But why the alarm, especially when there are new rules in the bill increasing fines to landlords for bad behaviour?
The bill is bad for tenants, advocates say, mainly because it will make it easier to evict them, especially now that many people are in worse financial shape because of the COVID-19 pandemic.
Those speaking for landlords, however, say there are protections in place for tenants. “It improves the situation for tenants from landlords who don’t play by the rules,” says Tony Irwin, president and CEO of the Federation of Rental-Housing Providers of Ontario (FRPO).
“The changes, on balance, are either benign or beneficial to tenants,” says Douglas Levitt, senior partner with Horlick Levitt Di Lella LLP.
Currently, any disputes over evictions and rent owed must be heard by the Landlord and Tenant Board (LTB).
Sometimes, this includes a rent repayment plan drawn up at the Board. And sometimes there is what is known as a section 78 inserted into the repayment plan, which allows for eviction orders to go ahead without notice to the tenant if the tenant does not follow the repayment plan.
Levitt explains that Bill 184 would allow for rent repayment plans to be drawn up outside the board, between the landlord and the tenant. And it could now include a section 78.
“Repayment agreements have always been an option at the LTB,” says Conrad Spezowka, spokesperson for the Ontario Ministry of Municipal Affairs and Housing.
Any agreement made between landlords and tenants outside the Board would need to be sent to the LTB for review, Spezowka adds, “and only if the Board agrees does it issue a consent order which sets out the terms of repayment. If the LTB does not approve the agreement, then the parties go to a hearing.”
So what is the difference between an agreement being done at the Board versus between landlords and tenants?
“It seems reasonable that landlords and tenants should be able to come up with some kind of agreement,” says Irwin. “And if they can’t … the Landlord and Tenant Board is still the final arbiter,”
This is not how it works in their experience, say tenants’ advocates.
“The demographic of who tenants are … is disproportionately represented by the most marginalized: immigrants, single parents, students, disabled people,” says Dania Majid, staff lawyer with the Advocacy Centre for Tenants Ontario (ACTO). “People do not know about the law.” ACTO runs a duty council program and “90% of tenants don’t know they have the ability to raise issues,” like being denied services, serious disrepair or special financial circumstances, such as loss of income due to the pandemic. “The only way they find out is when they show up for a hearing.”
If there is a dispute, like the tenant owing rent, when a repayment agreement happens at the Board, the tenant has access to resources, such as legal advice, help with budgeting and understanding what they can afford and consequences of not sticking to the agreement, as well as a trained mediator, Majid says. There are people who can explain provisions in the agreement so the tenant understands what they are signing.
If the agreement is drawn up outside the Board and the tenant doesn’t understand what they are getting into, and it includes a section 78 (or “over the counter” eviction notice, as Majid says), advocates worry tenants could sign something they can’t live up to. And if they don’t abide by the agreement they don’t understand, it could trigger the over-the-counter eviction notice.
This does not mean they will immediately be evicted, landlord spokespeople say. An application for eviction still has to be signed off by the Board.
But tenants may not know their rights, Majid reiterates. And without a hearing, tenants can’t get the extra help, or the ability to explain their point of view, she adds.
One of the main issues driving evictions is vacancy decontrol, Majid says. This means that once a tenant leaves, the landlord can raise the rent any amount. This is an incentive to push out tenants, she says.
There are legal reasons to ask tenants to leave, or “no-fault evictions”: if a renovation cannot be done while a tenant is there (in which case they should have first right of refusal to move back in), or if the landlord or a family member or a purchaser needs the unit for their own use.
Of course, there have been cases where landlords claim one of these reasons but do not follow through and simply rent out the unit at a higher price point.
Landlords point out that Bill 184 strengthens protections for tenants from bad behaviour.
The bill would allow the Landlord and Tenant Board to consider a landlord’s past record to determine whether the landlord was acting in bad faith in terminating a tenancy. It would also require landlords to compensate tenants for increased rent and out-of-pocket expenses for a year after eviction if it was found to be done in bad faith. The bill also increases maximum fines from $25,000 to $50,000 for an individual and $100,000 to $250,000 for a corporation.
“Our proposed changes would better protect tenants from unlawful evictions,” says the government’s Spezowka.
But Majid says that, especially for bigger landlords, this is not enough of a deterrent. The potential profit from fixing up units and renting them out at potentially twice the price or more, offsets the fines and makes it worthwhile for many landlords. Meanwhile, she adds, the tenant is left looking for a new place in a tight housing market with a low vacancy rate and skyrocketing rents.
