On April 20, 2017, Ontario’s Fair Housing Plan was announced by the current Ontario government in an attempt to cool the housing market and make housing more affordable, particularly in the Greater Toronto Area (GTA). It has been widely reported that the average purchase price for all types of homes in the GTA has dropped significantly since the announcement.
Most of the attention on the housing affordability plan has been focused on the 15 percent Non-Resident Speculation Tax (NRST) imposed on the purchase or acquisition of an interest in residential real estate by a foreign individual, foreign corporation or a taxable trustee. The NRST only applies to residential real estate, containing one to six single family residences, located in the region around Toronto known as the Greater Golden Horseshoe which includes Barrie, Brant, Dufferin, Durham, Guelph, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York.
There are certain exemptions and rebates to the NRST available including circumstances where: (a) the foreign individual jointly purchases the property with a spouse who is a Canadian citizen or permanent resident of Canada; (b) the foreign individual becomes a Canadian citizen or permanent resident of Canada within four years of the date of the purchase or acquisition; and (c) the foreign individual is a student who has been enrolled full-time at an approved institution for a continuous period of at least two years from the date of the purchase or acquisition.
However, it is important to note that Ontario’s Fair Housing Plan includes many more measures than just a tax on real estate purchases by foreign buyers. Some of these measures include amendments to the Residential Tenancies Act, 2006 which are already in force. These measures are targeted at providing additional protections to tenants by, for example, expanding rent control guidelines to include rental units built after November 1, 1991, ensuring all tenancy agreements are in a prescribed form, and prohibiting landlords from collecting or attempting to collect any amount of money purporting to be rent related to any period after the tenancy has terminated and the tenant has vacated the rental unit.
Significant amendments to the Residential Tenancies Act, 2006 became effective today on September 1, 2017, and are summarized as follows:
Notice of Termination by Landlord
Previously, the landlord could evict the tenant for the purpose of residential occupation by the landlord, a member of the landlord’s family or someone that provided care to the landlord or a member of the landlord’s family. Some landlords have used these provisions to evict tenants based on false pretences in order to circumvent rent control laws and re-rent the premises at a higher market rent.
The amendments now require the landlord (or other specified person) to occupy the residence for at least one year and to compensate the vacating tenant with one month’s rent on or before the eviction date, or offer an acceptable alternative rental unit. Corporate landlords are also prohibited from relying upon these provisions to evict the tenant.
If the landlord, during the minimum one year period, advertises the rental unit for rent, enters into a tenancy agreement with someone other than the former tenant, advertises the rental unit or the building it is in for sale, demolishes the rental unit or the building it is in, or takes any steps to convert the use of the rental unit or the building it is in, then it is presumed that the landlord acted in bad faith and will be exposed to orders to pay fines and compensation to the tenant for any increased rent and reasonable expenses incurred.