Real Estate

Property that has never been tenanted

  • Last Updated:
  • May 23rd, 2019 7:22 pm
[OP]
Sr. Member
Sep 24, 2006
884 posts
156 upvotes

Property that has never been tenanted

In Ontario, if I purchase a property that was built in January 2017 and has been owner occupied until now, would the unit be under rent control?

In other words, is rent control applicable to property built after a certain date or first tenanted after a certain date?

Thanks!
19 replies
Deal Addict
Jan 1, 2017
1335 posts
1175 upvotes
The law is applicable to all property in Ontario regardless of when it was built or occupied.
Deal Addict
Oct 13, 2014
2148 posts
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Just Moved To Somewh…
Your question itself almost has it right. Until such time as it is rented it is not under any controls, the first time it is rented sets the starting point for rent control.
“Before one can have a Clue they must first accumulate 10 Inklings. That said, all it takes is one bad post and you erase all Inklings & Clues accumulated'"
Deal Fanatic
Feb 22, 2011
9664 posts
11867 upvotes
Toronto
ProductGuy wrote: The law is applicable to all property in Ontario regardless of when it was built or occupied.
Nope. Doug Ford got rid of rent control on new units effective November 15, 2018.;

"This guideline also does not apply to new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018."

https://www.ontario.ca/page/rent-increase-guideline

OP I think it doesn't matter if it was tenanted or not, it says if it was occupied or not. I guess if it was vacant this whole time you would have a case, but really who is going to know anyway.
[OP]
Sr. Member
Sep 24, 2006
884 posts
156 upvotes
You actually hit the nail on the head. The owner of the condo says he's been sitting on it for 2 years keeping it vacant and now he wants to sell. So my thinking is that since no one has lived in this condo, rent control does not apply as per Ford's Nov 2018 rule.

In trying to call the LTB to verify but I've been on hold forever.....

mazerbeaner wrote: Nope. Doug Ford got rid of rent control on new units effective November 15, 2018.;

"This guideline also does not apply to new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018."

https://www.ontario.ca/page/rent-increase-guideline

OP I think it doesn't matter if it was tenanted or not, it says if it was occupied or not. I guess if it was vacant this whole time you would have a case, but really who is going to know anyway.
Deal Addict
User avatar
Mar 23, 2003
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Hamilton
hank755 wrote: You actually hit the nail on the head. The owner of the condo says he's been sitting on it for 2 years keeping it vacant and now he wants to sell. So my thinking is that since no one has lived in this condo, rent control does not apply as per Ford's Nov 2018 rule.

In trying to call the LTB to verify but I've been on hold forever.....
Ya. Let us know.
Because I have a home I've renovated from ground up.
Never rented before. Even by previous owners.
I wonder if it's subject to rent control.?
I'm guessing it is since it was 'occupied' by original owners at some point before Nov 2018
[OP]
Sr. Member
Sep 24, 2006
884 posts
156 upvotes
The lady at the LTB said since the property has never been tenanted, the property is exempt from rent control. She also noted that even if it was owner occupied for the last 2 years, it would still be exempt. The key fact is that the property was not used as a rental before Nov 2018 and therefore rent control does not apply. Good to know!

sidshock wrote: Ya. Let us know.
Because I have a home I've renovated from ground up.
Never rented before. Even by previous owners.
I wonder if it's subject to rent control.?
I'm guessing it is since it was 'occupied' by original owners at some point before Nov 2018
Deal Addict
Dec 4, 2016
1872 posts
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Does that mean my 45 year old condo town is also exempt if none of the previous owners ever rented it out? How do I check that? The previous owner-occupier lived in it for like a decade. Do I just declare that it was never rented out?
[OP]
Sr. Member
Sep 24, 2006
884 posts
156 upvotes
Not sure. Call the board and ask.
BlueSolstice wrote: Does that mean my 45 year old condo town is also exempt if none of the previous owners ever rented it out? How do I check that? The previous owner-occupier lived in it for like a decade. Do I just declare that it was never rented out?
Deal Expert
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Nov 15, 2004
19469 posts
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Toronto
Guys, the rent control legislation only applies to ongoing leases. If you have someone who was renting for the last decade who moved out, you don't have to rent it at an indexed price to a new tenant as that's a brand new lease. Only increases on existing leases are regulated, not market prices for new ones. It doesn't matter whether your property was 'tenanted' or not. It only matters whether you have someone currently leasing it.
Deal Fanatic
Feb 22, 2011
9664 posts
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Toronto
Piro21 wrote: Guys, the rent control legislation only applies to ongoing leases. If you have someone who was renting for the last decade who moved out, you don't have to rent it at an indexed price to a new tenant as that's a brand new lease. Only increases on existing leases are regulated, not market prices for new ones. It doesn't matter whether your property was 'tenanted' or not. It only matters whether you have someone currently leasing it.
This is regarding rent control on units, which was removed for any new rental unit starting November 15, 2018.

