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Rental Fairness Act Improves life for tenants and global assignees

On March 8, 2017, All Points reported on what was then a little known loophole for landlords to raise rents above rental rate guidelines, if the property was first occupied for residential purposes after November 1, 1991.  Please see this article here:

Shortly after our relo-lert, this fact became well reported in the media, as the heat of the Toronto market started encouraging many landlords to raise rents far more than the guidelines suggested.  Stories seemed to be everywhere regarding different landlords raising rates double-digits on their tenants.  All these properties had the November 1, 1991 date in common.

We are pleased to advise that in a move to protect renters, the province of Ontario has officially passed new rental legislation on May 18, 2017.  It is called the Rental Fairness ACT, 2017 and it indeed settles a problem that many renters had been battling.

With low vacancy levels and a heated real estate market, rental rates have soared in Toronto and surrounding areas.  As we reported in March, some landdlords gave unsuspecting tenants huge rent increases. This either resulted in tenants having to pay the new rent or find new accommodation.  For those on assignment, it left their housing subsidy far too low to handle the newly increased rent.

Chris Ballard, minister of Housing said, “Today is a good day for tenants in this province. In the face of dramatic rent increases and unfair practices, our government is answering the call to bring fairness and predictability to Ontario’s rental housing system.”

The Rental Fairness Act includes:

  1. No rent increases for any residential rental unit to exceed the provincially legislated annual maximum: 1.5 per cent for 2017 and 1.8% for 2018 unless the landlord has official approval for an above market increase;
  2. Any notices of rent increase given for these units on or after April 20, 2017, must be capped at the rent increase guideline.  The changes do not effect notices given before April 20, 2017;
  3. Enabling a standard lease to help both tenants and landlords know their rights and responsibilities, while reducing the number of disputes;
  4. Protecting tenants from eviction due to abuse of the “landlord’s own use” provision (landlords are able to evict a tenant, if he/she intends to use the property for his / her own purposes, however, this was being abused during the heated market, with landlords claiming “own use” only to re-rent it quickly to a new tenant at a higher rate);
  5. Ensuring landlords can’t pursue former tenants for unauthorized charges.

Important note for Relocations:  This is still not true rent control.  Companies should update their cost of living matrices very frequently for the Greater Golden Horseshoe Area.  Landlords still can raise the rent when their units become vacant, setting the rent at whatever they want to charge.  And with the heated market, this means that rents will continue to climb steadily rendering old cost of living numbers obsolete.

Above guideline increases: Landlords can apply to the LTB for an increase above the guideline for any of the following reasons:

  1. Their municipal taxes or utilities costs have increased by more than the guideline plus 50 per cent. (For example, if the guideline is 1.8%, the costs must have increased by more than 2.7 %).
  2. They incurred operating costs related to security services.
  3. They incurred eligible capital expenditures.

For more information, review the Rental Fairness Act, 2017.

Posted on July 5, 2017 in Relolert

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