The McGuinty government is building stronger communities through proposed legislation that would reform the rental housing system and promote a healthy nvestment climate for Ontario's rental housing market, announced Minister of Municipal Affairs and Housing John Gerretsen.
"The McGuinty government is committed to ensuring Ontarians have a safe, secure and affordable place to live," said Gerretsen. "That's why we've introduced proposed legislation we believe is balanced and fair, would give tenants, who are often our most vulnerable, more protection while keeping our rental housing market strong."
The proposed Residential Tenancies Act, 2006 would, if passed, provide better protection for tenants and landlords, ensure fairer rent increases and promote investment in rental housing. The proposed legislation would:
- Eliminate the unfair eviction process, so that every tenant would have an opportunity to go to a hearing or mediation
- Base the annual rent increase guideline on a real cost indicator - the Consumer Price Index
- Ensure tenants receive the benefit of their energy conservation by enabling smart metering in buildings to promote energy efficiency
- Require rent reductions for tenants when utility costs go down, if a unit's rent had been increased to reflect high utility prices
- Require rent reductions for sitting tenants when a capital expenditure such as a new roof has been paid for
- Disallow all rent increases if a landlord has failed to maintain his/her building
- Create a fast-track eviction process for tenants who vandalize their units or buildings or cause serious problems when the apartment is in the landlord's home
- Continue to exempt rental units built since 1991 from rent controls, and allow new tenants and landlords to negotiate starting rents for all vacant units.
The proposed legislation represents the results of extensive consultations held in 10 cities that drew more than 5,000 submissions and reports from stakeholder groups, housing experts, tenants and landlords over the last two years.
"In response to concerns raised by both tenants and landlords, I am working to make the Ontario Rental Housing Tribunal more fair and accessible," said Gerretsen. "Our government is proposing to change the Tribunal's name to the Landlord and Tenant Board to reflect this new mandate."
The proposed legislation is just one way the McGuinty government is addressing the housing needs of Ontario families. Other parts of the government's integrated strategy to improve the availability, affordability and quality of housing in Ontario with a particular focus to helping vulnerable groups, such as low-income tenants, include:
- $301 million investment in the Canada-Ontario Affordable Housing Program
- $50 million per year for the Strong Communities Rent Supplement Program
- $14 million Rent Bank program.
"The McGuinty government is committed to investing in Ontario's prosperity," added Gerretsen. "The proposed Residential Tenancies Act would implement a fairer, more responsive rental housing system that would help build stronger communities across this province."
Disponible en français
www.mah.gov.on.ca
Backgrounder
-------------------------------------------------------------------------
THE CONTEXT FOR PROPOSED RESIDENTIAL TENANCIES ACT
QUEEN'S PARK - Proposed legislation that would reform the rental housing system and promote a healthy investment climate for Ontario's rental housing market has been introduced.
Ontario's Rental Housing Market
There are 1.35 million renter households in Ontario, representing 32 per cent of all households in the province.
Ontario's vacancy rate is high. In 2005, the rate was 3.7% and is projected to remain high until 2009. As well, vacancy rates are highest at the low end of the market - in Toronto, the 2005 vacancy rate for the least expensive apartments (the lowest 20 per cent of the housing market) was 5.5%.
At the same time, average rents are static or falling, increasing by only 0.7% in 2005. For the least expensive units as above, the 2005 average rent was just one dollar above the 2004 average.
Allowing market rents on vacant units contributes to investment in renewal of our existing housing stock.
Rent Reform Consultation
From 2004 to 2005, the Ministry of Municipal Affairs and Housing undertook a comprehensive consultation process, which included circulation of a consultation paper with a questionnaire on key issues, a rent reform website, public town hall meetings, and meetings with major landlord and tenant groups and housing experts.
The Ministry received approximately 1,200 phone inquiries, 5,000 completed questionnaires and 250 written submissions. Ten town hall meetings were held in Toronto, Kitchener, London, Ottawa, Thunder Bay, Sudbury, Kingston, and Hamilton, and some 1,500 people attended. In addition, 30 meetings were held with regional stakeholder groups across the province.
