Let’s get one thing straight.
A lease is another word for a contract. It’s a legal agreement. It’s a commitment made by two parties — landlord and tenant. And it needs to be protected, for the mutual benefit of both parties.
It's not a handshake. It's not a wink and a nod.
It’s firm, it should be binding, but it’s not a weapon to be used to injure tenants or cripple landlords.
In a development covered by Toronto Storeys last April, the former government introduced legislation to standardize residential leases in Ontario, to define what “landlords can and cannot include in the lease, total rent, dwelling rules, rights and responsibilities allotted to both landlord and tenant.”
This should have entrenched the validity of rental agreements for tenants and landlords. But, if we can draw any conclusions from the recent number of tenant rent strikes at buildings across Toronto, that is not the case.
Instead, today, some tenants see their leases not as inviolable, but simply inconvenient.
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Recently, the Toronto Star published an article about plans by a tenant group in a building near Don Mills Rd. and Eglinton Ave. to withhold rent cheques in an effort to “fight a possible rent hike.”
Pointing to the “successful” outcome of a rent strike in Parkdale last year, representatives of the tenants in the Flemingdon Park building told the Star that rent cheques would be held back in protest of the owner's proposed AGI of 4.8 per cent.
While some tenant activists would prefer to believe the AGI acronym stands for A Greedy Injustice, in fact, AGI actually refers to an Above Guideline Increase.
According to the Residential Tenancies Act, any rent increases (beyond provincial guidelines) in Ontario must be sought and approved through an AGI.
The legislation says that a landlord has a limited right to request an above-guideline rent increase only through an application to the Landlord and Tenant Board, and only for few very specific reasons.
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Reasons could include unusually high increases in municipal taxes and charges, additional security costs, or approved capital expenses.
It also stipulates that while landlords may seek less, AGIs must be capped at three per cent (above the provincial guideline) and can only be applied for up to three consecutive years (a total of nine per cent, at any one LTB hearing).
Not permitted to cover normal ongoing building maintenance expenses, AGIs are only intended to cover major repairs, renovations, replacements or additions.
For apartment owners, the ability to recover a small percentage of the significant costs of reinvesting in aging and underperforming apartments is one of the few incentives left to them, in light of changes to rent controls introduced by the Wynne government last year.
Of course, some tenants and their advocates disagree.
And so, AGIs are a hot topic in Toronto’s rental market. The debate can get emotional, and reactions can be strong. Understandably so, since opinions on AGI can be a matter of perspective.
Many see the constrained ability to recapture some capital expenditures for landlords benignly, believing they are the only cost-effective tool to modernize, revitalize and improve Toronto’s aging apartment buildings.
Others choose to see more nefarious motivations, viewing AGI requests as a way to improve profitability, force tenants out, and drive up rents.
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Regardless of your perspective on the debate, the province has set up a procedure to test, limit and protect the rights of both parties.
Today, across Ontario, landlords seeking rent increases beyond the guidelines must seek an AGI, which must be reviewed and approved by the Landlord and Tenant Board (LTB), before a single additional dollar can be charged.
At the LTB, among other hurdles, landlords must justify the proposed increase and provide evidence of costs claimed, respond to questions from the Board and from building residents, attend a case management hearing which allows for mediation, before the request is approved. (Although, the right to review a decision and seek an appeal is also provided.)
Within the LTB, the procedures for securing an AGI is a further example of the established framework adjudicating landlord-tenant matters, and demonstrates the system’s efforts to find a consistent and fair process, equitable to all.
This system, in light of the alternative, seems like a pretty sensible approach to resolving disputes between renters and landlords.
Moreso, if the alternative is one that encourages tenants to shirk their responsibilities, to defy their obligations, to refuse to pay rent ...
To go on strike!
Surely, no matter your perspective, we can all agree that a rental system in which our landlords act responsibly, satisfy their commitments, operate in keeping with their contractual and lawful obligations, and meet their expectations is a better one.
Shouldn’t those of us who want to see a better system also expect the same from our tenants?
