How will the comprehensive changes to residential tenancy legislation in Canada impact renters and landlords?

COMPREHENSIVE CHANGES TO RESIDENTIAL TENANCY LEGISLATION IN CANADA: A BOON FOR RENTERS AND LANDLORDS

By: Susan Emam

Date: May 12, 2024

Federal Updates

The Federal government has recently announced updates to residential tenancy legislation that will provide greater protections for renters. These changes, part of the Canadian Renters’ Bill of Rights, aim to ensure fair and transparent relationships between tenants and landlords. The key changes include:

1. Requiring landlords to disclose a clear history of apartment pricing.

2. Crackdown on renovictions - a term used to describe when a landlord evicts tenants under the pretense of renovating, but does not actually carry out the renovations.

3. Creation of a nationwide standard lease agreement.

In addition to these changes, the government will also amend the Canadian Mortgage Charter to ensure that rent payments are included in renters' credit scores. This adjustment will allow renters to build their credit scores faster, leading to more affordable housing options.

Provincial Updates

At the provincial level, the government plans to introduce changes to the Residential Tenancy Act (RTA) and the Manufactured Home Park Tenancy Act. These amendments will provide more protection for growing families and deter bad faith evictions. The changes will include:

1. Protection for Families: The amendments will introduce a prohibition of rent increases for additional occupants who are minors. This means that there will no longer be rent increases above the annual allowable limit if a tenant adds a child under 19 to their household, even if there is a term in the tenancy agreement that allows it.

2. Deterrence of Bad Faith Evictions: The amendments will also aim to prevent bad faith evictions, a term used to describe evictions that are not based on legitimate reasons. The changes will introduce new requirements for landlords, ensuring that they have clear and justifiable reasons for evicting tenants.

3. Tenant Advocacy: To support tenants' rights, the government will launch a $15 million Tenant Protection Fund. This fund will provide financial support to tenants and their advocates, allowing them to challenge unfair rent increases, bad landlords, and renovictions.

These changes represent a significant step towards improving the rights and protections of tenants in Canada. They will help ensure fair and transparent tenancy agreements, prevent arbitrary rent increases, and deter bad faith evictions.

Deterrence of Bad Faith Evictions

The RTA currently allows termination of a tenancy where a landlord, landlord’s close family member, or property purchaser intends in good faith to occupy the unit. Section 51(2) provides that the landlord, close family member or purchaser must reside in the home for at least 6 months to demonstrate good faith. These sections will be amended to increase this occupancy

term from 6 months to 12 months. It will also increase the occupancy period when a landlord terminates a tenancy for their occupation of the rental unit, or a close family member, from 6 months to 12 months. The amendments will increase the tenant dispute time for Notice to End Tenancy from 15 days to 30 days.

Additional amendments to protect tenants from bad faith evictions include:

• increases in administrative monetary penalties for contravening the RTA;
  

• clarifications on the criteria by which the landlord could legally end a tenancy for a problematic tenant;

• increased amounts of compensation for evicting long-term tenants for landlord use;

• requirements of landlords to use a web portal to generate Notices to End Tenancy for personal occupancy;

• prohibit personal occupancy evictions for purpose-built rental buildings of five units or more; - frivolous Notices to End Tenancy;

• prohibition of converting rental units for specific non-residential uses (such as short-term rental accommodation or storage).

Looking Forward

The federal government has not currently specified when their amendments will be implemented. The proposed provincial amendments are projected to come into force in spring/summer of 2024. The OTLC will continue to monitor these residential legislative changes and provide updates on the OTLC blog. For a more visual breakdown of how the provincial amendments will alter specific sections of the RTA, view the chart below.

Amendment Comparison Breakdown

	Current RTA	Proposed Amendments
Protections for Families	Landlords are permitted to increase rent for additional occupants. Many landlords used this provision to increase rent for newborns and/or children that came to live with their guardians.	Prohibition of rent increase for additional occupants who are minors, and it will be an offence to do so. There will no longer be rent increases above the annual allowable limit if a tenant adds a child under 19 to their household, even if there is a term in the tenancy agreement that allows it.
Deterrence of Bad Faith Evictions	Section 49 allows termination of a tenancy where a landlord, landlord’s close family member, or property purchaser intends in good faith to occupy the unit. Section 51(2) provides that the landlord, close family member or purchaser must reside in the home for at least 6 months to demonstrate good faith. Section 49(6) allows a landlord to end a tenancy if the landlord has all the necessary permits and approvals and intends in good faith to demolish the unit, convert the unit for residential use, or convert the unit for non-residential use.	Prohibitions of: personal occupancy evictions in purpose-built rental buildings with five or more units; frivolous Notices to End Tenancy; and conversion of rental units for specific non-residential uses (such as short-term rental accommodation or storage).  There will also be: increases in administrative monetary penalties to improve deterrence from contravening the RTA; clarifications on the criteria by which the landlord could legally end a tenancy for a problematic tenant; increases in landlord’s occupancy period from 6 months to 12 months under Section 51(2); increases in amount of time tenant has to dispute a Notice to End Tenancy to 30 days;  increases in amounts of compensation for evicting long-term tenants for landlord use; and requirement of landlords to use a web portal to generate Notices to End Tenancy for personal occupancy.