Statement
of Principles: New Landlord/Tenant and Rent Control Legislation
June 5, 2003
Legal Clinics' Housing Issues Committee (LCHIC)
Statement of Principles: New Landlord/Tenant and Rent Control Legislation
Preamble
The paramount purpose of the new Act should be included in a preamble to the legislation that recognizes the following legislative goals:
- to protect and
respect the rights and obligations of tenants and landlords;
- to provide a fair
and accessible process to resolve disputes between tenants and landlords,
including the right to mediation and adjudication of disputes;
- to promote the
resolution of disputes in a manner that recognizes the importance of
preserving a tenancy in every case in which the needs of both parties
can be addressed through measures other than eviction;
- to establish a
fair system for rent regulation that recognizes the need to maintain
an affordable housing stock while compensating landlords appropriately
for increases in the cost of operating and maintaining residential accommodation;
- to establish a new residential tenancies tribunal that will be composed of qualified adjudicators chosen through an open, competitive process.
Fair Eviction Application Process
The
legislation will mandate a mediation process for tribunal applications
that is designed to encourage the resolution of a high percentage of applications
through a mutually-satisfactory settlement agreement. [1]
The
default eviction application process will be replaced by a process that
schedules every application for a pre-hearing mediation and hearing unless
the tenant files a Notice of Non-Dispute agreeing to vacate the premises
by the termination date.
The
legislation will explicitly recognize the goal of resolving eviction applications
in a manner that satisfies the needs of both parties, including the interest
of the renter household in maintaining their tenancy and the interest
of the landlord in receiving an appropriate remedy.
Security of Tenure and Relief Against Forfeiture
New
legislation will expressly require that tribunal members must consider
in all eviction applications whether it would be appropriate to exercise
their discretion to not order eviction.
In
exercising that discretion, adjudicators will be required to consider
all the factual circumstances and whether the needs of both parties can
fairly be addressed with a remedy other than eviction.
In
exercising discretion in arrears evictions, the legislation will provide
that tribunal cannot evict if the adjudicator is satisfied that the tenant
has the ability to repay the arrears in a reasonable period of time and
has the ability, over the anticipated term of the tenancy or a reasonably
foreseeable period, to make rental payments in satisfaction of his/her
obligations under the tenancy agreement.
New
legislation will provide that a tribunal member must refuse an eviction
order in certain specified circumstances, including, for example, where
discrimination is a reason for the eviction application or where even
one reason for the application is that a tenant has brought an application
to the tribunal or has organized a tenants' association.
Rent Bank
The
legislation will make provision for the establishment of an adequately
funded provincial "rent bank", on site at the tribunal, to assist
tenants in repaying rent arrears while overcoming a temporary financial
crisis.
New Tribunal
The
legislation will establish a new rental housing tribunal comprised of
adjudicators chosen through an open and competitive process that values
relevant procedural and substantive experience, including prior experience
as a representative of tenants or landlords in legal disputes.
The
legislation will provide that the new tribunal will have mediation and
pre-hearing officers to assist the parties in reaching a negotiated settlement
that resolves the dispute to the mutual satisfaction of both parties and
in a manner consistent with legislated rights.
The
new tribunal will be committed to an consultative process similar to that
established by other Ontario adjudicative agencies in respect of stakeholder
groups. The memorandum of understanding between the Government and the
tribunal will set out significant expectations for tribunal performance
in this area, including the requirement that the tribunal would invite
stakeholder input on key aspects of its procedural regime, including the
development of tribunal rules of practice and interpretative guides.
The
new tribunal will be resourced at a level that will allow it to administer
quality adjudicative services, at a level consistent with other Ontario
tribunals, including funding and staffing that would allow the tribunal
to publish, in electronic form, a full database of its decisions.
Affordable rents
Temporary
legislation will freeze rents at current levels until a new permanent
rent control system is developed and implemented.
The
Government will open a consultation process to develop a new permanent
rent control system - without exceptions and not tied to vacancy rates.
That new system will recognize the affordability crisis for renter households
and will recognize increases in landlords' costs in operating and maintaining
rental residential housing, but will not award increases in profit margins
unrelated to cost increases.
The
new legislation will include, at minimum, the following basic rent regulation
features:
- rent controls permanently
applicable to all units - vacant and occupied; (i.e. removal of vacancy
decontrol provision)
- elimination of
applications for above-guideline rent increases for increases in utilities
costs;
- restoration of the right of tenants to apply for rent reductions when increased costs are no longer experienced by the landlord (i.e. "costs-no-longer-borne" provision applicable to utility costs and capital items).
Rental housing stock conditions
No
rent increases when there is an outstanding work order on the rental property.
Demolition and Conversion Controls
Amendments to the Municipal Act to strengthen the authority of municipalities to protect the existing affordable rental housing stock from demolition or conversion to condominium and other uses.
Housing Allowances
Housing cost assistance for working low-income families who are spending more than 50% of their income on housing, to cover the affordability gap up to a maximum amount.
Investment in Affordable Housing
Provincial funds to fully match federal funding of $245 million for new affordable rental housing stock.
Provincial commitment to meet projected need for new rental demand, currently estimated at 20,000 units annually by Canada Mortgage and Housing Corporation.
Supportive Housing
Provincial funding to meet need for supportive housing, currently estimated by supportive housing advocates to be 14,000 units province-wide.
Related Regulatory Changes: Increase to Ontario Works
Shelter Allowance
Increase the shelter allowance portion of Ontario Works benefits to cover the actual shelter costs of recipients.
Time frame for Reforms
Immediate:
- rent freeze
- repeal of "vacancy
decontrol" provision
- default orders
not to be issued until after the hearing date
- establishment of
a consultation process to shape the design of the new tribunal, to provide
the Government with input from tenant and landlord interests with respect
to key performance expectations
- consultation with landlord/tenant legal bar, including legal clinics, on the reform of the adjudication process for residential housing law disputes.
Short-term:
- Meaningful and
good faith consultation process on new rent regulation system.
First
phase: Release of consultation/discussion paper with outline of
proposed new rent regulation act, including an explanation of proposed
new directions and policy changes, along with some draft legislative
wording
Second phase:
Release of draft of the proposed new Act (reflecting input from consultation
period)
Third phase:
Introduction of proposed Act in the Ontario legislature, followed by
province-wide, public committee hearings on the bill
Fourth phase:
Development of regulations to accompany new Act in consultation with
stakeholders
[1] Legislation should provide that where a settlement
agreement is to be incorporated into a consent order of the Tribunal,
the terms of the agreement must not be inconsistent with fundamental statutory
rights.
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