Concerns raised by both tenants and landlords included tenants evicted without a hearing, building maintenance, rising utility costs, above guideline increases, vandalism and issues related to mobile and care homes.
Ontario Ombudsman
The Ontario Ombudsman criticised the Tenant Protection Act in his 2002-03 and 2003-04 Annual Reports.
- The Ombudsman found it "unreasonable and improperly discriminatory" hat tenants are unable to receive rent reductions when utility costs decrease, although landlords can receive rent increases when utility costs rise.
- With regard to tenants being evicted under the Tenant Protection Act's default eviction process without a hearing or mediation, the Ombudsman wrote "such evictions may have disproportionate and oppressive consequences for vulnerable tenants."
The proposed Residential Tenancies Act, 2006 would remedy these issues.
Energy Conservation Responsibility Act, 2006
The Energy Conservation Responsibility Act, 2006 establishes a legislative framework for the installation of smart meters in Ontario homes and small businesses. The government has committed to installing 800,000 smart meters by 2007 and ensuring that smart meters are installed in all homes and small businesses by 2010.
The proposed Residential Tenancies Act, 2006 includes provisions to enable installations of smart meters in rental housing while protecting tenants.
Integrated Housing Strategy
The proposed Residential Tenancies Act, 2006 is part of the government's integrated strategy to create affordable housing choices for Ontarians.
- Canada-Ontario Affordable Housing Program will create more than 15,000 units of affordable housing and provide housing allowances for some 5,000 lower-income families in Ontario. The program provides units for vulnerable Ontarians such as victims of domestic violence, persons with mental illness, families on social assistance and the working poor.
- Ontario Rent Bank program promotes housing stability by helping low-income tenants avoid eviction for non-payment of rent due to an unforeseen crisis. Since 2004, 4,177 Ontario households have received assistance for short-term arrears and avoided eviction.
- Ontario Strong Communities Rent Supplement Program assists low-income households to obtain housing. To date, 6,670 low-income households have received rent supplements.
Disponible en français
www.mah.gov.on.ca
Backgrounder
-------------------------------------------------------------------------
HIGHLIGHTS OF THE PROPOSED RESIDENTIAL TENANCIES ACT
QUEEN'S PARK - Proposed legislation that would reform the rental housing system and promote a healthy investment climate for Ontario's rental housing market has been introduced.
Features of the proposed legislation are detailed below.
BETTER PROTECTION FOR TENANTS
- Better Ontario Rental Housing Tribunal Processes
- Elimination of the unfair eviction process: Every tenant facing eviction would have access to a hearing or mediation, and all issues relevant to landlord/tenant matters would be considered.
Currently, tenants can be evicted, without a hearing or mediation, if they fail to respond to an eviction application within five days.
- More understandable guideline: The annual rent increase guideline would be based on a real cost indicator - the Consumer Price Index.
- Renewed mandate: The Tribunal's name would be changed to the Landlord and Tenant Board to reflect its renewed mandate of fairness and accessibility for tenants and landlords.
- Better notice: The Board, when possible, would send an information notice about the eviction hearing process to a tenant upon a filing of an eviction application. Landlords would still be responsible for serving a formal "Notice of Hearing" to their tenants.
- User-friendly forms: A pamphlet with information on the responsibilities of landlords and tenants, the role of the Board and the Board's contact information would be given to all tenants at the start of their tenancies.
- Protection from excessive above guideline increases
Under the Tenant Protection Act, landlords can apply for above guideline rent increases to help pay for capital expenditures. Under the current rules for above guideline increases: no rent reductions are given to tenants when capital items are paid for; landlords can receive management allowances and high interest rates for their investments; landlords can pass up to 4% per year to tenants with no maximum of the number of years; and landlords can sometimes pass on the costs of regular maintenance, such as painting, to tenants.
Under the proposed legislation:
- Sitting tenants who experience an above guideline increase for capital expenditures would receive rent reductions when capital items are paid off.
- A test to determine whether capital expenditures were necessary would be required as part of a landlord's application for an above guideline increase.
- Capital expenditures would be more narrowly defined.
- The cap for an above guideline increase for capital expenditures would be set at 3% for a maximum of 3 years.
