On March 12, 2020, Ontario’s Minister of Municipal Affairs and Housing introduced Bill 184, the Protecting Tenants and Strengthening Community Housing Act.
The new legislation officially passed on July 22, 2020, and has received Royal Assent. The changes will apply retroactively to March 17th, 2020. The legislation updates the Residential Tenancies Act, 2006 and Housing Services Act, 2011, and is designed to make it easier to resolve disputes between landlords and tenants.
If you’d like to read the full Act, you can find it on the Legislative Assembly of Ontario site here.
The goal of the legislation is to make it easier to resolve disputes while protecting tenants from unlawful evictions.
We regularly work with landlords and tenants and we think the new Act is a welcome update to the Residential Tenancies Act. Let’s review the different ways in which this new Act is better for landlords and for tenants.
Better for Landlords
- The Landlord and Tenant Board (hereafter just the Board) can order a tenant or former tenant to pay compensation to the landlord for the use and occupation of the rental unit after a notice of termination or an agreement to terminate the tenancy has taken effect if, the tenant or former tenant is or was in possession of the rental unit after the termination of the tenancy;
- The Board may order a tenant or former tenant to pay compensation to the landlord for the unpaid utilities that the tenant was required to pay under the terms of the tenancy agreement, while the tenant or former tenant is or was in possession of the rental unit. The costs referred are reasonable out-of-pocket expenses that the landlord has incurred or will incur as a result of a tenant’s or former tenant’s failure to pay utility costs that they were required to pay under the terms of the tenancy agreement;
- The Board may order a tenant or former tenant to pay compensation to the landlord reasonable costs that the landlord has incurred or will incur for the repair of or, where repairing is not reasonable, the replacement of damaged property while the tenant or former tenant is or was in possession of the rental unit, the tenant or former tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant or former tenant wilfully or negligently causes or caused undue damage to the rental unit or the residential complex;
- An increase in rent is deemed not to be void if the tenant has paid the increased rent in respect of each rental period for at least 12 consecutive months;
The above changes mean that there is finally some compensation for landlords who have faced tenants who use the Residential Tenancies Act to avoid paying rent and utilities for months or even years as they drag out the eviction process.
Better for Tenants
- Landlords are now required to compensate the tenant in the amount of one month’s rent for “no-fault” evictions;
- In addition, landlords must compensate a tenant in the amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if, the tenant receives notice of termination of the tenancy for the purposes of demolition or conversion to non-residential use. This rule also applies to the residential complex containing fewer than five residential units;
- The Board may order up to 12-month rent in compensation for eviction notices issued in bad faith or where the landlord does not allow the tenant to move back in after renovations or repairs;
- Maximum fine amounts for offences under the Act are doubled to $50,000 for an individual and $250,000 for a corporation;
- If a landlord brings an application for an order evicting a tenant based on unpaid rent arising from the period beginning on March 17, 2020, and ending on the prescribed date, the Board shall consider whether the landlord has attempted to negotiate an agreement with the tenant including terms of payment for the tenant’s arrears;
The above changes mean that landlords who have acted unfairly and used the letter of the law as an excuse to evict in order to bring in higher rent paying new tenants will face stiffer penalties. Which such bad actors are in the minority, they give landlords a bad name and changes that make it harder to act in bad faith are a welcome change.
In addition to the specifics listed above, the Landlord and Tenant Board must now consider whether a landlord tried to negotiate a repayment agreement with a tenant before it can issue an eviction order for non-payment of rent related to COVID-19.
As well, certain disputes, such as those related to unpaid utility bills, will shift from Small Claims Court to the Board.
In a related matter, the province’s residential eviction ban will end when Ontario’s state of emergency legislation expires. However, Ontario’s Superior Court of Justice published an amendment extending that deadline until the end of the calendar month in which the state of emergency is terminated.
As such, the provincial order suspending residential evictions in response to the pandemic will end on July 31, 2020.
If you are in need of help buying or renting out your investment properties, make sure you work with agents who understand the new rules and who can advise you on how to best manage your income property.