Thursday, March 12, 2020

Changes to the RTA are Finally on the Way but Barely Sufficient

This just in.... On March 12, 2020 the government introcuded a Bill to amend the Residential Tenancies Act. Almost 2 years after they were elected, the Ford government has finally taking steps to deal with the Act's shortcomings.

The proposed Protecting Tenants and Strengthening Community Housing Act, 2020 is intended to update the Residential Tenancies Act, 2006, to put some clarity to certain issues, speed up the eviction process, and provide more balance so that landlords don't get so unfairly treated by the statute.

The proposed changes to the Residential Tenancies Act would strengthen some protections for tenants (mostly bad faith eviction provisions), make it easier to be a landlord (so they say), and help both landlords and tenants resolve disputes (I don't see it).

For those saying that after reading the Bill, the government has done nothing to help landlords, that they're only helping tenants with this new legislation, there is some truth to that.  Just look at the name of the bill, and the post-introduction spin by the government on the day after.

It's not that they did so much for tenants, but they did very little for landlords.

The added tenant provisions are mostly about bad faith eviction, and if a landlord lies to evict with an N12 or N13, they will and should be severely punished by the courts.  I have no issue with that.

The proposed changes to the RTA look pretty meager for landlords and for those of us doing our work at the LTB for landlords. Below is a brief summary of what's been published so far.

A landlord applying to evict for personal use using the N12 notice will now have to reveal all previous attempts made to evict by serving an N12.

The government gave tenants some benefit in terms of increases in penalties and compensation for N13 evictions for renovation as well as purchaser's family use N12 evictions.

The bill will now subject landlords with less than 5 rental units to the same compensation obligations on renoviction applications as large landlords, while prior to this bill there was no compensation application when an N13 notice was served for that purpose by small landlords.

Finally utility arrears will be recoverable in an application to the board where prior to the Bill utilities were considered to be outside the Board's jurisdiction.

Politically, the government had to give tenants something.  They had to make the changes appear balanced but in terms of process, eviction, clarification regarding utilities and post termination compensation now being actionable at the LTB, the end of the Price v Turnbull's Grove lawful rent confusion, getting rid of the draconian s.82 which allowed trial by ambush initiated by tenants, clarifying that a landlord can evict and recover damages that are not just physical damage, for instance when a tenant pulls a fire alarm; those things all needed attention.  But it's certainly not enough.

Here's what they "didn't" do.  There are no changes to  the voiding time of N4 notices for rent arrears, no direct application to the sheriff under s.78 when there is a breached condition in an order or agreement, no indication of any  changes that will speed up the eviction process.  

They didn't undo ANY of the hail Mary anti-landlord changes Premier Wynne made just prior to the last election. Not one!

The government seems to be trying to breath new life into the "never used" section 206 rent arrears repayment agreements, but that's dead for sure. Landlords didn't like it or use it in 2007 when it was introduced, and they won't use it now.

There are no changes allowing the use of bailiffs for eviction which was speculated.  There is no shortening of time to file with the Sheriff after an eviction order is issued.  

They didn't deal with the terrible N5 notice voiding confusion that most landlords trip over when proceeding to the LTB.  It appears that all they wanted to do was fix the Small Claims - LTB jurisdictional issues, fix (not remove) the terrible time-wasting section 82, and fix the Price v. Turnbull's Grove lawful rent confusion that arose out of a 2007 Ontario Court of Appeal decision.

There is nothing to help landlords not wanting pets in their units, nothing dealing with damage deposits although at least you can now go to the LTB for damage, unpaid rent or utilities AFTER the tenant vacates.  

Not a mention of marijuana use or Airbnb type operation by tenants which plague landlords.

The real issue is whether the Board will be able to speed up evictions if the tenant does not pay their rent.  If that doesn't occur, then these changes will do nothing for landlords.  There is nothing I see in the bill that will contribute to the process becoming more streamlined and efficient.

The proposed legislation would  have the  following effect according to the government's  background material.

