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No more rent control for new apartments

 
Rental Apartment

The following excerpt is taken from On the Radar newsletter from CLEO.

The provincial government is allowing landlords of new apartments to raise the rent by any amount.

Rent control basics

Most rented homes in Ontario are covered by 3 rules about rent increases:

  1. The landlord must wait at least one year between increases.

  2. The landlord must give the tenant at least 90 days' written notice of any increase.

  3. The increase can't be more than the provincial rent guideline for that year, unless the landlord gets approval from the Landlord and Tenant Board. For 2019, the guideline is 1.8%.

It's the last rule that's now been taken off most new rental units. This means that those units are exempt from the rent guideline.

Which rental units are no longer covered by the rent guideline?

The new exemption applies to many units created or first rented after November 15, 2018. That was the date the government announced this change.

The new law says that the following types of units are exempt from the rent guideline:

  • units in newly occupied buildings

  • units in newly occupied additions

  • new units in houses

Newly occupied buildings

If a building had no one living in it on or before November 15, 2018, all the units in it are exempt.

For example, this would apply if a building had only commercial tenants, such as a store or factory, before November 15, 2018. As long as the first people to live there moved in after November 15, all of the units people live in are exempt from the rent guideline.

Newly occupied additions

These are units in a new section that's added on to a building, if this addition had no one living in it on or before November 15, 2018.

For example, this could be a rental building built in 1974, with a new addition built in 2018. As long as the first people to live in the addition moved in after November 15, 2018, all of the units in the addition are exempt from the rent guideline.

But units in the original part of building continue to be covered by guideline.

New units in houses

These are self-contained apartments created in a house after November 15, 2018.

It must be a house that didn't contain more than 2 living units on or before that date. The house can be detached or semi-detached, or a townhouse or row house.

It must also meet certain other conditions.

For example, this could be a house that was built as a single-family home and was later divided into a main floor unit and an upstairs unit. The owner lives upstairs and rents out the main floor.

In March 2019, the owner gets the basement finished and creates an apartment there, with a kitchen, bathroom, and separate entrance. The new basement apartment is exempt from the rent guideline. But the main floor unit is still covered.

What does it mean if a unit is exempt?

Tenants who rent these units no longer have any legal protection against large rent increases.

At the end of their first year, and every year after that, their landlord can raise the rent as much as they want, as long as they give 90 days' written notice.

It's important that tenants renting new units know about this. A year after they move in, the rent could go up so much that they can't afford it. Then their only option may be to move out.

Less protection from unfair evictions

Being exempt from the rent guideline creates another danger for tenants.

A landlord might want to get rid of a tenant for reasons the law does not allow, for example because the tenant is asking for repairs to the apartment.

The landlord can't use this reason to give the tenant an eviction notice or to ask the Landlord and Tenant Board for an eviction order.

But now the landlord can try to force the tenant to move by raising the rent to a level that they know the tenant can't afford.

There was one situation in the past when the Board decided that a landlord could not do something like this. But the Board might make a different decision in future cases.

A tenant in this situation might want to get legal advice.

Getting legal help and advice

Steps to Justice has information about legal help for tenants.