Rental Fairness Act, 2017 now law
Formerly Bill 124, the Rental Fairness Act, 2017 passed the 3rd and final reading in the Legislature and received Royal assent on May 30, 2017. The new law is effective retroactively to April 20, 2017. The purpose of the Act is to amend the Residential Tenancies Act, 2006 which is the law governing the relationship between landlords and tenants in Ontario.
Perhaps not surprisingly, the RFA has evoked very different reactions from landlords and tenants. Tenants view it as much needed relief from abuses of the system by landlords while landlords generally see it as a further restriction of their rights and a blow to the pocket book.
The RFA amends the RTA in many small ways but the biggest changes have to do with:
- Landlord applications to the Landlord and Tenant Board to terminate a tenancy because the landlord requires the rental unit for the landlords own use.
- Annual rent increase rates
Historically, unscrupulous landlords would use an N12 Application (requesting a termination of the tenancy because the landlord required the rental unit for his/her own, or a family member’s use) as a catch-all application to rid themselves of an unwanted tenant for any number of reasons. An N12 application is not a “loophole” in the RTA and should not be used as such. The new Act makes it dangerous for a landlord to misuse an N12. Under the new law landlords must:
- Pay the tenant 1 months’ rent
- Actually use the rental unit for at least 1 year
If a landlord’s N12 application is not granted the tenant is required to repay the landlord, but if it is granted and the landlord does not occupy the rental unit for at least 1 year he/she may recive a “bad faith notice”.
Most rent increases are controlled by the guideline rental increase rate that is published annually. That is still the case but the new Act eliminates the exemption that previously existed for rental units built after 1991.
Landlords can still apply for an above-guideline increase but can no longer use increased utilities costs as the reason for the application.
Clearly, the rental landscape has changed. If you’re a landlord or a tenant, make sure you have competent, informed, and experienced legal professionals on your side before wading into RTA/RFA waters.
Read the new Act and Explanatory Note here.