Residential Tenancies Act: Briefing Book - Michael Walker

Residential Tenancies Act, 2007
B R I E F I N G B O O K
Overview of the Residential Tenancies Act
RENT REDUCTIONS DUE TO MUNICIPAL TAX DECREASES
Automatic Rent Reductions due to municipal tax decreases (RTA sections 131-133)
� The RTA allows residential tenants to automatically reduce their rents when the rental
residential building in which they live has experienced a property tax decrease of
more than 2.49 per cent between the two prior consecutive years. The law requires
municipalities to provide notices to landlords and tenants if their buildings are subject
to an automatic rent reduction. The notices must be sent if there are more than six
rental residential units in a building (i.e. multi-residential rental properties). In 2001,
Council adopted a policy that the notice must also be sent to buildings with six or
fewer units (i.e. residential rental properties), to ensure that tenants in smaller rental
buildings have the same opportunity as tenants in multi-unit buildings to
automatically reduce their rents.
� The notices must be sent to landlords by September 15 and to tenants by December
15 each year. Tenants who are eligible for automatic rent reductions can reduce their
rent effective December 31 of the year they receive the notice. Generally the
reduction is applied beginning with the January rent payment.
Amount of Rent Reduction
� The amount of the rent reduction for multi-residential class properties (i.e. properties
with more than 6 units) is equal to 20 per cent of the percentage tax reduction. For
example, if property taxes were reduced by 10 per cent, the tenant would be permitted
to reduce their rent by 2 per cent (10 per cent x 20 per cent = 2 per cent).
� The amount of automatic rent reduction for residential class properties (i.e. properties
with 6 units or less) is equal to 15 per cent of the tax decrease percentage.
� The 20 per cent and 15 per cent figures are set by the RTA regulations, and cannot be
changed by the City.
The City’s role in notifying landlords and tenants
� The program notifying landlords and tenants of automatic rent reductions is jointly
implemented by the Revenue Services Division (RSD) and the Shelter, Support and
Housing Administration Division (SSHA). RSD manages the property tax database
and calculates the rent reduction amount, while SSHA develops communication
materials and resources, and manages the budget for the program.
� The City funds a tenant hotline operated by the Federation of Metro Tenants’
Associations (the FMTA) to respond to tenant inquiries on all matters concerning
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