On September 1st, 2017, the Rental Fairness Act 2017 came into effect, and with it some important Tenant rights that make it harder to be a Landlord in Ontario. We’ve outlined the three most important changes to Landlord obligations below.
**Note: If you need further clarification about Landlord obligations, the Residential Tenancies Act or the Rental Fairness Act 2017, and you’re not a new or existing client of the BREL team, please contact the Landlord and Tenant Board directly.
Being a Landlord in Ontario is starting to feel a little like this:
Rent Control in Toronto
Then:
- Properties built after 1991 were not subject to Rent Control increase guidelines – Landlords could raise the rent as much as they wanted after the initial fixed-term lease
- Landlords could apply for rent increases above the guidelines if their utilities or municipal taxes had increased by an extraordinary amount
Now:
- All properties, irrespective of build date, may not increase rent by more than the allowable % (which each year is indexed to the Consumer Price Index; the 2017 maximum rent increase is 1.5%)
- Increased utility costs are not considered a valid reason to increase rent beyond the guideline
- Note: Landlords can increase the rent as much as they want when finding a new Tenant – the new guidelines only impact existing, ongoing tenancies.
Termination by Landlord
Then:
- Previous to the Rental Fairness Act, 2017, a Landlord could give a (month-to-month) Tenant 60 days notice to vacate if the Landlord, or one of their immediate family members, wanted to move into the unit.
Now:
- If a Landlord (or their family member) wants to occupy the unit, they must compensate the Tenant with one month’s rent or offer them another acceptable unit
- The Landlord must occupy the unit for at least one year
- If the Landlord advertises the unit for rent or sale, re-rents, demolishes or converts the unit within 12 months of the Tenant vacating, the Landlord is subject to a fine of up to $25,000
- Note: When a tenanted unit is sold to a new Buyer and the existing owner gives notice to the Tenant on the new owner’s behalf, compensation is not required
Tenancy Agreements
Before:
- The Landlord had to provide their legal name and address to the Tenant
Now:
- Every tenancy agreement must be “in the prescribed form” (in other words, a standard lease agreement) and comply with the requirements (in other words, clauses that don’t comply with the Act are prohibited).
- As of writing, the new standard lease agreement is still under review – once approved, it will become the standard agreement across Ontario.
- A Tenant can demand that the Landlord provide a written tenancy agreement (and can withhold rent if the landlord does not provide it within 21 days of demand)
- The tenancy agreement must be signed by both the Landlord and Tenant before the date of occupancy
There’s no doubt that the new Rental Fairness Act will impact Landlords and the rental market in Toronto. While intended to make it easier to be a Tenant, many people (us included) believe it will lead to a decreased supply of rental units and higher prices.
Looking for everything you need to know as a Toronto Landlord? Check out our Guide for Landlords
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