Toronto’s ‘renoviction’ bylaw takes effect Thursday. Here’s what you need to know

A highly anticipated bylaw meant to prevent Toronto landlords from evicting tenants under the guise of extensive renovations goes into effect on Thursday.

The incoming Rental Renovation Licence Bylaw is not meant to stop evictions for renovations altogether, but to discourage landlords from misrepresenting the need to evict tenants over extensive renovations in order to get new, higher-paying tenants to move in — a practice often referred to as “renoviction.”

At a press conference last week, Mayor Olivia Chow said she’s heard several instances of tenants being evicted for “bogus” reasons, such as a landlord wanting to add new tile to the bathroom or new cupboards to the kitchen.

 

“For many Torontonians who have been in their homes for many years, being forced to move means they won’t be able to find another apartment they can afford,” Chow said, adding the bylaw would come to the “rescue,” thanks in no small part to tenant advocates.

While most landlord-tenant law is provincial, under the Residential Tenancies Act (RTA), some municipalities — such as Hamilton and London — have added rules meant to protect tenants against renovictions under their jurisdiction.

There are limits to the city’s power to stop tenants being displaced, said Benjamin Ries, executive director of South Etobicoke Community Legal Services, but there’s good reason for “cautious optimism” among tenant advocates over the new legislation.

What is a renoviction?

Under the RTA, a tenant can be evicted if a landlord intends to do repairs or renovations so extensive they require a building permit and for the unit to be vacant.

Tenant advocates say this is often done in bad faith to get around rent control laws and move higher-paying tenants in, a practice known as “renoviction.”
While tenants in Ontario technically have the right of first refusal — meaning they have the legal right to move back in after renovations are done at the same rate they were paying — lawyers and advocates say this right is rarely respected, and the Landlord and Tenant Board has ruled it does not have the authority to kick out new tenants in order to allow old tenants back in.

 

What’s in the Rental Renovation Licence Bylaw?

Starting Thursday, landlords must apply for a licence within a week of giving a tenant an N13, the eviction notice for renovations that require tenants to move out.

The licence application costs $700 and requires the necessary building permits, plus a report from a professional licensed by the Ontario Association of Architects or Professional Engineers Ontario saying the renovations require the unit to be vacant.

How such a professional could determine the necessity of vacant possession is “the more controversial parts of the bylaw,” Ries said.

“Is it part of the curriculum for architects and engineers to be trained in the type of work that requires vacant possession?” Ries asked. “I would suggest they’re not purely technical questions. They’re questions that look at the tenants’ ability to live alongside a certain amount of work.”

The new rules will require landlords to pay “quite a lot” of compensation to tenants, Ries pointed out, in addition to compensation required by the RTA.

Licensed landlords must pay tenants a one-time moving fee — either $1,500 if they have a studio or one-bedroom unit, or $2,500 if they have two or more bedrooms — regardless of whether the tenant wishes to return to the unit. The RTA, meanwhile, does not require landlords to pay any moving fees. 

 

Additionally, landlords will have to provide tenants who wish to return with a comparable temporary accommodation the tenant agrees with or with rent-gap payments (determined by the difference between their rent and the average Canadian Mortgage and Housing Corp. market rents for rental units built since 2015) for the duration of the renovation.

Most tenants and landlords are likely to choose the payment option, which makes a potential rent-gap arrangement significant to curbing renovictions, Ries said.

“If the work never finishes, the compensation never finishes,” Ries explained, noting ongoing payment could motivate landlords to get work done faster or potentially make renoviction less financially attractive.

For tenants who don’t wish to return, landlords must pay three months-worth of rent-gap payments (also determined by the difference between their rent and the CMHC market average).

The city’s approach also differs from the RTA’s approach to compensation, Ries pointed out.

Rules for compensation under the RTA differ depending on how many rental units are in a tenant’s complex, whereas for Toronto they will be the same across the board.