- Management cost allowances would be disallowed.
- Utilities - Fair treatment for tenants
The current act does not contain provisions to reverse rent increases for higher utility costs, if prices later decrease. This means tenants may continue to pay higher rents long after utility costs have declined. Under the proposed legislation, sitting tenants whose rents were increased would receive rent reductions when utility costs decrease, if their landlords had received an above guideline increase for higher utility costs.
- Smart meters - Conserving energy and protecting tenants
Under the current act, tenants can only receive rent relief when electricity costs are removed from the rent after appealing to the Tribunal. Landlords are not required to maintain the energy efficiency of appliances or buildings.
Under the proposed legislation, tenants who receive smart meters would:
- Receive an automatic rent reduction to remove electricity costs from their rent, so they wouldn't pay twice.
- Pay electricity bills based on individual electricity use.
- Be able to apply to the Landlord and Tenant Board for a remedy if their landlords failed to maintain the energy efficiency of appliances and buildings.
- Protection from rent increases when there are outstanding maintenance issues
The current act permits rents to be increased when work orders for repairs remain outstanding, or a landlord has failed to undertake basic maintenance.
Under the proposed legislation, tenants could apply to the Landlord and Tenant Board to stop all rent increases and above guideline increases if there were serious outstanding maintenance issues or work orders. In severe cases, tenants would pay all or portions of their rent to the Board until maintenance and repair issues were resolved.
- Protection for mobile home tenants
Under the Tenant Protection Act, tenants who reside in mobile homes must obtain their landlords' consent prior to assigning their tenancies. This means tenants may have difficulty ending their tenancies when their circumstances change.
Under the proposed legislation, tenants who reside in mobile homes would be allowed to assign their tenancies without prior landlord consent.
Tenants living in mobile homes would receive compensation of up to $3,000 from their landlords if their tenancies were terminated due to conversion or demolition of their mobile parks.
- Protection for care home residents
Under the proposed legislation, the period required to end care services or meals would be 10 days.
Tenants living in care homes would receive a temporary rent reduction if their landlords failed to provide a written lease.
BETTER PROTECTION FOR LANDLORDS
- Protection from tenants who cause wilful and excessive damage
Under the current act, it can take a landlord more than 30 days to evict a tenant who is causing wilful damage, or interfering with a landlord's reasonable enjoyment in the case of a unit located in a landlord's home.
Under the proposed legislation, landlords could 'fast-track' evictions of such tenants.
This includes shortening the termination notice period from 20 to 10 days, not allowing tenants to void the notice of eviction by repairing the damage, and in cases of excessive wilful damage, ordering immediate eviction.
- Lower fees
It is proposed that the fee for Above Guideline Increase applications and fees for other Landlord and Tenant Board services would be reduced.
- Fair interest rates on rent deposits
Under the current act, a landlord is required to pay 6% interest on last month's rent deposit.
Under the proposed legislation, interest paid on last month's rent deposits would be based on the Ontario Consumer Price Index. Landlords would be able to retain interest earned on last month's deposits to top up the last month's rent as required.
HEALTHY INVESTMENT CLIMATE
- Exemptions from proposed legislation
Under the proposed legislation, rental units built after 1991 would remain exempt from the annual rent increase guideline.
- Market rent for vacant units
Under the proposed legislation, landlords and new tenants would continue to negotiate starting rents.
- Transparent calculation for annual rent increase guideline
Under the Tenant Protection Act, the guideline is based on a calculation of eight operating costs, averaged over a three-year period.
Under the proposed legislation, the annual rent increase guideline would be based on the Ontario Consumer Price Index. The index would be averaged over the most recent 12-month period prior to the publication of the guideline.
- More flexibility to discount rents
Under the current act, landlords can offer a discount of only up to one month's rent.
Under the proposed legislation, discounting rules for rent would be expanded to allow landlords to offer up to three months' free rent. Landlords could also provide a discount of up to 2% for prompt payment of rent.
Disponible en français
For more information visit www.mah.gov.on.ca 4
The McGuinty government is building stronger communities through proposed legislation that would reform the rental housing system and promote a healthy nvestment climate for Ontario's rental housing market, announced Minister of Municipal Affairs and Housing John Gerretsen.
