Real Estate Law

Bill 184 Causes Controversy for Ontario Landlords and Tenants

Tenants have largely been protected during the state of emergency in Ontario, enacted in response to the COVID-19 health crisis. During the state of emergency, renters have faced significant challenges with meeting obligations as many businesses have shuttered or laid employees off temporarily. This has meant many more people than normal have had difficulty paying basic expenses, such as rent. As a means to protect those facing hardships, landlords were not permitted to evict tenants who could not pay rent during the state of emergency. However, the emergency period has now been lifted, and with it, the moratorium on evictions.

The recent passing of Bill 184, called the Protecting Tenants and Strengthening Community Housing Act, has sought in part to address the ongoing backlog faced by the Landlord and Tenant Board (LTB) throughout the province. As we have written previously, landlords seeking to evict tenants have had to make applications to the LTB to enforce the order, and many have faced long delays, from 30 days to three months, depending on location. For landlords with non-paying tenants or tenants who were causing damage to property, these delays caused a great deal of additional strain.

What are the Changes to the Eviction Process Under Bill 184?

Previously, a landlord had to make an application for a hearing before the LTB to enforce payment of rent. If the tenant was then unable to meet their obligations, the landlord could obtain an eviction notice. Under Bill 194, tenants and landlords are empowered to design their own repayment plans in cases where a tenant is having difficulty paying the agreed-upon rent, without the need for a hearing first. If the tenant then defaults on the payment plan, a landlord is permitted to obtain an eviction notice without notice to the tenant and without a hearing before the LTB. Proponents of the Bill have said this was done to empower both tenants and landlords and to reduce the backlog at the LTB.

What Do the Changes Mean for Landlords?

For landlords, the changes mean a streamlined process for creating a payment plan (which must still be endorsed by the LTB), allowing them to make a proposal directly to a defaulting tenant rather than waiting for a hearing. However, some worry that vulnerable tenants may feel pressure to accept unfavourable terms and sign unfair agreements. If they are later unable to fulfill their end of the bargain, the eviction rate could rise.

However, others are quick to point out that the Bill contains provisions or tenants to challenge an eviction notice, similar to how things worked prior to the passing of Bill 184. Further, there are protections built into the Bill to prevent or compensate tenants for ‘bad faith’ actions by landlords. For example, while there are permitted ‘no-fault’ reasons to evict a tenant, such as renovations or demolition, some landlords have been found to have used these as reasons to evict a tenant and bring in a new one at a higher rent. The new rules would see fines of $25,000-$50,000 for individual landlords and $100,000-$250,000 for corporate landlords in such cases. Others say that the increase in fines may not be sufficient to offset the increase in profit landlords seek to make through these bad faith practices, however.

Toronto City Council Votes to Challenge Amendments

Last week, the Toronto city council voted 22-2 to challenge the Bill, saying that the changes were “contrary to rules of procedural fairness and natural justice.” Tenants and tenant advocates have been loudly protesting the changes in recent weeks, with a protest gathering outside of Mayor John Tory’s home at the beginning of July. Following the vote, the City Solicitor will work to reinstate a tenant’s right to a hearing before a landlord is issued an eviction notice.

We will continue to follow the situation as it develops and provide updates on significant changes.

The real estate lawyers at GLG LLP in Toronto assist clients with a full range of real estate services, including purchases and salesfinancing and litigation. If you are considering purchasing a property for investment purposes, we will advise on all aspects of your investment. The firm offers exceptional client service as well as a Bay St. experience with more reasonable rates. Call 416-272-7557 or complete the online form to arrange a consultation.