Thursday, March 12, 2020

Changes to the RTA are Finally on the Way, but Completely Inadequate

On March 12, 2020 the government introduced a Bill to amend the Residential Tenancies Act.  Almost 2 years after they were elected, the Ford government has finally taking steps that it was hoped would 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 stated goal of the Protecting Tenants and Strengthening Community Housing Act is to strengthen 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 anywhere in the Bill).

After my reading of the changes, I would say that the government has done nothing to help landlords, and that they're only helping protect tenants with this new legislation.  Sure, the Government had to put some balance into the Bill.  They  had to give tenants some benefits for any bone they thew to landlords.  But rather than provide any benefits to landlords, the government basically gave them the finger.

Below is a brief summary based on the Bill as it currently stands.

The Bill adds a lot of tenant protection, mostly about bad faith evictions and no fault evictions.

If a landlord lies to evict with an N12 or N13 notice, they will and should be severely punished by the Board.  I have no issue with that.  But, the Bill adds compensation, in addition to moving costs and the increased rental cost the tenant incurs for one year after move-out, of up to an entire year's rent, regardless of whether the tenant has actually incurred any additional expenses.  That's too harsh.

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 compensation for N13 evictions for renovation as well as purchaser's family use N12 evictions.  The Bill subjects 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.

And the requirement for a month's compensation on N12 notices for "purchasers' use" now includes the requirement that one month's rent as compensation be paid to the tenant.  The Act currently only requires this for N12 terminations based on a landlord's (or family's) intended use.

The Government has done some things in terms of process...fixing what were frankly errors or omissions in the current version of the Act.

For example, there is finally clarification regarding utilities and post termination compensation which would now be actionable at the LTB.  The jurisdictional confusion and conflict with the Small Claims Court was appalling.  Utility arrears would be recoverable in an application to the Board where prior to the Bill, utilities were considered to be outside the Board's jurisdiction.  In addition, landlord applications for unpaid rent, filed "after" a tenant has vacated, will be permitted at the LTB.  Under the current Act, the remedy was dubious, although supposedly available through the Ontario Small Claims Court.

The Bill makes some "minor changes" to the draconian s.82 which allowed trial by ambush initiated by tenants. Under section 82, as re-enacted, a tenant may raise their issues only if the tenant complies with specified requirements (including giving of advance written notice of their intention to raise the issue) or provides an explanation satisfactory to the Board explaining why the requirements could not be met.

I'm  happy to see the Bill would clarify that a tenant has 12 months to dispute a potentially improper rent increase notice, after which time the rent is deemed to be legal if no dispute has been made.  This brings it in line with similar tenant claims.  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.  Under the current Act, rent increases that were void due to non-compliance with process could not be "saved" by the deeming provision in s.136.

Here's what the Bill "didn't" do.  There are no changes to  the voiding time period 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.  

The Bill doesn't clarify whether or not the landlord can evict and/or recover damages that are not just physical damage in nature.  For instance when a tenant pulls a fire alarm and costs are incurred, or a landlord receives a fine because of a tenant's refuse left at the curb, those damages are not technically compensable under the RTA.  That was missed.

The Bill doesn'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 commercial bailiffs for eviction after obtaining an LTB eviction order.  There is no shortening of the time period to file with the Sheriff after an eviction order is issued.  

The Bill doesn't deal with the terrible N5 notice voiding confusion that most landlords trip over when proceeding to the LTB. 

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 post-occupation damage, unpaid rent or utilities AFTER the tenant vacates.  

Not a mention in the Bill 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.

I could summarize by saying that there is lots for tenants in the bill and nothing for landlords except clarification of process...fixing things that were broken.  These include the Small Claims - LTB jurisdictional issues, repair (not remove) the terrible time-wasting section 82, and finally a fix to the Price v. Turnbull's Grove lawful rent confusion.

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

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.

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.

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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