New Rules in Store for Toronto Landlords

by | Jan 2, 2017 | Rental Property Management Tips

An apartment rating system where landlords post a green/red or pass/fail sign in public view is one of the changes that may be included in a new rental bylaw approved two weeks ago by Toronto City Council.

The bylaw is designed to strengthen the existing regulatory framework regarding the condition of rental properties. Over 200,000 units may be impacted, including an estimated 3,500 buildings.

The measure was driven largely by tenants, who comprise just over half the population in the city.

Rather than proceeding with a licensing law, a move that was under consideration, Toronto lawmakers opted for a regulatory scheme that is expected to fortify existing regulations, create more specific standards, and allow the city to increase the penalties against landlords, especially those who receive multiple complaints. A draft proposal is due in March.

If the proposed budget passes, sixty per cent of enforcement costs will be paid for with a $10.60 per unit fee charged to landlords, as well as fines from those who fail to meet building standards. About thirty per cent of the cost is slated to be funded by taxpayers. Some of the funds are earmarked for community outreach, which will include tenant education and engagement, and other online services.

The City Council debate centered on the use of taxpayer funds needed to implement the new program, including an estimated twelve new or transferred employees, with the supervisory position salary set at around $120,000 per year. Several council members expressed concerns over the estimated costs.

One member argued that it was unfair that all landlords — including those with well-maintained properties — would have to pay the same amount for enforcement of the program. Proponents countered that compliant landlords benefit by not having to pay additional fines and penalties. Those fees are expected to cover around twelve per cent of the overall cost of the program.

Other members decried the lack of resources provided at the provincial level. Local bylaw enforcement of building standards in apartments is a decades-old tradition in Toronto.

Key elements under consideration for the final proposal include a rule that would prohibit landlords who are in breach from renting out vacant units. Other features may include:

The requirement to register apartment buildings;
Landlords track repair requests and responses;
Tenants be notified of any city-ordered work or cleaning;
A tenant notification board installed on the property;
A comprehensive pest management plan;
Pest control, HVAC and plumbing be performed by licensed contractors; and
A demonstrated plan for capital repairs.

In addition, lawmakers will consider the feasibility of a rating system similar to the city’s DineSafe program. Landlords would be required to display a sign in a visible location that touts the property rating. A council member indicated that DineSafe has brought restaurants from forty to ninety per cent compliant with health codes.

The measure did win sweeping approval, passing 35 votes to 4. However, the motion to refer it to budget review passed by a narrow margin, 20 votes to 19. One council member proposed a change that would have made it easier for landlords to pass the cost on to tenants. That proposal failed 9 votes to 30. The rating system motion carried 31 votes to 8.

Once council member, who voted against the bylaw, felt that the regulations would not be a substantive answer to the problem of declining rental properties. He equated the bylaw to digging a hole, deeper and deeper.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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