"The McGuinty government is committed to ensuring Ontarians have a safe, secure and affordable place to live," said Gerretsen. "That's why we've introduced proposed legislation we believe is balanced and fair, would give tenants, who are often our most vulnerable, more protection while keeping our rental housing market strong."
The proposed Residential Tenancies Act, 2006 would, if passed, provide better protection for tenants and landlords, ensure fairer rent increases and promote investment in rental housing. The proposed legislation would:
- Eliminate the unfair eviction process, so that every tenant would have an opportunity to go to a hearing or mediation
- Base the annual rent increase guideline on a real cost indicator - the Consumer Price Index
- Ensure tenants receive the benefit of their energy conservation by enabling smart metering in buildings to promote energy efficiency
- Require rent reductions for tenants when utility costs go down, if a unit's rent had been increased to reflect high utility prices
- Require rent reductions for sitting tenants when a capital expenditure such as a new roof has been paid for
- Disallow all rent increases if a landlord has failed to maintain his/her building
- Create a fast-track eviction process for tenants who vandalize their units or buildings or cause serious problems when the apartment is in the landlord's home
- Continue to exempt rental units built since 1991 from rent controls, and allow new tenants and landlords to negotiate starting rents for all vacant units.
The proposed legislation represents the results of extensive consultations held in 10 cities that drew more than 5,000 submissions and reports from stakeholder groups, housing experts, tenants and landlords over the last two years.
"In response to concerns raised by both tenants and landlords, I am working to make the Ontario Rental Housing Tribunal more fair and accessible," said Gerretsen. "Our government is proposing to change the Tribunal's name to the Landlord and Tenant Board to reflect this new mandate."
The proposed legislation is just one way the McGuinty government is addressing the housing needs of Ontario families. Other parts of the government's integrated strategy to improve the availability, affordability and quality of housing in Ontario with a particular focus to helping vulnerable groups, such as low-income tenants, include:
- $301 million investment in the Canada-Ontario Affordable Housing Program
- $50 million per year for the Strong Communities Rent Supplement Program
- $14 million Rent Bank program.
"The McGuinty government is committed to investing in Ontario's prosperity," added Gerretsen. "The proposed Residential Tenancies Act would implement a fairer, more responsive rental housing system that would help build stronger communities across this province."
Disponible en français
www.mah.gov.on.ca
Backgrounder
-------------------------------------------------------------------------
THE CONTEXT FOR PROPOSED RESIDENTIAL TENANCIES ACT
QUEEN'S PARK - Proposed legislation that would reform the rental housing system and promote a healthy investment climate for Ontario's rental housing market has been introduced.
Ontario's Rental Housing Market
There are 1.35 million renter households in Ontario, representing 32 per cent of all households in the province.
Ontario's vacancy rate is high. In 2005, the rate was 3.7% and is projected to remain high until 2009. As well, vacancy rates are highest at the low end of the market - in Toronto, the 2005 vacancy rate for the least expensive apartments (the lowest 20 per cent of the housing market) was 5.5%.
At the same time, average rents are static or falling, increasing by only 0.7% in 2005. For the least expensive units as above, the 2005 average rent was just one dollar above the 2004 average.
Allowing market rents on vacant units contributes to investment in renewal of our existing housing stock.
Rent Reform Consultation
From 2004 to 2005, the Ministry of Municipal Affairs and Housing undertook a comprehensive consultation process, which included circulation of a consultation paper with a questionnaire on key issues, a rent reform website, public town hall meetings, and meetings with major landlord and tenant groups and housing experts.
The Ministry received approximately 1,200 phone inquiries, 5,000 completed questionnaires and 250 written submissions. Ten town hall meetings were held in Toronto, Kitchener, London, Ottawa, Thunder Bay, Sudbury, Kingston, and Hamilton, and some 1,500 people attended. In addition, 30 meetings were held with regional stakeholder groups across the province.
Concerns raised by both tenants and landlords included tenants evicted without a hearing, building maintenance, rising utility costs, above guideline increases, vandalism and issues related to mobile and care homes.
