Rental Fairness Act: What is it?

Understanding the new Rental Fairness Act, (“RFA”) is imperative to knowing your rights as a landlord and as a renter in Ontario. The RFA is a new initiative that is included in the Ontario’s Fair Housing Plan, which was released in April 2017 to stimulate reasonable housing prices in Toronto.

The RFA, removes the exemption to past rent increase rules and obligates landlords to pay tenants if they desire to terminate their tenancy agreement, for personal use. Additional amendments made to the Residential Tenancies Act are as follows:

Whether you are a co-op or a landlord, the province decided you will pay more asserting your rights at the Landlord and Tenant Tribunal.   The co-op application fees increase from $20 to $190.   Landlords also face a rate increase, if they file their application online they will save $15.

Increasing Rent

With the announcement of the RFA, units that were formerly excused from the rent control rules prescribed by the Act will no longer be exempt. The following units will now be subject to the guideline amount outlined by the RFA:

  1. Units that weren’t occupied before June 17, 1998;
  2. Units that were not rented since July 29, 1975; and
  3. Units that were not occupied for residential purposes before Nov. 1, 1991.

For these former exempted units, landlords cannot increase the price of rent unless 12 months have passed from the date the tenancy began or the day rent was last increased. The landlord must give at least 90 days’ notice before making an increase to rent. If a landlord wishes to increase rent by more than the guidelines set out they will be required to apply to the Landlord and Tenant Board.

Terminating a tenancy

Landlords can still terminate a tenancy for his or her “personal use” if they, a spouse, child, and or caregiver are planning on moving in to the unit.  The RFA act requires the landlord to reimburse the tenant for one month’s rent, or agree on another place for the tenant to live. No eviction order can be issued until this compensation is paid by the landlord.  If a landlord does not pay the compulsory sum, tenants can apply to the Land Lord and Tenant Board.

If at any within the first year after the tenant vacates the unit, the landlord lists the rental to other renters, enters into a tenancy agreement, demolishes the rental or converts the rental unit, the Rental Fairness Act will determine the termination was done in bad faith, and the tenant may apply to the Landlord and Tenant Board within a year for:

  • All or a portion of any increased rent incurred for a one-year period after vacating the rental unit;
  • Out-of-pocket moving expenses, storage fees
  • Abatement of rent
  • Administrative fines for an amount up to $25,0000

By introducing this compensation condition and requiring landlords to rebut the presumption of bad faith, the Rental Fairness Act will hopefully deter landlords from illegally evicting tenants from rental units.

Exceeding guideline rent increase

A landlord could apply to the Landlord Tenant Board for an above-guideline rent increase on the terms that there was an “extraordinary increase” in taxes or utilities. Landlords can no longer impose above an above average guideline rent increase on account of utility costs. Landlords must also submit items in an outstanding work order relating to one or more elevators in the building. This amendment is to prevent landlords from raising rent costs when they have failed to keep their elevators in a state of working order for tenants. Landlord lawyers Toronto feel there will be many landlord and tenant board appeals in the coming months.

The Rental Fairness Act signifies a major step in the right direction for Ontario.  Renters in Ontario still remain vulnerable to massive rent hikes in between tenancies. Knowing your rights as a renter is key to not being taken advantage of by landlords and co-ops.