Rent Control Bulletin: Potentially Invalid Notices of Rent Reductions
Rent Control Bulletin – October 2017
If you operate a non-profit housing project or a residential complex that operates
under a prescribed federal, provincial or municipal program and you received a
reduction in your property taxes, you may need to remind the municipality that you
are exempt from mandatory rent reductions under Section 131 of the Residential
Tenancies Act, 2006 (“RTA”).
Municipalities are in the process of preparing Notices of Rent Reductions to
tenants in residential complexes where property taxes have decreased more
than 2.49% in 2017. Several exempt non-profit housing providers were notified that
Notices of Rent Reductions were being prepared to be sent out to their tenants,
including RGI tenants. Obviously sending out invalid Notices of Rent Reductions
would cause unnecessary stress and confusion for all parties.
Section 131 of the RTA does state that if the municipal property tax for a
residential complex is reduced by more than the prescribed percentage, the
lawful rent for each of the rental units in the complex is reduced in accordance with
the prescribed rules. The RTA also says that, subject to the provisions, the
municipality shall notify the landlord and all of the tenants about that fact.
However, subsection 7(1) of the RTA provides exemptions to sections 126 to 133
of the Act for rental units located in a non-profit housing project or other residential
complex, if the non-profit housing project or other residential complex was
developed or acquired under a prescribed federal, provincial or municipal
program and continues to operate under,
i. Part VII of the Housing Services Act, 2011,
ii. a pre-reform operating agreement as defined in the Housing Services
Act, 2011, or
iii. an agreement made between a housing provider, as defined in the
Housing Services Act, 2011, and one or more of,
A. a municipality,
B. an agency of a municipality,
C. a non-profit corporation controlled by a municipality, if an object
of the non-profit corporation is the provision of housing,
D. a local housing corporation as defined in the Housing Services
Act, 2011, or
E. a service manager as defined in the Housing Services Act, 2011.
If you own or operate a property that is exempt from Section 131 and you
received a reduction in your property taxes, you may want to contact your local
tax department and make sure that your tenants will not be sent invalid Notices of
Rent Reductions.
