We know the general approach: i.e. if this is a "standard" RTA-covered tenancy (i.e. not exempt from the RTA (see RTA section 5), and also not social / RGI housing, etc (see the list in RTA section 7)), and if the unit was first occupied for residential purposes on or before November 15, 2018, the Guideline from RTA section 120 applies. And this does not change with subsequent occupants, i.e. what matters is when the unit was first occupied for residential use.
However, there are some other scenarios when the Guideline can also apply. In any event, you should get legal advice. We will provide a simplified flow chart which can help figure out if the Guideline applies to a standard RTA-covered unit or if the unit is exempt from the Guideline under RTA section 6.1. Get legal advice for your specific scenario.
It is worth noting that the burden of proof for the exemption is on the landlord claiming the exemption (RTA ss. 6.1(6)). Below are a few suggestions in regards to the types of evidence that landlord might consider if he wants to prove that the unit is exempt from the Guideline (by the Ontario Government: https://www.ontario.ca/page/residential-rent-increases).
"Resolving issues about rent control
As a tenant or a landlord, you can contact the Landlord and Tenant Board to determine whether a unit is exempt from the rent increase guideline.
To show that a unit is exempt from rent control, landlords can:
- include an additional term under section 15 of the lease stating that the unit is exempt from the rent increase guideline
- keep records that prove the exemption – in case the tenant asks, or there is a dispute
New buildings and additions
If there is a dispute about new buildings and additions, the landlord must prove that the building or addition was first occupied for residential purposes after November 15, 2018.
Landlords might want to keep records, such as:
- building permits, permit applications and plans
- occupancy permits
- new home warranty documents
- documents from the builder
New units in existing houses
If there is a dispute about new units in existing houses, the landlord must prove that the new unit was completed after November 15, 2018.
The landlord must also prove either:
- the unit was built in a previously unfinished space like a basement or attic
- the owner lived in another part of the house when the new unit was first occupied
Landlords might want to keep records, such as:
- documents from the builder or invoices from the contractor
- “before and after” photographs
- building permits, permit applications and plans"
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RTA section 6.1 (this is the basis for the flow chart presented above):
"Exemptions from rules relating to rent
6.1 (1) In this section,
“addition” means, with respect to a mobile home park or land lease community, an expansion beyond the boundaries of the mobile home park or land lease community; (“rajout”)
“commencement date” means the day section 1 of Schedule 36 to the Restoring Trust, Transparency and Accountability Act, 2018 comes into force. (“date d’entrée en vigueur”) 2018, c. 17, Sched. 36, s. 1.
Buildings, etc., not occupied on or before November 15, 2018
(2) Sections 120, 121, 122, 126, 127, 129, 131, 132, 133, 165 and 167 do not apply on and after the commencement date with respect to a rental unit if the requirements set out in one of the following paragraphs are met:
1. The rental unit is located in a building, mobile home park or land lease community and no part of the building, mobile home park or land lease community was occupied for residential purposes on or before November 15, 2018.
2. The rental unit is entirely located in an addition to a building, mobile home park or land lease community and no part of the addition was occupied for residential purposes on or before November 15, 2018. 2018, c. 17, Sched. 36, s. 1.
Rental units in detached houses, semi-detached houses or row houses
(3) Sections 120, 121, 122, 126, 127, 129, 131, 132 and 133 do not apply on and after the commencement date with respect to a rental unit if all of the following requirements are met:
1. The rental unit is located in a detached house, semi-detached house or row house which, on or at any time before November 15, 2018, contained not more than two residential units.
2. The rental unit is a residential unit that meets all of the following requirements:
i. The unit has its own bathroom and kitchen facilities.ii. The unit has one or more exterior or interior entrances.iii. At each entrance, the unit has a door which is equipped so that it can be secured from the inside of the unit.iv. At least one door described in subparagraph iii is capable of being locked from the outside of the unit.
3. The rental unit became a residential unit described in paragraph 2 after November 15, 2018.
4. One or both of the following circumstances apply:
i. At the time the rental unit was first occupied as a residential unit described in paragraph 2, the owner or one of the owners, as applicable, lived in another residential unit in the detached house, semi-detached house or row house.ii. The rental unit is located in a part of the detached house, semi-detached house or row house which was unfinished space immediately before the rental unit became a residential unit described in paragraph 2. 2018, c. 17, Sched. 36, s. 1.
Non-application of exemption under subs. (2) or (3)
(4) Subject to subsection (5), the exemption under subsection (2) or (3) does not apply with respect to a rental unit that is subject to a tenancy in respect of which a tenancy agreement was entered into on or before November 15, 2018. 2018, c. 17, Sched. 36, s. 1.
Application of subs. (4)
(5) Subsection (4) applies only with respect to the tenancy described in that subsection and does not apply with respect to any subsequent tenancy. 2018, c. 17, Sched. 36, s. 1.
Burden of proof
(6) For greater certainty, in an application to the Board in which the application of subsection (2) or (3) is at issue, the onus is on the landlord to prove that the subsection applies. 2018, c. 17, Sched. 36, s. 1.
Transition rules
(7) The following rules apply on and after the commencement date with respect to a rental unit, if subsection (2) or (3) applies to the rental unit and the unit is subject to a tenancy in respect of which a tenancy agreement was entered into before that date but after November 15, 2018:
1. Despite subsections (2) and (3), sections 121 and 122 continue to apply with respect to an agreement that was entered into between the landlord and the tenant of the rental unit under section 121 before the commencement date.
2. Despite subsections (2) and (3), section 132 continues to apply with respect to an application that was made by the landlord or the tenant of the rental unit under that section before the commencement date and was not finally determined before that date.
3. Despite subsections (2) and (3), section 133 continues to apply with respect to an application that was made by the tenant of the rental unit under that section before the commencement date and was not finally determined before that date.
4. Despite subsection (2), section 165 continues to apply with respect to an assignment of the rental unit for which the landlord granted consent under section 95 before the commencement date or which was authorized by the Board under section 98 before that date. 2018, c. 17, Sched. 36, s. 1.
Section Amendments with date in force (d/m/y)
2018, c. 17, Sched. 36, s. 1 - 06/12/2018"
To find out more:
On rent increases in general:
On the Guideline:
Disclaimer:
You should not act or rely on any information provided in this blog. It is not legal advice, and the content is provided for general discussion and general information purposes only and to help encourage further research. To ensure your interests are protected, retain or formally seek legal advice from a licensed legal professional.
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