There’s a New Legislation in Town

Ontario Landlords have been feeling the short end of the stick for a long time now. Many have raised complaints and asked for more fairness when dealing with tenant/landlord issues. It seems the general consensus among landlords, is that the board favors tenants. Granted, the relationship between tenant and landlord is a dicey one, and the powers that be certainly have no easy task on their hands when it comes to managing these relationships. With that said, Ontario has proposed new rental legislation that some landlords may feel continues the trend of favoring tenants. The Rental Fairness Act is set to for public hearings in Toronto on Tuesday May 9th and Wednesday May 10th 2017. The Standing Committee will be considering those who wish to make an oral hearing on either date. The proposed legislation is officially known as Bill 124, and any current and prospective landlords should absolutely be aware of its proposed changes and what they would potentially mean.

One of the biggest take homes of Bill 124, is that Landlords who wish to evict a tenant for “own use”, will now be forced to either pay the tenant one month’s worth of rent, or offer the tenant another unit as a replacement. For large scale landlords, this may not be an issue; they may have a new unit or be able to arrange for one. For the small-scale landlord, however, they may be forced to pay back the month worth of rent, as they may simply not have another unit to offer. In either case, this will be reality if the bill is passed. In such a scenario, the landlord will also be required to put in writing to the Landlord and Tenant Board that they need the unit for at least a year, and are acting “in good faith”. So, any landlords who wish to evict for “own use” had better make sure they really do need the unit for personal reasons for at least one year. If the unit goes up on advertising sites within the 12-month time frame of eviction, it will be the landlord’s responsibility to explain themselves to the board. Many are arguing that this will kill the small-scale landlord, as they will simply sell off their units finding the headache to simply not be worth it. This in turn will minimize supply.

The proposed legislation runs much deeper than this, however, and any landlords in Ontario should certainly take the time to read the entire proposal. Among the other changes, the new legislation eliminates the “1991 Exemption”, which basically means that landlords will be restricted to set guidelines in terms of how much they are able to raise their rent on a year to year basis. Moreover, new rent control rules will also come into effect once the bill is passed. Landlords will still have the options to raise their rates above the guideline, but to do so they will be forced to apply to the Landlord and Tenant board and follow the often-lengthy timeframes of gaining an approval. One thing that any landlords looking to raise rent above the guidelines must know, however, is that “increased utilities cost” will not be an approved reason.

Also, oral tenancy agreements will still be an option for those who wish, but any landlord who wants a written lease will now have to use a standard government lease. This is meant to prevent dishonest landlords from sneaking in illegal clauses such as prohibiting pets, or demanding security deposits. On this note, the bill will also make it an offence for landlords to go after tenants for any rent accumulated in the period after the tenant has vacated the unit, key fees or any other illegal charges.

One important note, fortunate for the landlord, is that they will still have vacancy decontrol. This basically means that a landlord can raise their rent as much as they want in-between tenants. They simply cannot do so with a current tenant who wishes to stay past the initial tenancy period.

Many landlords are perceiving the proposed changed as draconian in nature. They feel as though these changes will make it very difficult for landlords to conduct their business in a profitable manner. With that said, any landlords who feel that these proposed changes are unfair, should certainly reach out to the Clerk of the Standing Committee to voice their concerns this coming Tuesday and Wednesday.

 

 

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