With a third wave threatening Ontario, renters across the province continue to witness the economic ramifications of COVID-19. In response to significant economic loss and instability among families and small businesses, the Ontario government passed the Helping Tenants and Small Businesses Act, 2020, S.O. 2020, c. 23 (Bill 204). Bill 204 freezes residential rent increases, in an attempt to offer Ontario’s some-1.7 million tenants relief during the COVID-19 pandemic. The legislation also extends the temporary ban on commercial evictions, thus relieving small businesses in the province as well.
COVID-19 Rent Freeze
Bill 204 establishes a “rent freeze period,” during which landlords of residential properties are prohibited from raising rent rates in 2021. The “rent freeze period” begins January 1, 2021, and is set to end on December 31, 2021.
Section 136.1(3) of the legislation specifies that landlords are barred from raising rent during the freeze period, even where notice of the increase was given before the passing of Bill 204. Importantly, the rent freeze mandated by the COVID-19 rent relief legislation does not apply to all tenants. For example, rent increases approved by the Landlord and Tenant Board prior to October 1, 2020, are permitted to be applied in 2021. Furthermore, 2021 rent increases may also be approved by the Landlord and Tenant Board and applied to 2021 rents in the case of increases due to costs related to “eligible capital repairs and security services.” Finally, Bill 204 allows for tenants and landlords to agree on rent increases in exchange for additional services, like air conditioning, or extra facilities, such as parking.
The rent freeze expressly applies to most Ontario tenants living in rented houses, apartments (including basement apartments), condos, care facilities, mobile home parks, land lease communities, and more.
Additionally, the rent freeze prohibits the above-guideline increases in municipal property taxes during the freeze period, unless the increases were already approved by the Landlord and Tenant Board before the passing of Bill 204.
Commercial Tenants Under the COVID-19 Eviction Freeze
In addition to freezing rent for residential properties, Bill 204 affords aid to small businesses affected by COVID-19. The legislation’s major contribution to small businesses in Ontario is the extension of the temporary eviction ban applicable to small business tenants. The new measures also protect commercial tenants from being locked out of their rented premises or having their assets seized.
This extension period applies to small businesses in the province that are eligible for federal/provincial rent assistance under the Canada Emergency Commercial Rent Assistance (CECRA) under the small businesses program, where the landlord did not apply for the CECRA aid program.
Section 83 requires that landlords who exercised their right of re-entry during the eviction freeze extension period, should, as soon as reasonably possible, restore possession of the rented property and compensate for re-entry. Where commercial landlords are unable to restore possession of the premises for reasons other than the tenant declining to accept possession, landlords are to compensate commercial tenants for all damages sustained due to the inability to restore possession.
Furthermore, in the case of goods seized by commercial landlords during the extension period, landlords are required to return the seized goods or chattels that have not yet been sold.
Pre- and Post-COVID-19 Rent Increase Rules
The Residential Tenancies Act, 2006, S.O. 2006, c. 17 establishes the rights and responsibilities of landlords and tenants of residential properties. The rules regulating rent increases in Ontario pre-pandemic times and conceivably after the COVID-19 pandemic ceases to impact the province, posit that in most cases, residential rent can be increased either 12 months after the previous rent increase or 12 months after the date the tenancy begins. However, landlords are required to give written notice of a rent increase at least 90 days prior to the increase taking effect.
Where a rent-related dispute arises between residential tenants and landlords, tenants and landlords may contact the Landlord and Tenant Board (LTB). The LTB is similar to a court and resolves disputes between tenants and landlords. Whether a dispute arises in a residential or commercial setting, landlords and tenants are highly encouraged to seek the aid of an experienced lawyer to ensure their rights are protected.
Contact Tierney Stauffer LLP for Experienced Representation in Commercial Lease Disputes
At Tierney Stauffer LLP, our experienced commercial lease lawyers have an extensive background representing and advising business clients, commercial landlords, and property owners on commercial lease matters. We represent clients on a variety of leasing matters, ranging from commercial landlord and tenant disputes to lease drafting and review, to retail leasing and terminations, and much more.
At Tierney Stauffer LLP, we pride ourselves on our client-focused and personalized approach to commercial landlord and tenant matters. Our experienced team has extensive and broad experience representing clients on a variety of commercial landlord and tenant issues and will ensure your needs as a landlord or tenant are met. Call us at 1-888-799-8057 or contact us online to set up a consultation.