I’ve spoken with numerous investors and landlords have have listened into many conversations about Bill 144 and it’s been awhile since I’ve seen normally calm and collected investors shake – both from fear and anger.
For those who haven’t heard, on June 1st, NDP MPP Peter Tabuns introduced the Real Rent Control Act – Bill 144, which aims to amend the Residential Tenancies Act (RTA); an act that many feel is already unfairly biased towards tenants.
While there are several points in the proposed act that have investors and landlords upset, the one point that I believe will have the biggest impact and cause the most harm is the – Lawful Rent for New Tenants.
The proposed change will force landlords to make the rent fall in line with the following:
- any amount that is equal to or less than the last lawful rent charged or that ought to have been charged to the previous tenant if the rental unit was previously rented in the last 12 months;
- with respect to a rental unit that has not been rented in the last 12 months, an amount that is equal to or less than the sum of,
- the last lawful rent charged or that ought to have been charged to the previous tenant,
- all increases to the rent that the landlord would have been permitted to make under this Act if the rental unit had been occupied, and
- all decreases to the rent that the landlord would have been required to make under this Act if the rental unit had been occupied; or,
- the rent first charged to the tenant if the rental unit was not previously rented.
By default this essentially caps rent increases to a small percentage increase each year, dictated by the provincial government. Landlords who face increases in condo fees, hydro, mortgage payments, repairs/maintenance etc will need to apply to the board for special permission to increase above the set annual rate.
There’s all sorts of speculation about what this means for smaller investors and landlords who are already struggling to keep up with the increases to their fees. Many believe we will see a sell-off and devaluation of investment properties in Ontario should Bill 144 pass.
Regardless of the size of the impact, many parts of Ontario are already struggling with a lack of suitable rental units and any decrease in the number of landlords offering units will negatively impact renters, the group that the government says they’re trying to help.
If you’d like to reach out to your MPP and voice your thoughts on Bill 144, you can find your local MPP here
If you’d like to read more about the proposed changes you can find the full Bill 144 here
To learn more or with any questions you can contact me