Ontario Ombudsman
The Ontario Ombudsman criticised the Tenant Protection Act in his 2002-03 and 2003-04 Annual Reports.
- The Ombudsman found it "unreasonable and improperly discriminatory" hat tenants are unable to receive rent reductions when utility costs decrease, although landlords can receive rent increases when utility costs rise.
- With regard to tenants being evicted under the Tenant Protection Act's default eviction process without a hearing or mediation, the Ombudsman wrote "such evictions may have disproportionate and oppressive consequences for vulnerable tenants."
The proposed Residential Tenancies Act, 2006 would remedy these issues.
Energy Conservation Responsibility Act, 2006
The Energy Conservation Responsibility Act, 2006 establishes a legislative framework for the installation of smart meters in Ontario homes and small businesses. The government has committed to installing 800,000 smart meters by 2007 and ensuring that smart meters are installed in all homes and small businesses by 2010.
The proposed Residential Tenancies Act, 2006 includes provisions to enable installations of smart meters in rental housing while protecting tenants.
Integrated Housing Strategy
The proposed Residential Tenancies Act, 2006 is part of the government's integrated strategy to create affordable housing choices for Ontarians.
- Canada-Ontario Affordable Housing Program will create more than 15,000 units of affordable housing and provide housing allowances for some 5,000 lower-income families in Ontario. The program provides units for vulnerable Ontarians such as victims of domestic violence, persons with mental illness, families on social assistance and the working poor.
- Ontario Rent Bank program promotes housing stability by helping low-income tenants avoid eviction for non-payment of rent due to an unforeseen crisis. Since 2004, 4,177 Ontario households have received assistance for short-term arrears and avoided eviction.
- Ontario Strong Communities Rent Supplement Program assists low-income households to obtain housing. To date, 6,670 low-income households have received rent supplements.
Disponible en français
www.mah.gov.on.ca
Backgrounder
-------------------------------------------------------------------------
HIGHLIGHTS OF THE PROPOSED RESIDENTIAL TENANCIES ACT
QUEEN'S PARK - Proposed legislation that would reform the rental housing system and promote a healthy investment climate for Ontario's rental housing market has been introduced.
Features of the proposed legislation are detailed below.
BETTER PROTECTION FOR TENANTS
- Better Ontario Rental Housing Tribunal Processes
- Elimination of the unfair eviction process: Every tenant facing eviction would have access to a hearing or mediation, and all issues relevant to landlord/tenant matters would be considered.
Currently, tenants can be evicted, without a hearing or mediation, if they fail to respond to an eviction application within five days.
- More understandable guideline: The annual rent increase guideline would be based on a real cost indicator - the Consumer Price Index.
- Renewed mandate: The Tribunal's name would be changed to the Landlord and Tenant Board to reflect its renewed mandate of fairness and accessibility for tenants and landlords.
- Better notice: The Board, when possible, would send an information notice about the eviction hearing process to a tenant upon a filing of an eviction application. Landlords would still be responsible for serving a formal "Notice of Hearing" to their tenants.
- User-friendly forms: A pamphlet with information on the responsibilities of landlords and tenants, the role of the Board and the Board's contact information would be given to all tenants at the start of their tenancies.
- Protection from excessive above guideline increases
Under the Tenant Protection Act, landlords can apply for above guideline rent increases to help pay for capital expenditures. Under the current rules for above guideline increases: no rent reductions are given to tenants when capital items are paid for; landlords can receive management allowances and high interest rates for their investments; landlords can pass up to 4% per year to tenants with no maximum of the number of years; and landlords can sometimes pass on the costs of regular maintenance, such as painting, to tenants.
Under the proposed legislation:
- Sitting tenants who experience an above guideline increase for capital expenditures would receive rent reductions when capital items are paid off.
- A test to determine whether capital expenditures were necessary would be required as part of a landlord's application for an above guideline increase.
- Capital expenditures would be more narrowly defined.
- The cap for an above guideline increase for capital expenditures would be set at 3% for a maximum of 3 years.
- Management cost allowances would be disallowed.
