Published on April 27, 2018
Posted in: Blog, Louis Alexopoulos
With the high cost of real estate in the major Ontario markets, and especially in Toronto, many homeowners are taking on tenants to help pay their mortgage and related costs. In addition to complying with local zoning and safety by-laws homeowners should be aware that the Ontario government has made all rental units, regardless of size or location, subject to rent control. The result is that the government’s new rent increase guidelines will dictate the amount that a landlord may increase the rent. For calendar 2018, the guideline increase is 1.8%.
The government has also introduced and mandated, as part of the Rental Fairness Act, 2017, that landlords complete and provide a standard form lease to their tenants. The form is mandatory for private residential leases as of May 1, 2018. The form is now available at www.forms.ssb.gov.on.ca. Failure to provide a lease has financial repercussions on landlords including, in certain instances, the right of a tenant to withhold payment of the rent.
Many prospective home purchasers had factored in tenancies and uncontrolled rent increases into their buying decision. Although it is still possible to set a new legal rent in cases where a purchaser buys an untenanted property and secures a tenant, once the tenant is in place the guidelines will then apply to future rent increases. The introduction of universal rent control coupled with the current increases in mortgage interest rates will put a strain on purchasers’ finances and their ability to carry their mortgages.
The Rental Fairness Act, 2017 changed the landscape for those buyers. Is that fair?
Sotos LLP has extensive experience in representing purchasers of real estate. Before you submit an Offer to acquire residential property which you intend on renting out or if you are assuming existing tenants you should have one of our lawyers review it to ensure that there are no legal land mines which await you. Feel free to reach out to Yianni Alexopoulos at 416.572.7310 or at firstname.lastname@example.org.