obscure rental housing statute

Ontario to scrap obscure rental housing statute

Tuesday, November 12, 2019

An obscure rental housing statute is set to be wiped from Ontario’s law books. The Residential Complex Sales Representation Act is among dozens of statutes and regulations tagged for revision or outright repeal in Bill 132, omnibus legislation dubbed the Better for People, Smarter for Business Act, introduced in late October.

“Decades of government regulation have resulted in rules that are duplicative, outdated or unclear, causing businesses to spend time and money complying with rules that simply could be better,” asserted Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction, in reference to the 80 initiatives in Bill 132, which relate to 14 provincial ministries.

The Residential Complex Sales Representation Act, under the auspices of the Ministry of Government and Consumer Services, pertains to vendors, vending agents and prospective purchasers of multifamily buildings or mobile home parks with at least six units. It clarifies that purchasers will not acquire entitlement to occupy a unit — unless it is a condominium or co-op unit, or a unit in a rental building that the vendor will be vacating — and that vendors can not advertise or imply that such an opportunity exists.

The legislation, which the Ontario government now terms “outdated” and “a barrier for people to easily understand the protections that apply to them”, includes penalties of up to $50,000 for individuals or up to $100,000 for corporations that contravene it. However, legal practitioners note that other stringent consequences are in play.

“The Residential Tenancies Act sets out clearly the circumstances — limitations and restrictions — in which a purchasing landlord may exercise a right of possession to a rental unit in a building. Any agent who misrepresents to a purchaser the rights of possession is liable to be sued for negligence and breach of contract, so purchasers are fully protected in that regard,” observes Joe Hoffer, a partner and specialist in residential tenancy and municipal law with Cohen Highley LLP. “The statute has been virtually ignored since it was enacted and is functionally obsolete.”

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