Skip to main content
Tag

rental fairness act

Home rental ideas, loans, mortgages and real estate valuations for sale.

Doug Ford Scales Back Rent Control In Ontario – How Will It Impact The Market?

By Advice for Landlords, Video Blog

On November 15th, 2018 Doug Ford and the Conservative Government announced plans to scale back rent control in Ontario. The plan will reverse the April 2017 “Rental Fairness Act” originally put in place by Ontario’s then-Liberal government which expanded rent control to all private rental units in Ontario.

Who Will Be Impacted By The Changes to Rent Control?

The new policy will not impact all units in Ontario but rather all newly built units occupied AFTER November 15th, 2018. That means that if you’re planning on renting a unit that was built and occupied PRIOR to November 15th, 2018 – these changes will not impact you at all, and rent control will continue to be in place.  Units that are subject to rent control can only increase the monthly rental rate by a predetermined amount set by the government each year. For units without rent control – there is no cap for how much you can increase per year!

How Will The Loosening of Rent Control Impact The Market?

Our first reaction to the change was that this would be HUGE news for the pre-construction market. On the surface, a condo with no rent control seems very appealing to condo investors.  But digging (in the video below) a bit deeper, reveals that possibility of the opposite being true…  

 

With these new changes, Tenants will have a choice between living in a rent-controlled unit with relatively minor yearly increases, versus non-controlled rents that can spike to any amount each year.  Our assumption is that a tenant will be willing to pay more at the start of the lease in exchange for the stability and peace of mind that a rent-controlled unit will offer them. 

In 2017, Toronto saw a big jump in rental prices once the “Rental Fairness Act” came into effect. Since landlords knew they would be limited in how much they could increase the yearly rent, many came to market on the higher end in an effort to hedge against lost rental rates for units with long term tenants.  We anticipate a similar impact as there will be an even higher demand for units with rent control.

How Will Changes Impact Landlords and Condo Investors

If you are a landlord of a unit that is built and occupied AFTER November 15th, 2018, you have the option of increasing your rent by any amount, once, per 12 month period.

For landlords of units built and occupied BEFORE November 15th, 2018 the amount you’re allowed to increase per year shall continue to be capped by the yearly amount decided by the government.

When trying to decide if your unit is subject to rent control, it’s important to remember that the date your unit was built and occupied determine if it’s impacted by the changes, and that it has nothing to do with when a lease was signed.  

Lastly, remember that governments change… and just as the last one introduced rent control to all units, the same can happen in the next election.  Whether you invest in a rent-controlled condo or one with no control, make sure you examine the pros and cons of each carefully!

Hand writing on notepad

The Ontario Government Introduces New Standard Lease Agreements for Residential Rentals

By Advice for Landlords, Video Blog

The Ontario Government is introducing a new standard lease for all residential rental agreements in Ontario! All residential leases signed on or after April 20th, 2018 will have to be written on the new forms and this will include all single and semi-detached houses, apartment buildings, rented condominiums and secondary suites (such as basement apartments).

Where Can I Download a Copy of the New Lease Agreements?

You can download a free copy of the agreement from the Ontario Governments Website!

Why is the Government Introducing the New Standard Lease Agreement?

As part of the Ontario governments Fair Housing Strategy – they promised to overhaul the process and create a standardized lease agreement.  The purpose of the change is to make the wording of residential leases consistent across the province. For years, many agreements have included clauses and conditions that are not allowed in a lease as per the Residential Tenancies Act.

How Has The Wording Changed in the New Lease Agreements? 

The new agreements are written in a easy to understand language and go further in-depth than the current lease docs being used. It also outlines the rights and responsibilities of both tenants and landlords, and explains what can (and cannot) be included in a lease.
 
You may have been using the same lease for years, not knowing that the clauses and conditions in it were not allowed.  For example, the new agreement states that a landlord can only ask for a deposit equal to 1 month of rent. Many (us included), have made it standard practice to ask for First and Last month as a deposit.  Another example is in regards to the NSF charge a landlord can ask for when a cheque bounces.  We’ve seen leases that require a $50-200 fee – a sum that is way over the $20 allowed by The Act. The new agreements very clearly state that no more than $20 can be charged as a fee for Non Sufficient Funds.
Although these items may seem like a change – remember, these were the rules all a long – they weren’t very well enforced or made clear in past contracts.

Is This Going to Change Rental Values

It’s unlikely to have much of an impact (up or down) on values.  This is more a change of process as opposed to a change of policy.  

Are There Exceptions to Those who use the New Lease Agreements?

The standard lease form does not apply to most social and supportive housing, retirement and nursing homes, mobile home parks and land lease communities, or commercial properties. The government will develop separate standard leases to address these other types of residential tenancies.
 

Can I Still Add My Own Clauses to the New Standard Leases?

The 15th Clause of the new agreement states that a landlord and tenant can agree to additional terms provided the term are written in plain language and clear set out what the landlord or tenant must or must not do to comply with the term.  If a term conflicts with the Residential Tenancies Act, 2006 or any other terms set out in the lease, the term is void and cannot be enforced.