- Utilities - Fair treatment for tenants
The current act does not contain provisions to reverse rent increases for higher utility costs, if prices later decrease. This means tenants may continue to pay higher rents long after utility costs have declined. Under the proposed legislation, sitting tenants whose rents were increased would receive rent reductions when utility costs decrease, if their landlords had received an above guideline increase for higher utility costs.
- Smart meters - Conserving energy and protecting tenants
Under the current act, tenants can only receive rent relief when electricity costs are removed from the rent after appealing to the Tribunal. Landlords are not required to maintain the energy efficiency of appliances or buildings.
Under the proposed legislation, tenants who receive smart meters would:
- Receive an automatic rent reduction to remove electricity costs from their rent, so they wouldn't pay twice.
- Pay electricity bills based on individual electricity use.
- Be able to apply to the Landlord and Tenant Board for a remedy if their landlords failed to maintain the energy efficiency of appliances and buildings.
- Protection from rent increases when there are outstanding maintenance issues
The current act permits rents to be increased when work orders for repairs remain outstanding, or a landlord has failed to undertake basic maintenance.
Under the proposed legislation, tenants could apply to the Landlord and Tenant Board to stop all rent increases and above guideline increases if there were serious outstanding maintenance issues or work orders. In severe cases, tenants would pay all or portions of their rent to the Board until maintenance and repair issues were resolved.
- Protection for mobile home tenants
Under the Tenant Protection Act, tenants who reside in mobile homes must obtain their landlords' consent prior to assigning their tenancies. This means tenants may have difficulty ending their tenancies when their circumstances change.
Under the proposed legislation, tenants who reside in mobile homes would be allowed to assign their tenancies without prior landlord consent.
Tenants living in mobile homes would receive compensation of up to $3,000 from their landlords if their tenancies were terminated due to conversion or demolition of their mobile parks.
- Protection for care home residents
Under the proposed legislation, the period required to end care services or meals would be 10 days.
Tenants living in care homes would receive a temporary rent reduction if their landlords failed to provide a written lease.
BETTER PROTECTION FOR LANDLORDS
- Protection from tenants who cause wilful and excessive damage
Under the current act, it can take a landlord more than 30 days to evict a tenant who is causing wilful damage, or interfering with a landlord's reasonable enjoyment in the case of a unit located in a landlord's home.
Under the proposed legislation, landlords could 'fast-track' evictions of such tenants.
This includes shortening the termination notice period from 20 to 10 days, not allowing tenants to void the notice of eviction by repairing the damage, and in cases of excessive wilful damage, ordering immediate eviction.
- Lower fees
It is proposed that the fee for Above Guideline Increase applications and fees for other Landlord and Tenant Board services would be reduced.
- Fair interest rates on rent deposits
Under the current act, a landlord is required to pay 6% interest on last month's rent deposit.
Under the proposed legislation, interest paid on last month's rent deposits would be based on the Ontario Consumer Price Index. Landlords would be able to retain interest earned on last month's deposits to top up the last month's rent as required.
HEALTHY INVESTMENT CLIMATE
- Exemptions from proposed legislation
Under the proposed legislation, rental units built after 1991 would remain exempt from the annual rent increase guideline.
- Market rent for vacant units
Under the proposed legislation, landlords and new tenants would continue to negotiate starting rents.
- Transparent calculation for annual rent increase guideline
Under the Tenant Protection Act, the guideline is based on a calculation of eight operating costs, averaged over a three-year period.
Under the proposed legislation, the annual rent increase guideline would be based on the Ontario Consumer Price Index. The index would be averaged over the most recent 12-month period prior to the publication of the guideline.
- More flexibility to discount rents
Under the current act, landlords can offer a discount of only up to one month's rent.
Under the proposed legislation, discounting rules for rent would be expanded to allow landlords to offer up to three months' free rent. Landlords could also provide a discount of up to 2% for prompt payment of rent.
Disponible en français
For more information visit www.mah.gov.on.ca 4
The McGuinty government is building stronger communities through proposed legislation that would reform the rental housing system and promote a healthy
The Ontario Government has tabled a bill to oversee relations between tenants and landlords
