The Residential Tenancies Act, 2006

At the end of June 2012, there were several changes enacted with respect to the Residential Tenancies Act, 2006 which are now in force. For the calendar year 2014, the guideline for the maximum percentage increase for rents which do not require an application for approval from the Landlord Tenant Board was 4.08%, unless the Landlord receives approval by way of an application to the Landlord and Tenant Board for a larger increase. However, this maximum increase is subject to the following provisions in the Act:

Guideline increase

1. (1) No landlord may increase the rent charged to a tenant, or to an assignee under section 95, during the term of their tenancy by more than the guideline, except in accordance with section 126 or 127 or an agreement under section 121 or 123.

Guideline

(2) The Minister shall determine the guideline in effect for each calendar year as follows:

1. Subject to the limitation set out in paragraph 2, the guideline for a calendar year is the percentage change

from year to year in the Consumer Price Index for Ontario for prices of goods and services as reported monthly by Statistics Canada, averaged over the 12-month period that ends at the end of May of the previous calendar year, rounded to the first decimal point.

2. The Guideline for a calendar year shall be not more than 2.5 per cent.

This will be in effect for the next four years, following which the guideline to establish the annual maximum rent increase will be reviewed at that time.

Over the years, questions have arisen from clients, real estate agents, and lenders with respect to what properties, if any, are exempt from rent controls. The Residential Tenancies Act, 2006 contains the following provisions:

6.   Rules relating to rent

(2) Sections 104, 111, 112, 120, 121, 122, 126 to 133, 165 and 167 do not apply with respect to a rental unit if:

(a)   it was not occupied for any purpose before June 17, 1998;

(b) it is a rental unit no part of which has been previously rented since July 29, 1975; or

(c)   no part of the building, mobile home part or land lease community was occupied for residential purposes before November 1, 1991.

In summary, if the fact situation meets the criteria set out in paragraph 6 (2)(a) or 6 (2)(c), the property meets the test and is not subject to Rental Guidelines, i.e. no rent control. The sections are independent of each other so you do not have to meet all 3 criteria for the property to be exempt. Subsection (a) deals with new rental buildings, and subsection (c) deals with older buildings but first time rental residential uses in them. If there was ever any previous residential use of the property, then it is caught even though it was not a rental building (i.e. a house or owner occupied multi-residential property).

The policy behind this section is to encourage new construction of rental residential housing in a rent-controlled environment. In other words, rent up the property at lower rents to enable the Landlord to obtain their take out construction financing; then, increase the rents in subsequent years to raise them to the going market rental rates. I believe that without such a provision, no one would have an incentive to build rental housing.

However, if a house or apartment is vacant for any period of time, a Landlord can attempt to increase the amount of rent to such an amount as the market will bare and they can obtain; i.e. there is no limit on the amount of rental increase. The existing 1-year base period before the rent for an existing tenant can be increased remains the same; i.e. rent for an existing tenant can only be increased once each rental year. For further reference, the 2012 Rent Increase Guideline form is available on the Landlord and Tenant Board website (www.ltb.gov.on.ca) under the “Forms” section on the left sidebar.

The following is a list of the forms available from the Ontario Government website which you can download free of charge. As some of my clients are aware, I generally advise them that residential tenancy issues and disputes are, for the most part, something they can handle on their own without the need to hire a lawyer. While there are specific steps to be followed

under the Act in dealing with problems, the hearing process itself is, for the most part, much less formal.

Try to save yourself some money in legal fees!!!

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• Landlord Applications – these are the forms a landlord must use to make an application to the Board.

• Tenant Applications – these are the forms a tenant must use to make an application to the Board.

• Notices of Termination and Agreement Forms – these are the forms a landlord or a tenant must use to give a notice to end the tenancy.

• Notices of Rent Increase – these are the forms a landlord must use to tell a tenant that the rent will increase.

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Additional Forms:

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• L1/L9 Application – Information Update as of the Hearing Day
• Additional Services Available to You at Your Hearing
• Affidavit
• Agreement to Terminate a Tenancy – Form N11
• Certificate of Service
• Information from your Landlord about Utility Costs (Instructions)
• Information from your Landlord about Utility Costs [One of More Utilities are no longer       Provided in the Residential Complex](Instructions)
• Landlord Motion to Set Aside an Order to Void – Form S3
• Landlord’s Notice to the Spouse of the Tenant who Vacated the Rental Unit – Form N14
• Motion to Set Aside an Ex Parte Order – Form S2
• Request for Hearing Recording
• Request for the Board to issue a Summons
• Request to Amend an Order
• Request to Extend or Shorten Time
• Request to Re-open an Application
• Request to Reschedule
• Request to Review an Order
• Schedule of Parties
• Schedule of Parties for Multi-Tenant Applications
• Tenant Motion to Void an Eviction Order for Arrears of Rent and Affidavit
• Landlord’s Notice to a New Tenant About an Order Prohibiting a Rent Increase (Instructions)
• Request to Pay Rent to the Board on a Tenant Application About Maintenance
• Payment Agreement

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