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NEW Renters Bill of Rights - Bad News for Landlords?

According to the 2021 census, roughly 33% of Canadians are renters.

What about the age group from 15 to 29?

The percentage of renters jumped to almost 66%.

Nearly two-thirds of young Canadians are renting their homes.

If you want to win support from the younger generation, you would come up with strategies to help renters, right?

Earlier this week, Prime Minister Justin Trudeau said the upcoming federal budget would introduce protections specifically geared towards young renters.

Is this bad news for landlords?

I’m going to analyze this newly proposed renters’ bill of rights with you so you know what you will be facing as a landlord.

If you find valuable information in this video, give me a like!

There are 3 main things in this proposed renters’ bill of rights.

#1  Pricing History

Currently, for all private rentals in Ontario, we have to use the Ontario Standard Lease form.

Different provinces have different requirements.

Now, the federal government is saying they want to standardize things across the country and come up with a national standard lease agreement.

This would require landlords to disclose a unit’s rental pricing history.

The intention is to give renters transparency on the pricing trend so they can better negotiate the rent with the landlords.

In reality, I don’t think transparency will give renters more bargaining power.

With today’s social media, renters pretty much know the trend already.

But in the end, the rental price is driven by the market.

Let’s say the market rent for a one bedroom unit is $2,300.

The tenant goes to the landlord and says you only rented this unit for $2,000 last time, so I’m just going to offer you $2,000.

Would that work?

Nowadays, downtown Toronto is facing a spike of rental inventories because many new condo buildings are undergoing occupancies at the same time.

So rent is actually trending down.

Can the landlord go to the tenant and say this was the rent I collected last year, so you have to pay me the same rent?

It just doesn’t make sense either.

Same thing as in the sales market, we know the sold price history, but in the end the price will be driven by the market.

If the landlord has to acquire the unit at market price and pay all the running costs at market price, what’s wrong with renting out the unit at market rent?

It is supposed to be a free market.

Government interventions will disrupt the operations of the free market.

But I think what the government is proposing is actually perfectly fine.

Landlords must disclose the pricing history.

Tenants have the right to know.

Let them negotiate and come up with a price.

In the end, the impact would be minimal, the rent would still pretty much be market rent.

#2  Credit Scores

Renters are spending a lot of money to pay rent every month.

The government is proposing that on-time rent payments should count towards someone’s credit score.

Such credit history will help people out when they are ready to own a place and need to apply for a mortgage.

Finally, a brilliant idea from our government.

I support this idea, 100%.

Tenants who pay rent on-time definitely deserve a great credit history.

On the other hand, tenants who don’t pay rent would see damages to their credit history.

As of now, tenants with missing rent payments can still walk away with a perfect credit score.

They can still borrow money from the banks.

They can rent another place and not pay rent again.

The fact that their credit score doesn’t get hurt is in a way encouraging the behaviour of these bad tenants.

So if the government can put rent history in credit score, it will be great news for both landlords and good tenants.

Trudeau says he will call on landlords, banks, credit bureaus, and fintech companies to make sure that rent history is taken into account in tenants’ credit score.

Let’s hope this will be implemented sooner rather than later.

#3  $15 Million Fund

I always talk about the 2 legitimate reasons to evict your tenant.

One, you are taking the unit back for self-use.

Two, you have sold the unit to an end-user.

There is actually a third type of reason that I haven’t talked about.

It is called “renovictions”.

You can evict your tenant if you need to do significant renovations to your unit.

It’s not that simple.  

You need to meet one of the 3 criteria.

#1 You intend to demolish the rental unit.

#2 You need the rental unit to be vacant in order to do extensive repairs or renovations.  

But your tenant has the right to move back into the rental unit after the renovation is done.

And during the renovation, you must offer another rental unit that is acceptable to the tenant.

#3 You intend to convert the rental unit to a non-residential unit.

The government is saying that landlords are using “renoviction” as an excuse to kick tenants out.

So they are creating a $15 million dollar fund for provincial legal aid organizations to help tenants fight landlord abuse and “renovictions”. 

Sure, if they are bad landlords, they should be penalized.

On the other hand, I hope the government doesn’t forget to penalize the bad tenants who are holding the landlords’ unit hostage and demanding “cash for keys”.

If you haven’t heard about “cash for keys”, make sure you watch last week’s episode.

So price history, credit scores and renovictions are the 3 main things in this newly proposed renters’ bill of rights.

Overall, I would say it is good for both landlords and tenants, but only for good tenants.

If you find valuable information in this episode, make sure you like, subscribe and hit the bell.


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