Rent Control Laws – Canada

Back in 2017, the Ontario government changed the rent control laws across the province to include all rental units. Before this new law came to be, rent control across the province only applied to units built prior to November 1 ^st , 1991. Many tenants may not be aware of this new law, and many landlords may not be implementing it. Here are a few things you should know about the most recent changes to the rent control law.

Changes came into effect on April 20 ^th , 2017
This means that regardless of when your rental until was built, your landlord cannot increase the rent by more than 1.5 per cent this year, regardless of inflation. However, this does not apply to anyone who was given legal rent increase notification prior to April 20 ^th , 2017. So if your landlord increased your rent by more than this before this date, unfortunately the law will protect them and it will stand. Any rental increase on or after April 20 ^th can’t be more than 1.5 per cent in 2017. Note that the maximum cap is at 2.5 per cent per year, with the percentage being different each year.

A landlord can increase the rent between tenants
Regardless of when a new lease begins, a landlord has the right to increase the rent between tenants, they just cannot legally do so for more than 1.5 per cent with the same tenant. So if you are moving out of your dwelling and, for example, recommend it to a friend or colleague, your landlord has every right to increase the rent by whatever amount he/she wants for the new tenant.

Who will this apply to?
This new law will apply to any tenant in the province of Ontario that rents a private rental unit. It does not apply to student housing (dorms), nursing homes or co-op housing. These do not qualify as private dwellings, as there are shared common areas. It does, however, apply to most retirement homes, as they are, in most cases, completely private units.

Are there special circumstances?
Yes, there are. But a landlord has to apply with the Landlord and Tenant Board if they wish to increase the rent by more than the legal amount. This can be done when there is an extraordinary increase in municipal taxes or the operating costs of safely maintaining the unit have significantly increased. This also includes major repairs that need to be done to the unit or the entire complex. But the landlord can only raise the rent once every 12 months, regardless, and must give 90 days’ written notice. For capital expenses, a landlord may be able to increase the rent to up to 3 per cent if approved by the board.

Does the new law protect bidding wars?
Unfortunately it does not. So if there is a rental until advertised for $1,800 per month and an applicant offers the landlord $1,900 per month, the landlord has every legal right to accept the higher ‘bid’. 

Landlords and personal use
A landlord can legally notify a tenant that they need to vacant the unit, as they wish to use it themselves. But the new provincial law says that the landlord must adequately compensate the tenant. This means that they are responsible for moving costs, and, in some cases, may have to pay the tenant if they can’t find a suitable dwelling for the same monthly rental rate. This will then cover the extra expenses that the tenant will be faced with. Part of the reason that this has changed is that often, in the past, a landlord would notify the tenant that they were going to use the unit for personal use so that they could then turn around and rent the unit for a higher rate. So this new law will hopefully stop this from happening.

Increased taxes for non-residents
What this means is that non-residents that never set foot in Ontario, but own properties for the sole purpose of renting them for profit, will see their taxes increase by 15 per cent. This is to protect and encourage new home buyers that live in the province and to encourage newcomers to purchase homes or rental units. This tax will apply to townhouses, semi-detached homes and condos that are purchased by non-resident foreigners for the purpose of making a profit.

Notification of rental increase
In addition to only being able to increase the rent by the said maximum amount per year (1.5% in 2017), the landlord must give 90 days’ written notice before the rent goes up. As well, the notice needs to be on a form that is set out by the Landlord and Tenant Board. As well, your landlord cannot raise the rent within the first 12 months of you living there, and any additional increases can only be implanted once every 12 months.

What to do if your landlord increases your rent by more than the legal amount
If your landlord notifies you of a rent increase that is above the legal amount, or has already charged you more, you can do one or both of the following:

• Fill out a form with the Landlord and Tenant Board to get your money back at: Tribunals Ontario
• contact the Rental Housing Enforcement Unit (RHEU) at 1-888-772-9277 or 416-585-7214