Residential Tenancy Reform Consultation Paper

RESIDENTIAL TENANCY REFORM CONSULTATION PAPER
B. Landlords should have to tell the new tenants
what the previous rent was.
This could be done by requiring landlords to give new
tenants a copy of the last notice of rent increase (NORI)
they gave to the previous tenant, or the prior lease, or
some other stipulated legal document.
If a tenant believes their rent is unlawful, they would be
able to use this information as written evidence in making
an application to the Ontario Rental Housing (the Tribunal).
A penalty could be imposed if the landlord did not comply
with the requirement to give tenants this information. For
example, the tenant could be permitted to withhold rent
until the landlord provides this information.
If combined with options A or B from question 1 (no rent
increase or only guideline increase allowed) this process
would be relatively easy to administer, and both landlords
and tenants could easily understand it. However, it would
be more complicated for a landlord to demonstrate how
catch-up increases they are charging (option C) are lawful.
C. The provincial government should keep a list of the
rent in every apartment and rental house that the
new tenant can use to look up the previous rent.
A third option is to require landlords to register their rents
with the Tribunal. This would allow tenants to inquire
about the lawful rent for their unit at the Tribunal and
make an application if they believe that their rent is
unlawful. It would be the landlord’s responsibility to provide
rent information to the Tribunal, which would then
need to be verified with the tenant. A penalty could apply
to landlords who failed to provide this information.
This type of system was in effect in Ontario from 1987 to
1998. While it provided a way for many tenants and landlords
to check lawful rents, it was very costly to maintain
due to the volume of data to be collected, interpreted and
verified. There were significant backlogs and delays with
the verification of the data that was registered.
A further consideration with this approach is how often
landlords would be required to update this information.
Under the previous registry system, the “maximum rent”
(the rent charged on a starting date plus all allowable
increases, whether or not the landlord had taken them)
rather than the actual rent was tracked, which meant the
landlord only had to register once. Currently, the concept
of maximum rent does not apply to most units, and tracking
actual rents would be extremely difficult to implement
and enforce.
4. Should any class of rental accommodation be
exempt from regulation of new rents (e.g., smaller
buildings or luxury apartments)?
For some classes of rental housing, it may be less important
to regulate the rents of new tenants.
For example, buildings of fewer than four rental units
could be exempted from restrictions on how much rent
new tenants can be charged. This could mean that people
with basement apartments could rent them out at whatever
rent they choose once an existing tenant leaves (same
as current situation). As small landlords are less likely to be
professional property managers skilled at setting rents to
maximize their income, this may be appropriate.
On the other hand, the most affordable segment of the
rental market tends to be the secondary rental market
(rental units not specifically built for rental purposes). The
secondary rental market includes basement apartments,
duplexes and apartments over garages or stores. Demand
typically outstrips supply in the most affordable segment
of the rental market, which puts tenants at a disadvantage
when negotiating rents with landlords.
It could also be considered whether to regulate the starting
rents for new tenants who move into luxury rental units.
It could be argued that tenants who can afford higher-end
rental have sufficient housing options and do not really
need the protection of rent rules.
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