October 15th 2021
For those of us who are residential landlords or for those aspiring to be there is a relatively new piece of legislation that we need to be aware of. It’s called the “Protecting Tenants and Strengthening Community Housing Act 2020”. Its effects are quite far-reaching. It makes amendments to the Residential Tenancies Act 2006, the Housing Services Act 2011, and The Building Code 1992 and it replaces the Ontario Mortgage and Housing Corporation Act.
It does deal with a number of issues and areas that are not impactful to the residential investor. Areas like changes to land lease and mobile home rules, allowing landlords to maintain and upgrade infrastructure issues such as water and sewer systems and recover investment costs more quickly. Enhance employer’s ability to offer employees affordable housing options. Upgrade and streamline development and management of community housing. And so on.
But it also deals with a few key areas under the Residential Tenancies Act.
First, and in response to COVID-19, the Act looks at tenants who have fallen in rent arrears since March 17, 2020. Now, in these cases, before the Landlord and Tenant Board can issue an eviction order it must first look at whether the landlord tried to negotiate a repayment plan with the tenant. If not, the Board will attempt to act as arbitrator to arrive at such a plan. On the positive side, however, once such a repayment plan has been approved and filed with the Board, the landlord can quite easily receive an eviction order if and when the tenant breaches the agreement.
Perhaps the most significant area of scrutiny under the act is where a landlord is seeking a “no-fault” eviction of a tenant because the landlord, his immediate family or the new buyer of the property needs the unit for their own personal use. Since landlords will occasionally use this as a means to re-rent a unit at higher, market rent, the Board will first look to see if the landlord has done this in the past. If it appears he/she is moving a family member in, only to have them move out a year later so the unit can be re-rented, the Board will not give the eviction order. And while the rule of thumb has always been that the family member must stay put for one year because that’s how long the tenant has to appeal to the Board if he feels he has been wrongly evicted, that has now been increased to two years.
Another issue with “no-fault” evictions are new costs and penalties. If the tenant is being evicted because the landlord, family or beneficial owner requires the unit, the landlord must pay the tenant one months rent.
In the event the tenant is being evicted because the landlord is doing extensive repairs or renovations to the unit, the tenant must be given the opportunity to move back in at the same rent before the landlord can offer it to others. If the landlord does not, he can be ordered to pay rent differential to the tenant for a full two years to a maximum of $35,000. That compensation also applies to bad faith “own use” evictions, where the landlord/purchaser does not use the unit themselves.
And in order to better enforce Residential Tenancies Act offenses, investigators are now able to get a court order accessing financial records much more easily than was previously the case. And should the landlord be found at fault, maximum fines have been increased from $25,000 to $50,000 for an individual and from $100,000 to $250,000 for a corporation convicted of an offense.
Sounds ominous, and certainly in some ways it is. Consumer protection legislation is never designed to be balanced. It is there to protect the party deemed to be most vulnerable. But for landlords, it re-enforces the need to be informed, to follow the rules, and to work hard at maintaining good landlord/tenant relations. And, of course, to use every tool available to you, to make the right choices when selecting a tenant in the first place. Nothing, of course, is foolproof, but when renting a unit take your time and do your research. If it means you ultimately delay filling the unit, just remember, it’s better to have a unit vacant for a short period, than wish you did.