On July 21, 2020, the Protecting Tenants and Strengthening Community Housing Act, 2020 received royal asset. This Act made various amendments to the Building Code Act, 1992, the Housing Services Act, 2011, the Ontario Mortgage and Housing Corporation Repeal Act, 2020 and the Residential Tenancies Act, 2006. This article will discuss some of the amendments to the Residential Tenancies Act; the purpose of which is to strengthen protections for tenants while making it easier to be a landlord by helping landlords and tenants resolve disputes.
Repayment Agreements for COVID-19
On March 19, 2020, during COVID, the government had enacted an Order suspending residential evictions until the month when the state of emergency ended. The Landlord and Tenant Board (the “LTB”) also suspended eviction hearings unless the eviction related to an urgent matter, such as an illegal act or a serious impairment of safety.
But, tenants not absolved of their contractual obligation to pay their rent. For those that were unable to pay their rent, although evictions could not proceed, the tenants still incurred rental arrears. As such, when the eviction moratorium ended on August 1, 2020, many tenants faced large rental arrears and the possibility of eviction at that time.
To address this, section 83 of the Residential Tenancies Act now provides that before the LTB can issue an eviction order for non-payment of rent, it must consider whether the landlord tried to negotiate a repayment agreement with the tenant if the tenant incurred rental arrears between March 17, 2020 and the prescribed date (which has yet to be prescribed).
Landlords, however, cannot impose repayment agreements upon tenants and cannot evict tenants for refusing a repayment plan.
But, where the parties enter into a repayment agreement, and that agreement is approved by the LTB, the landlord can apply for an eviction order without notice to the tenant if the tenant fails to comply with the terms of the repayment plan. This only applies to repayment agreements that were approved by the LTB. If the repayment agreement was not approved by the LTB, then the landlord would be required to give notice of any eviction application.
The Government of Ontario has also passed legislation freezing rent at the 2020 rates – meaning landlords cannot increase their rent in 2021. The rent freeze ends on December 31, 2021. The landlord must give at least 90 days’ notice before increasing rent in 2022.
Prevents Unlawful Evictions
If a landlord wants to evict a tenant to use a unit themselves, they will now have to inform the LTB if they have done it before and the LTB will need to consider this when determining whether the landlord is giving notice in good faith. This will help adjudicators look for patterns and identify landlords that may be breaking the law and evicting tenants in bad faith. This amendment has not come into force yet though.
Landlords are also required to file an affidavit at the same time that they file for a no-fault eviction application so the tenant can obtain a copy in advance of the hearing.
Individuals that act in bad faith, or commit another offence under the Residential Tenancies Act, can now be fined up to $50,000. Corporations can be fined up to $250,000.
Compensation to Tenants for “No-Fault” Evictions
When tenants are evicted for reasons such as renovations, repairs or a home buyer’s own use, most landlords must offer compensation to the tenant. This requirement was expanded to landlords of buildings with 1 to 4 units and to landlords who evict a tenant on behalf of a home buyer who wants to use the unit themselves. These landlords are required to pay the tenant one month’s rent as compensation or, in some circumstances, offer an equivalent unit.
In addition, landlords who evict tenants to repair or renovate a unit must give the tenant the opportunity to move back in, at the same rent, before offering it to others. If they don’t, the landlord can be ordered to compensate the tenant. This compensation applies to bad faith “own use” evictions, where the landlord/purchaser does not use the unit themselves after the eviction.
This amendment, which has not yet taken affect, would allow the LTB to make the following orders:
- An order that the landlord pay a specified sum to the former tenant for all or any portion of any increased rent that the former tenant has incurred or will incur for a one-year period after vacating the rental unit.
- An order that the landlord pay a specified sum to the former tenant as general compensation in an amount not exceeding the equivalent of 12 months of the last rent charged to the former tenant. An order under this paragraph may be made regardless of whether the former tenant has incurred any actual expenses or whether an order is made under paragraph 2.
- An order that the landlord pay a specified sum to the former tenant for reasonable out-of-pocket moving, storage and other like expenses that the former tenant has incurred or will incur.
- An order for an abatement of rent.
- An order that the landlord pay to the Board an administrative fine not exceeding the greater of $10,000 and the monetary jurisdiction of the Small Claims Court.
- Any other order that the Board considers appropriate.
Once this amendment comes into force, the tenant would have 2 years from the date they vacated the unit in which to file a claim for compensation.
Streamlined LTB Process
Theoretically, allowing access to alternative dispute resolution services like mediation instead of a formal hearing, where appropriate, will make it easier to resolve certain disputes. To further encourage negotiated settlements, landlords who reach an agreement with a tenant for outstanding rent (where the agreement has been filed with and approved by the LTB) will not have to return to the LTB for an eviction hearing if the tenant breaches the repayment agreement.