the program,” said Montesano.
Primont said it is looking at all options, including rent-deferrals and other steps that effectively are short-term rent freezes.
Premier Doug Ford warned landlords on Tuesday “not to force my hand” by jacking up rents.
— With files by The Canadian Press
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