What about the pandemic?
Tenants’ advocates say a pandemic is the worst time to make changes that could cause more people, who have a harder time paying their rent, to lose their homes.
But those representing landlords say there is still an eviction freeze in place.
However, what happens when the eviction ban is lifted, as is now expected at the end of July after the province lifts the state of emergency?
Even under the eviction ban, tenants have complained about being harassed and threatened with eviction if they can’t pay, advocates say. In this June survey of 630 tenants in Toronto by the Federation of Metro Tenants’ Associations, 21% of tenants said the landlord was threatening eviction for non-payment of rent.
Early data from the U.S. shows eviction filings are rising as eviction moratoriums end, for instance in Wisconsin.
“No one wants to see a spike in evictions,” says the FRPO’s Irwin. “We all recognize the pandemic results in challenges to many people. As we move forward to a more recovery phase… we have to acknowledge the need for the LTB to resume operations.” In addition to gearing up the LTB for more hearings, Irwin says there needs to be an understanding that some tenants simply won’t be able to pay their rent because of the pandemic.
The FRPO’s numbers for May show that 93% of tenants have paid their rent in full, 4% have paid partial rent and 3% have not paid any rent, says Irwin. They expect the numbers will be similar for June, but the big question is what that will look like when emergency benefits like Canada Emergency Response Benefit (CERB) run out.
“We have no doubt some rent will be forgiven” by landlords, he says. But there may be a need for government assistance for renters, as well as landlords dealing with the shortfall in payments, he adds. “For some of those landlords … forgiving rent … is not an option.” Especially smaller landlords who are often using rental income to pay for mortgages and are also building an unsustainable level of debt under mortgage deferrals. On the other hand, larger landlords also have larger costs due to the pandemic, such as increased cleaning costs, he adds.
Bottom line, it would be disastrous for everyone from an infection-control perspective if there were more people moving into crowded conditions because they have been evicted, Majid cautions. “And we don’t know if a second wave is coming and the economy could shut down again.”
In addition to the eviction issue, there are a couple of other key provisions in Bill 184 about repayment.
Money owed to landlords
This summary by Torkin Manes legal firm goes through key issues in the bill, for instance one allowing landlords to seek compensation for costs like rental arrears or damage to a rental unit after the tenant leaves, which is not currently the case.
“Often landlords are left with units that are damaged or utilities unpaid,” says Irwin. “It is reasonable for landlords to recover costs they shouldn’t have to absorb.
The problem with the longer time frame, says Majid, is that it is difficult when they have left the unit for tenants to launch a defence, for instance, to prove the damage is not what the landlord is saying.
Money owed to tenants
Under Bill 184, tenants have been constrained to one year to file for reimbursement if they discover an illegal rent increase.
While helpful to landlords and prospective purchasers that rents paid by tenants for at least one year are no longer subject to challenge, it “lets landlords off the hook for raising rents illegally,” says Majid.
Most tenants only realize they have overpaid if they are at the LTB because they can’t pay rent, and staff assigned to help them crunch the numbers and realize there was an overpayment, she says.
What comes next
Everyone agrees that even before the pandemic shut down the Landlord and Tenant Board’s usual operations, the Board was backlogged and it took too long to get to a hearing.
Bill 184 relieves pressure on the board by allowing landlords and tenants to work directly together, says Irwin.
The Ministry’s Spezowka says, “When rent is overdue, we want to encourage landlords and tenants to work together to come up with repayment agreements – rather than resorting to evictions.”
But instead of creating the potential for tenants to have to deal with a legal situation on their own, the government could have fixed the delays at the Board by hiring more adjudicators and mediators, “creating opportunities to negotiate fair resolutions,” says Majid.
The changes would apply retroactively to when the province first declared a state of emergency over the COVID-19 pandemic.
If passed at third reading, as is expected soon, Bill 184 will make changes to Ontario’s Residential Tenancies Act.
As for when the Landlord and Tenant Board will reopen for expanded operations, Spezowka says: “The development of a recovery strategy is underway at Tribunals Ontario and will be ready for implementation when it is appropriate for non-urgent eviction hearings to resume. Tribunals Ontario is actively monitoring COVID-19 developments and will update its policies based on advice from the Ministry of Health, Chief Medical Officer of Health and public health officials.”