By the way, there is nothing in the bill related to changes to rent control other than the changes made last year for new builds:

Prevent unlawful evictions: If a landlord wanted to evict a tenant to use a unit themselves, they would have to tell the Landlord and Tenant Board if they have done it before, which would help adjudicators look for patterns and identify landlords who may be breaking the law. Landlords would also have to file an affidavit at the same time as they file for a no-fault eviction application so the tenant can obtain a copy in advance of a hearing.

Compensate tenants for "no fault" evictions: When tenants are evicted for causes beyond their control most landlords must offer compensation. This requirement would be extended to landlords of buildings with one to four units who evict a tenant to renovate or repair the unit, and to landlords who evict a tenant on behalf of a home buyer who wants to use the unit themselves. These landlords would have to pay the tenant one month's rent.

Increase maximum fines: Amounts would increase from $25,000 to $50,000 for an individual and from $100,000 to $250,000 for a corporation convicted of an offence under the Act.

Increase tenant compensation for "bad faith" evictions: Landlords who evict tenants to repair or renovate a unit must give the tenant the opportunity to move back in (at the same rent) before offering it to others. If they don't, landlords can be ordered to compensate tenants. Currently, the landlord can be ordered to pay the difference between the old and new rent for up to a one-year period.

The proposed changes would give tenants two years to file a claim and increase the possible compensation by an additional full year's rent, up to a maximum of $35,000. The increased compensation would also apply to bad faith "own use" evictions (where the landlord/purchaser does not use the unit themselves).

Streamline Landlord and Tenant Board processes: Being able to access alternative dispute resolution services like mediation instead of a formal hearing, where appropriate, would make it easier to resolve certain disputes.

To encourage negotiated settlements, landlords who reach an agreement with a tenant on outstanding rent would not have to go back to the Landlord and Tenant Board for an eviction hearing, if the tenant breaches the repayment agreement

Similarly, requiring tenants to give advance notice of any new issues they want to raise at an eviction hearing would help everyone prepare and prevent hearings from being delayed or postponed.

Make it easier to be a landlord: Landlords would not have to submit documents to the Landlord and Tenant Board on a CD-ROM, tell tenants how old the fridge is and how much energy it uses, or give tenants a printed pamphlet that duplicates information in the standard lease.

It would also allow landlords a grace period who inadvertently use an older version of the lease when it is updated. Landlords seeking compensation for unpaid utilities, rent and/or damages from current or former tenants would have their disputes handled by the Landlord and Tenant Board, rather than the Small Claims Court.

It would also clarify that a tenant has 12 months to dispute a potentially improper rent increase notice, similar to other disputes.  This change will eliminate the terrible rent confusion that arose from a perverse decision called Price v. Turnbull's Grove from the Ontario Court of Appeal in 2007.  It's taken the government 13 years to fix this "drafting" issue.

Allow more tools for better enforcement of RTA offences: To improve enforcement processes, investigators would be allowed to get a court order to access financial records more easily in order to investigate offences relating to filing false or misleading information with the Landlord and Tenant Board. The admissibility in a prosecution of electronic documents retained by the Landlord and Tenant Board would be clarified. The ministry would also have more time to enforce the rules when a landlord fails to reimburse a tenant for a refundable key deposit.

Allow landlords to recover costs: When bad behaviour costs landlords money, such as tenants pulling the fire alarm for no reason, landlords would be able to apply to the Landlord and Tenant Board to recover their costs, rather than resorting to eviction.

Update land lease and mobile home rules: The proposed changes would allow landlords to maintain the health and safety of land lease communities and perform necessary maintenance by recovering the full cost of major infrastructure upgrades, like water and sewage systems, using above guideline rent increases without needing an order from a government authority. Changes would also ensure that these costs are paid within a reasonable timeframe. Since the maintenance requirements in a land lease community are different from other rentals, we will explore whether some types of maintenance costs should be treated separately from rent.

Allow greater flexibility for employers to provide employee housing: To help them attract top talent, employers would be able to offer their employees an affordable housing option closer to where they work, and opportunity to build equity through a land lease agreement that meets their unique needs.

The government's press release can be found here.

The bill, just published is here:

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