New Development: Update to the Personal Use Provision under the Residential Tenancies Act

Selling your home can be a daunting task, especially when there are tenants involved. Recent changes to the Residential Tenancies Act (RTA), by way of the Rental Fairness Act (RFA), have significantly amended the RTA. Sellers and Landlords will have to ensure they meet the strict notice requirements set out in the RTA when they are trying to terminate a residential tenancy as part of a property sale.

Personal Use Provision

Amendments in the RTA are highlighted in section 48.1. The following are the requirements that must be met in order for a landlord to move into a unit normally occupied by tenants, for their personal use:

  • The termination date must be at least 60 days after providing the tenants with notice;
  • The landlord, landlord’s spouse, child or parent of the landlord or landlord’s spouse, or a person who provides care services to the any of the named individuals must reside on the property for at least one (1) year (good-faith requirement); and
  • The landlord must compensate the tenant in an amount equal to one (1) month’s rent (this payment must be made before the termination date) or offer the tenant another rental unit the tenant deems acceptable.

Provided a landlord gives the tenant the required notice to end the tenancy in good-faith, and the tenant fails to move out of the unit by the last day as indicated on the notice, the landlord may have to proceed to the Landlord and Tenant Board to commence eviction proceedings against the tenant.

Consequences

The consequences for a landlord giving a tenant notice to vacate a unit for their personal use in bad-faith can be costly. The Landlord and Tenant Board can issue an order for the landlord to:

  • Pay the tenant a portion of any increased rent incurred or that will be incurred by the former tenant for a one (1) year period after vacating the rental unit;
  • Pay for reasonable out-of-pocket moving and storage expenses; and
  • An abatement of rent and an administrative fine of up to $25,000.

If you have recently sold or purchased a property and require assistance, you can call Tejpaul Grewal at 416-682-7055 or by email or Patrick Shing at 416-682-7054 or by email.

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