What you need to know about ‘rent reductions’ in Ontario

A lease agreement in Ontario can be either verbal or written and as per the Rental Tenancies Act (RTA), if any of the services or amenities included in that contract are not supplied, or taken away at a later date, tenants may be able to pursue a rent reduction.

Typically, rent reductions are sought when amenities like a parking spot, use of the backyard, laundry or even cable and internet — that were provided to the tenant at the start of the lease — are no longer being made available.

“What a rent reduction does is it puts money back in people’s pocket for the loss of that service, the loss of that amenity,” says Kevin Laforest, staff lawyer at Scarborough Community Legal Services.

He says along with basic services, rent reductions also come into play when changes are made to the unit that may constitute a breach of the lease contract.

“[This] could be a little more rare … let’s say the landlord decides we’re doing renovations, we have to do these things, and you’re going to lose some square footage. That square footage does form part of your contract. If your unit’s 800 square feet, you’re entitled to 800 square feet. If you lose 50 of those square feet, you’re entitled to a rent reduction,” says Laforest.

However, rent reductions do not apply on services that are “reasonably discontinued” for a relatively short period of time.

“One example that I’ve seen is pools. Some of the older buildings in Toronto used to have pools attached to them. If a pool requires a lot of maintenance and they say ‘we have to close it down for four months, we have to reglaze it,’ that might not qualify for a rent reduction because it’s temporary in nature and the reason for doing so is reasonable,” explains Laforest.

How to apply for a rent reduction

Tenants must apply to the Landlord and Tenant Board (LTB) for a rent reduction within a year of losing the service or amenity.

The appropriate form is a T3 — ‘tenant application for a rent reduction’ — which requires details like what service was lost, whether it was reduced or discontinued and the date the change occurred.

Tenants do not need to inform landlords of the application. Once a T3 is filed with the LTB, the board will notify the landlord and a hearing date will be set.

“At the hearing both parties will hopefully attend and it’ll be the tenant’s onus to show what the reduction in service was. ‘Here’s the agreement I had, here’s the contract we had and here was what was included, and here’s when I lost the service or this amenity,'” says Laforest.

The LTB member hearing the case will then look at evidence from both sides before making a decision on whether a rent reduction is justified and if so, what the financial value of the claimed lost amenity is.

“When you talk about the value of it, I think one of the challenges is quantifying it. Prices vary widely across the city, ” he says.

To that end, he suggests that in preparation for the hearing, tenants collect examples of what the amenity might cost them and what they feel should be awarded.

If a rent reduction is granted, the reduced amount now becomes the lawful rent for that unit.

“If the landlord is to increase your rent [in a rent-controlled unit], they need to go off of that reduced rent,” adds Laforest.

What is the difference between a rent reduction and a rent abatement?

A rent reduction is different from a rent abatement in the following ways:

“So when we talk about an abatement of rent, what we’re referring to is a type of remedy that you can seek at the board. It’s getting money back from usually rent paid for a loss of something that you were otherwise entitled to,” says Laforest.

“A rent reduction is a permanent change to the lawful amount of money you are required to pay to your landlord every month.”