That means if someone gets a lease today on a new unit after 1 year there is no limit to the rent increase. Rent control limited the yearly increase allowance, that is gone.
Deal Expert
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Nov 15, 2004
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mazerbeaner wrote: This is regarding rent control on units, which was removed for any new rental unit starting November 15, 2018.

That means if someone gets a lease today on a new unit after 1 year there is no limit to the rent increase. Rent control limited the yearly increase allowance, that is gone.
That's only for a unit that came into physical existence after November 2018. If you own a building built in 2015 and rent it out for the first time today you're still subject to rent control on that new lease.
Deal Fanatic
Feb 22, 2011
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Piro21 wrote: That's only for a unit that came into physical existence after November 2018. If you own a building built in 2015 and rent it out for the first time today you're still subject to rent control on that new lease.
Well per OP he contacted the tenant board and they informed him it's for new rental units first occupied after November 2018, so if it was not rented out before it is not protected by rent control. I am not sure if that is true, would have to contact them to verify, either way it is definitely gone on new builds. Just got a new precon for this very reason.
Sr. Member
Feb 21, 2010
878 posts
252 upvotes
Scarborough
the ford law is applicable newly established "rental" unit, not newly established "physical" unit.

So if you never rented before and you rent for the first time, it is a new rental unit. Hence no rent control for yearly increase.

Now for properties that have changed hands earlier, I thought there was clarification that previous owner activity does not matter. Whole thing resets upon change of ownership.
Since we are owners, if we have never rented, then no rent control. Same thing for basements. New basement apartments are not rent controlled.

Please let me know if my understanding is correct.
Piro21 wrote: That's only for a unit that came into physical existence after November 2018. If you own a building built in 2015 and rent it out for the first time today you're still subject to rent control on that new lease.
[OP]
Sr. Member
Sep 24, 2006
884 posts
156 upvotes
Interesting. Do you have a link? Maybe I need to run this by a real estate lawyer.
Piro21 wrote: That's only for a unit that came into physical existence after November 2018. If you own a building built in 2015 and rent it out for the first time today you're still subject to rent control on that new lease.
Deal Expert
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Nov 15, 2004
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mazerbeaner wrote: Well per OP he contacted the tenant board and they informed him it's for new rental units first occupied after November 2018, so if it was not rented out before it is not protected by rent control. I am not sure if that is true, would have to contact them to verify, either way it is definitely gone on new builds. Just got a new precon for this very reason.
Whoever told him that is wrong. The new law follows the same pattern as the old law, which goes by the date the place was first occupied by anyone in any capacity. That would be the owner that was living there before November 2018.

From the Ontario RTA:
Rental units in detached houses, semi-detached houses or row houses
(3) Sections 120, 121, 122, 126, 127, 129, 131, 132 and 133 do not apply on and after the commencement date with respect to a rental unit if all of the following requirements are met:

1. The rental unit is located in a detached house, semi-detached house or row house which, on or at any time before November 15, 2018, contained not more than two residential units.

2. The rental unit is a residential unit that meets all of the following requirements:

i. The unit has its own bathroom and kitchen facilities.

ii. The unit has one or more exterior or interior entrances.

iii. At each entrance, the unit has a door which is equipped so that it can be secured from the inside of the unit.

iv. At least one door described in subparagraph iii is capable of being locked from the outside of the unit.

