Under the Tenant Protection Act, 1997 a landlord must reduce the rent if there is a large enough decrease in property taxes (this rebate does not apply to subsidized housing). Each tenant will be notified by their city's tax assessment office. This should have occurred in January 1999.
This year, there was a large decrease in property taxes in all cities. Because this is the first year this policy is applied, notices went out late. In Ottawa-Carleton the notices were sent to tenants in August or September 1999.
The notices explain the percentage a tenant's rent should be reduced by. As well, the notices explain that this percentage reduction is retroactive to January 1, 1999. You had to be a tenant in the unit as of December 31, 1998 and thereafter to qualify for the rebate.
Many landlords have given their existing tenants notices of what their new rents are and have either issued a cheque for back payments or asked the tenants to deduct this from the next rental payment. If your landlord has not done this, you should talk to him/her about this now.
There is some confusion about what this rebate really means. It is a permanent reduction in your rent. It is not just for the year 1999 but carries on as your base rent.
The base rent is the amount used when calculating any rent increases in the future. That means if your rent was $650.00 and you were given a 3% decrease, your new rent is $630.50. When your next rent increase is calculated in the year 2000, it will be based on a 2.6% increase and it will be calculated on $630.50 (base rent) and not on the $650.00. It will therefore be a smaller increase.
This does not hold true for all tenants. If you were a tenant in the same apartment on or before June 17, 1998 you are in a different situation. Prior to this date the government allowed maximum rents. That means a landlord was allowed to charge a tenant less than the allowable rent and then raise the rent to the maximum rent at a future date even if it was above the allowable guidelines.
When the Tenant Protection Act, 1997 came into effect on June 17, 1998 it allowed landlords to keep maximum rents for those existing tenants. Maximum rents are not allowed on any tenancies created after June 17, 1998. So if you were paying a rent less than the maximum rent on June 17, 1998 and you get a decrease in rent now, then at the next rent increase your landlord could raise your rent above the guidelines but just up to the maximum rent.
What does all of this mean to tenants who have moved? If you were a tenant in a rental unit on December 31, 1998 and you still lived in that unit on January 1, 1999, you are entitled to a reduction of rent equal to the percentage announced by your city. If you moved out before the announcement was made, you are still entitled to an abatement of rent for the months you lived there in 1999.
Check with the city to see what percentage you are entitled to. Ask your landlord for the rebate. If you do not get a rebate you have until December 31, 1999 to apply to the Ontario Rental Housing Tribunal for the rebate. The cost to file an application is $45.00 which can be recovered from the landlord if you are successful at the tribunal.
For further information you can contact Ontario Rental Housing Tribunal at 1-888-332-3234.
If you have questions regarding the Tenant Protection Act or any other areas of law, contact your local community legal clinic. For tenants living west of Holland and Fisher avenues, contact West End Legal Services at 596-1641.