The Residential Tenancies Act, 2006, takes
effect on January 31, 2007. The Act was
passed in June of 2006, and it replaces the
Tenant Protection Act, 1997. The new Act
affects approximately 1.35 million renter
households in Ontario, representing 32
percent of Ontario’s population.
As many real estate professionals are significantly
impacted by this legislation, TREB was
very involved in ensuring Members’ opinions
were heard. TREB’s actions on this issue
included gathering Member input on residential
tenancy issues via TorontoMLS and hosting a
session with Brad Duguid, the Parliamentary
Assistant to the Minister of Municipal Affairs
and Housing, who was responsible for consultations
on this issue. The session was attended
by over 120 TREB Members who were able to
give their input directly to Duguid. In addition,
TREB provided formal written comments to the
provincial government and met with government
representatives.
Though the Act contains many important
changes, of particular interest to many
REALTORS® are sections dealing with rent
increase guidelines, excessive or wilful damage
to a unit, causing a disturbance in a landlord’s
home and interest on last month’s rent. Full
details of the Act, including summaries and frequently
asked questions, are available from the
website of the Ontario Ministry of Municipal
Affairs and Housing at www.mah.gov.on.ca.
A summary of some of the key changes
included in the Act are outlined as follows:
Landlord and Tenant Board
The Ontario Rental Housing Tribunal, the body
handling the dispute resolution process,
becomes the Landlord and Tenant Board. The
Board will send information notices about the
eviction hearing process to tenants who have
had eviction applications filed against them.
Landlords are still responsible for giving the formal
“Notice of Hearing” to their tenants.
Annual Rent Increase Guideline
Under the legislation, the annual rent increase
guideline will be based on the Ontario
Consumer Price Index (CPI.) The CPI will be the
rate of inflation for the year running from June
to May. The guideline is announced each
August; it will be more stable and never higher
than inflation. Buildings constructed after 1991
remain exempt from most rent controls.
Above Guideline Rent Increases
When landlords receive permission to issue
above guideline rent increases for higher utility
costs or for capital work on the building, they
must reduce these rents if utility costs go down
or when the capital expense has been paid for.
In addition, landlords must inform these tenants
of the buildings’ utility costs each year,
and there is a stricter test to decide if capital
expenses are really necessary.
Starting Rents
One of the key issues TREB raised during consultations
with the provincial government on the
proposed new legislation was the importance of
maintaining the existing policy that allows a
landlord to negotiate freely for the rent of a
vacant unit. This policy was preserved in the
new Act, meaning landlords and new tenants
can still negotiate starting rents. Once the rent is
set, it is controlled by provisions of the Act.
Interest on Last Month’s Rent
The rate of interest that a landlord must pay a
tenant on a last month’s rent deposit every year
is the same as the annual rent increase guideline,
which is based on the Ontario Consumer
Price Index.
Excessive or Wilful Damage to a Rental Unit or
Building, or Causing a Disturbance in a
Landlord’s Home
There is a shorter eviction process for tenants
who cause wilful or excessive damage to a
rental unit or building, or for tenants who rent
an apartment in a landlord’s home and are
causing a disturbance.
The notice period to the tenant is shortened
to 10 days from 20 days. Landlords can apply to
the Board for an eviction order immediately
after serving the notice. The eviction order will
ask the Sheriff to speed up the enforcement of
the eviction.
Buying, Selling, Leasing or Investing in real estate is sometimes a complex undertaking. Hiring me, a real estate professional will help save you time and money. steven@maislin.com