3. The rental unit became a residential unit described in paragraph 2 after November 15, 2018.

4. One or both of the following circumstances apply:

i. At the time the rental unit was first occupied as a residential unit described in paragraph 2, the owner or one of the owners, as applicable, lived in another residential unit in the detached house, semi-detached house or row house.

ii. The rental unit is located in a part of the detached house, semi-detached house or row house which was unfinished space immediately before the rental unit became a residential unit described in paragraph 2. 2018, c. 17, Sched. 36, s. 1.
“residential unit” means any living accommodation used or intended for use as residential premises, and “residential unit” includes,

(a) a site for a mobile home or on which there is a land lease home used or intended for use as a residential premises, and

(b) a room in a boarding house, rooming house or lodging house and a unit in a care home; (“habitation”)
https://www.ontario.ca/laws/statute/06r17#BK2

From the rent control cessation announcement:
Who it applies to
The guideline applies to most private residential rental units covered by the Residential Tenancies Act.

The guideline does not apply to:

vacant residential units
social housing units
nursing homes
commercial properties
This guideline also does not apply to new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018.
https://www.ontario.ca/page/rent-increase-guideline

Not 'rental purposes'. Residential purposes, which means anyone living there, renting or not.
Deal Fanatic
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Jul 14, 2008
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I thought these were the following conditions to be exempt from rent control:

(1) new dwellings or
(2) any additions to existing dwellings that are used as apartments or
(3) any older units that were unoccupied as of November 15, 2018.

Based on these, and the conversation with LTD, the OPs unit is not rent controlled.

3 is arguably harder to determine if the building is much older. How does one verify, personally, if a unit hasn’t ever been tenanted in its history?

Edit: think 3 is wrong after reading that Ontario link above from Piro. That’s what I thought it was initially but the fact the LTD said otherwise was confusing. Perhaps they thought OP meant “unoccupied” as opposed to “occupied but not lived in”?
Deal Fanatic
Feb 22, 2011
9664 posts
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Toronto
Piro21 wrote: Whoever told him that is wrong. The new law follows the same pattern as the old law, which goes by the date the place was first occupied by anyone in any capacity. That would be the owner that was living there before November 2018.

From the Ontario RTA:


https://www.ontario.ca/laws/statute/06r17#BK2

From the rent control cessation announcement:

https://www.ontario.ca/page/rent-increase-guideline

Not 'rental purposes'. Residential purposes, which means anyone living there, renting or not.
That does make more sense, and is what I initially thought it was.

Any new buildings will not have it starting November 15, 2018. Over time these will become a larger and larger percentage of all properties, older ones with rent control will become sparse and not come up often. Even when they do they will likely be incredibly run down and not ideal to live in.
Deal Fanatic
Jul 3, 2011
5776 posts
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Thornhill
Hmm, I'd get a second opinion.

from the LTB site:
Rental units first occupied for residential purposes after November 15, 2018 are now exempt from the rules that limit rent increases to the guideline amount (See section 6.1 of the Residential Tenancies Act)....
http://www.sjto.gov.on.ca/ltb-september ... ent-2-3-2/
Where there's a further clarification here
If there is a dispute about new buildings and additions, the landlord must prove that the building or addition was first occupied for residential purposes after November 15, 2018.
https://www.ontario.ca/page/renting-ontario-your-rights
It falls in line with the way oit was before it was changed by Wynne which was that as long as the unit was occupied for residential purposes, controls applied.
hank755 wrote: The lady at the LTB said since the property has never been tenanted, the property is exempt from rent control. She also noted that even if it was owner occupied for the last 2 years, it would still be exempt. The key fact is that the property was not used as a rental before Nov 2018 and therefore rent control does not apply. Good to know!
hank755 wrote: The lady at the LTB said since the property has never been tenanted, the property is exempt from rent control. She also noted that even if it was owner occupied for the last 2 years, it would still be exempt. The key fact is that the property was not used as a rental before Nov 2018 and therefore rent control does not apply. Good to know!
Deal Addict
Jan 1, 2017
1335 posts
1175 upvotes
I think in the case for condos occupancy means the building registered for occupancy and not the individual unit owner occupying the unit. So if the condo building got its occupancy permit in 2017 but the individual unit sat empty for 2 years it would still be covered under limited annual increase.

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