Lower rents for 128,000 Toronto households

A record number of Toronto tenant households are receiving notices of an automatic rent reduction this week. Tenants should check their daily mail, and act on this valuable information.

Addressed to the “Current Tenant,”clearly marked “Rent Reduction Notice Enclosed,”and in an envelope with the City of Toronto logo, these letters contain all the customized information a tenant requires to start paying a lower rent as early as December 31, 2009.

More than 128,500 households are eligible for a rent reduction under provincial legislation because the property tax on their buildings has been lowered by at least 2.49 per cent during 2009. This compares to about 330 units that were eligible for an automatic rent reduction in 2008.

Although most rent reductions may be small ($144 a year, for example, on a $1,200 monthly rent in a building where property taxes declined 5 per cent), residents are encouraged to reduce their rents according to the information enclosed in the customized package and to inform their landlords of their intention to do so. Municipalities were required to send notices about the tax decrease and rent reduction to landlords of affected buildings by September 15 and to tenants by December 15. All information on the notices is based on assessment information provided by Municipal Property Assessment Corp., an independent organization established by the provincial government.

A key reason for the record number of households eligible for rent reductions in 2009 is City Council’s 2005 decision to gradually reduce the proportion of overall property taxes paid by businesses, including multi-residential dwellings, compared to those paid by residential property tax payers, as part of the Enhancing Toronto’s Business Climate Strategy. 2009 was also an assessment year and market values have changed.

Tenants of buildings with more than six units generally pay about 20 per cent of their rent toward property taxes, so if taxes go down, they are entitled to reduce their rent by 20 per cent of the reduction. For buildings with six or fewer units, the percentage is 15. All rules are established by the province.

The rent reduction provisions in the Residential Tenancies Act apply only to private rental buildings occupied as residences before November 1, 1991. Newer apartment buildings are not covered. A number of other restrictions apply.
If a household does not receive the rent reduction notice from the City, it is not entitled to automatically reduce the rents. Tenants in buildings with property tax reductions of less than 2.49 per cent may be eligible for a rent reduction if they make an application to the Landlord and Tenant Board. The website http://www.toronto.ca/housing has more information, as well as a link to a newly developed web-database that provides information about property taxes for all rental residential buildings in Toronto.

Tenants are urged to contact the City-funded Tenant Hotline if they have remaining questions. Service is available in a number of languages at 416-921-9494. Amounts paid by landlords for solid waste management are not considered in the calculation of the rent reduction notice, as this is not permitted under the legislation. Indeed, landlords may apply to the Landlord and Tenant Board for an above-guideline rent increase to recover any extraordinary operating cost that may result from municipal charges such as garbage fees. Tenants receiving notices are entitled to the full rent reduction set out in the notice sent out by the City, but this reduction could be affected should a decision of the Landlord and Tenant Board later order a variance in the reduction.

The Landlord and Tenant Board has a telephone information line (416-645-8080) for inquiries, including those about the rules for calculating rent reductions and for above-guideline rent increase applications, as well as exemptions and rent reduction procedures for people living in buildings with tax reductions of less than 2.49 per cent. The Board’s website is http://www.ltb.gov.on.ca/.

Toronto is Canada‘s largest city and sixth largest government, and home to a diverse population of about 2.6 million people. It is the economic engine of Canada and one of the greenest and most creative cities in North America. Toronto has won numerous awards for quality, innovation and efficiency in delivering public services. 2009 marks the 175th anniversary of Toronto‘s incorporation as a city. Toronto‘s government is dedicated to prosperity, opportunity and liveability for all its residents.