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Nov 16
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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!

Nov 15
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Does A Landlord Have To Pay A Tenant To Move Back Into Their Own Home?

By Advice for Landlords, Video Blog

If you are a landlord in Ontario wanting to move back into your rental property, then this post is for you!

In the past, all you had to do was simply notify the tenant of your intention to move back in, and the tenancy would effectively come to an. (with proper notice of course)

Unfortunately, many (shady) landlords weren’t using this method in the most honest of ways.  Instead of moving back-in, some landlords would simply relist at a higher price. Naturally, this displaced many tenants resulting in unnecessary moves and extra costs.  The Ontario government quickly got wind of this and moved swiftly to shut the loophole down.

As of September 1st, 2017, the rules surrounding how and who can move back in have changed significantly. As per the Landlord Tenant Board: A landlord may apply to terminate a tenancy on the basis the rental unit is needed for use by the landlord, the landlord’s family member, or a person who provides or will provide care services to the landlord or landlord’s family. Notice how they didn’t say cousins or even siblings? It must only be an immediate family member, and the move must be in “good faith”.

You also to compensate the tenant for displacing them. Yes, you read that right – landlords now have to: compensate the tenant in an amount equal to one month’s rent or offer another rental unit acceptable to the tenant.

Examples of Evicting a Tenant as Bad Faith

Some examples the board provides of termination in bad faith include:

  1. advertises the rental unit for rent;
  2. enters into a tenancy agreement in respect of the rental unit with someone other than the former tenant;
  3. advertises the rental unit, or the building that contains the rental unit, for sale;
  4. demolishes the rental unit or the building containing the rental unit; or
  5. takes any step to convert the rental unit, or the building containing the rental unit, to use for a purpose other than residential premises.

These provisions only apply during the period that begins on the date the landlord gave the tenant the notice and ends one year after the former tenant moves out of the unit.

Fines or Remedies

If a landlord is caught breaking the rules, the LTB may order the landlord to pay:

  1. a specified sum to the 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;
  2. reasonable out-of-pocket moving, storage and other like expenses that the former tenant has incurred or will incur;
  3. an order for abatement of rent;
  4. an administrative fine not exceeding the greater of $25,000 and the monetary jurisdiction of the Small Claims Court; or,
  5. any other order that the LTB considers appropriate.

Steps a Landlord Must Take to Move Back Into Their Rental Property

If you and your family truly do need to move back into a rental property – make sure you follow all the correct procedures:

  1. Give proper notice.
  2. Compensate the tenant in an amount equal to one month’s rent or offer another rental unit acceptable to the tenant.
  3. Ensure only you or an allowable family member is moving back in and that the move is being done “in good faith”

With a max fine of up to $25,000, going about it in the wrong way is no slap on the wrist! Full details can be viewed on the Landlord Tenant Board website… and of course, none of this is to be taken as legal advice – just my experience in the wild world of Toronto Real Estate.

Happy Real Estating!

Oct 22
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Can a Landlord Refuse to Rent to a Person who has a Pet in Toronto?

By Advice for Landlords, Video Blog

Can a Landlord Refuse to Rent to a Person who has a Pet?

Yes! In Ontario, a landlord can refuse to rent to their property a person who has a pet… however, once a lease has started, a Landlord cannot simply evict a tenant for having a pet.

Confused yet? Let me explain:

According to the Landlord and Tenant Board: “A landlord can refuse to rent to a person who has a pet.” They also mention that “A service animal is not considered a pet”  and therefore if a tenant with a service animal makes an application to rent, that isn’t grounds for a refusal.

 

Now here’s where things get tricky…

The board also says: “A tenancy agreement cannot forbid a tenant from having a pet. And once there is a tenancy agreement, a landlord cannot evict the tenant simply for having a pet. This is true even if they agreed that the tenant would not have a pet.”

What this means is that once a lease starts, a landlord cannot evict or prevent a tenant from getting a pet. It also means that any wording in an agreement to lease which prohibits a tenant from having a pet is unenforceable. Even if the tenant hid a pet from you in the application process (ie. lied about having any pets), you still cannot evict them for having one.

HOWEVER… there are certain situations that The Board lists for when a landlord can start the eviction process and they are:

  • the pet is making too much noise, damaging the unit or causing other tenants to have allergic reactions;
  • the breed or species is inherently dangerous (e.g. a tenant’s pit bull could be considered “inherently dangerous” even if it hasn’t bitten anyone);
  • the rules of the condominium corporation does not allow pets like the one tenant has.

The important distinction to make here is that a Landlord cannot evict the tenant just for having a pet, but rather only if a situation similar to the examples above occurs. 

Can the Landlord Charge the Tenant a Damage Deposit?

The short answer is NO, and this extends to pet deposits as well.  The Landlord and Tenant Board says the following:

A landlord cannot collect a damage deposit to pay for damage done to the unit. Also, a landlord cannot use the last month’s rent deposit to cover damages in the unit. The rent deposit can only be used for last month’s rent before the tenancy ends.

If the landlord finds that a tenant has damaged the unit or caused damage to the building, the landlord can give the tenant a notice of termination and/or ask them to pay for the damages. If the tenant doesn’t pay, the landlord can apply to have the LTB determine if there are damages and what should be done about them.

Tenants with Pets Summary

  • Before a lease starts, a landlord can deny a tenants application simply for having a pet (Service animals excluded since they are not considered pets).
  • A lease cannot contain any language that prevents a tenant from having or getting a pet.
  • Once a lease is signed, a landlord cannot evict a tenant just for having a pet. 
  • A landlord cannot charge a tenant with a pet any sort of additional deposit for having a pet.
Feb 12
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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.