Your landlord wants to renovate your rental home. Now what?
Posted September 13, 2023 2:09 pm.
Last Updated October 19, 2023 1:49 pm.
The term renoviction has become common parlance in recent years — referring to a situation where a tenant is evicted from a rental home for renovation purposes, and the unit is re-rented for a much higher rate thereafter.
As per Ontario’s Rental Tenancies Act (RTA), landlords have the right to renovate rental units, but must follow a prescribed process that has some built-in protections for tenants.
While the RTA does not differentiate between necessary repairs and less urgent upgrades, it does stipulate that for a tenant to be evicted for renovations, the work must be so extensive that it requires a building permit and “vacant possession” — meaning the unit needs to be empty.
“It starts with an N13. So your landlord can’t just send you a text message — they have to use the N13 form,” explains tenant lawyer Dania Majid from the Advocacy Centre for Tenants Ontario.
The N13 form, titled “Notice to end your tenancy because the landlord wants to demolish the rental unit, repair it or convert it to another use” includes important details that tenants should note:
- Grounds for termination of tenancy: This can be demolition, extensive repairs requiring a building permit and vacant possession or conversion to a non-residential unit.
- Termination date: It should be 120 days from when the notice is served and at the end of a rental period.
- Permits: Whether the landlord already has permits or will be obtaining them. Note that in some cases, demolition or conversion may not need permits.
- Compensation: The tenant is owed either financial compensation or an alternate unit acceptable to them. (More details below)
The landlord can apply to the Landlord Tenant Board (LTB) to evict the tenant after issuing an N13. Thereafter, a hearing will be scheduled for the landlord to prove the claims made in the form and the tenant has the chance to respond or present their case for why they should not be evicted.
Once a tenant receives an N13 notice, they have the following options:
- Leave by the termination date.
- Leave early, before the termination date, and give the landlord at least 10 days notice.
- Exercise their right to a hearing before the LTB.
Right of first refusal
If the landlord is conducting extensive repairs or renovations, tenants have the right of first refusal — meaning they can move back in once the work is complete.
“It would be on the same terms of the original lease. So it’s as if the lease had never been interrupted. So we’re looking at the same terms, same conditions, and the same rent,” explains Majid.
A tenant must inform the landlord that they intend to exercise the right of first refusal in writing, before moving out.
The tenant is also responsible for keeping their contact information up to date with the landlord. In turn, the landlord must inform the tenant of when the unit is complete and ready to be reoccupied.
“However, a lot of landlords want to capitalize on the high market rents and re-rent the unit to somebody else at a much higher rent, and this is where we start seeing bad faith evictions to push out sitting tenants,” says Majid. “That’s where the term ‘renoviction’ comes from.”
If the tenant feels they were evicted in “bad faith,” i.e. they feel the landlord was not truthful or did not follow the proper legal processes, they have some recourse with the LTB.
The process is the same as the one to be followed when the landlord is selling a rental home and the tenant suspects bad faith.
“They can file a T5 application and go to the board to explain why they believe they were evicted illegally and they can also ask for different forms of compensation – whether it be financial for fines and other forms of remedies,” says Majid.
Tenants can also ask to be re-instated into the unit, even if a new tenant is occupying it.
Right of first refusal does not apply if the unit is being demolished, converted into a non-residential unit or modified to such an extent that it no longer exists as an independent dwelling.
The tenant is owed compensation for moving out based on an N13 notice.
“It can be financial compensation, or the landlord can offer the tenant another acceptable unit. Usually, landlords tend to go the financial route,” says Majid.
Financial compensation is determined by the number of units in the residential complex:
- If the complex has at least five residential units, the landlord must pay an equivalent of three months’ rent
- If the complex has less than five residential units, the landlord must pay an equivalent of one months’ rent
Compensation will also vary depending on whether the right of first refusal is being exercised.
If the tenant plans to move back in after work on the unit is complete, they are owed compensation as described above OR an amount equivalent to the rent for the period of time the unit is being repaired on renovated, whichever is less.
Delay or relief from eviction
Under Section 83 of the RTA, the LTB can exercise its discretion to grant the tenant either a delay or refusal of eviction, taking into account all circumstances involved in the case.
Examples of when the LTB might use its discretion to refuse an eviction:
- If the tenant owes several months of rent but has recently made extra payments to catch up and now owes only a small amount, the LTB could refuse the eviction
- If a tenant was consistently late paying rent due to financial problems or unemployment, but has since found a job and pays rent on time, the LTB could refuse the eviction despite previous late payments
- If a tenant has taken concrete steps to change or stop the behaviours/reasons that led to the eviction notice
Examples of when the LTB might use its discretion to delay an eviction:
- The tenant makes the case that local market conditions are “tight” and that it will take them some time to find another unit
- The tenant proves that they have a severe medical condition that makes it difficult to find other accommodation and they have no one to help with the search
- The tenant has a large family that requires at least a five bedroom unit, there are very few such units available and none are currently being advertised.
The board must mandatorily refuse eviction if it is proven at a hearing that the landlord is in serious breach of their responsibilities or that the landlord is taking retaliatory action against the tenant.
Find more information about relief from eviction here.