Being a landlord in Ontario has always been a delicate balancing act. Between rising mortgage rates, increasing repair costs, and navigating the sometimes murky waters of landlord-tenant relations, it’s no easy feat. While most landlords and tenants are law-abiding and reasonable, there are unfortunately bad apples on both sides of the spectrum. On one end, there are landlords who exploit loopholes to evict tenants unfairly under the guise of “renovations” to jack up rents. On the other, tenants sometimes misuse the system to avoid paying rent or drag out evictions.
In response to bad-faith eviction practices—often called “renovictions”—several Ontario municipalities have stepped up with new by-laws aimed at protecting tenants. These rental renovation licence by-laws are a game-changer for landlords, and if you’re a property owner, it’s time to take note. Municipalities like Hamilton, London, and Toronto are leading the charge, and it’s likely more cities will follow in 2025.
Let’s dive into what these by-laws entail and what they mean for landlords.
Hamilton: Pioneering Tenant Protections
Hamilton took the lead, implementing its Renovation Licence and Relocation By-law on January 1, 2025. The by-law is designed to prevent tenants from being unfairly displaced under the pretense of renovations. Here’s what landlords need to do:
- Obtain a $715 Renovation Licence Fee Per Unit
Add to that an annual $125 renewal fee. - Accommodate Returning Tenants
Landlords must arrange temporary accommodations or provide rent top-ups for tenants who wish to return post-renovation.
While this ensures tenant security, it does increase the financial and logistical burden for landlords. Forgetting to factor in these fees or plans can lead to delays, penalties, or both.
London: Setting the Standard
The City of London joined the movement with its Rental Unit Repair Licence By-law, passed on September 24, 2024, and expected to take effect in March 2025. London’s by-law goes even further with stringent requirements:
- Obtain Necessary Permits and Reports
Landlords must prove that the renovations require the unit to be vacant by obtaining a building permit and a report from a qualified professional. - Submit a Tenant Information Package with the N-13 Notice
This ensures tenants are fully aware of their rights and next steps. - $600 Licence Fee
No exceptions, and penalties for non-compliance range from $1,000 to $2,500. - Start Construction on Time
Landlords must begin work within six months of getting a permit or face potential consequences.
This by-law adds another layer of complexity to the landlord’s role, especially for those juggling multiple properties.
Toronto: The Big City Steps In
Toronto followed suit, adopting its Rental Renovation Licence By-law on November 14, 2024, set to take effect on July 31, 2025. As Canada’s largest city, Toronto’s approach is comprehensive:
- Licensing and Notification Requirements
Landlords need to apply for a $700 licence (unless they are Multi-Tenant Housing Operators), submit building permits, and post Tenant Information Notices in the building. - Tenant Accommodation or Compensation Plan
Landlords must provide tenants with temporary housing at comparable rents, cover rent differences for those securing their own housing, and even pay moving allowances ranging from $1,500 to $2,500. - Severance Compensation for Tenants Who Don’t Return
If a tenant decides not to come back, landlords must provide financial compensation.
These measures make Toronto’s by-law one of the most tenant-focused, but they also come with a price tag and administrative demands for landlords.
What Does This Mean for Landlords?
While these by-laws aim to curb bad-faith evictions and ensure tenant protection, they significantly increase the financial and administrative responsibilities of being a landlord. Fees, permits, and tenant accommodation plans aren’t just added costs—they’re hurdles that need careful planning and management.
For landlords already operating on thin margins, these new regulations might feel overwhelming. However, they also provide an opportunity to distinguish yourself as a fair and ethical landlord in a competitive market. Proactively complying with these by-laws and maintaining open communication with tenants can go a long way in building trust and goodwill.
Thinking Outside the Rental Box: Consider Short-Term Rentals
If the increasing regulations for long-term rentals feel like too much to bear, short-term rentals (like Airbnb) might offer a viable alternative. While short-term rental markets have their own rules and challenges, they often allow for greater flexibility and less red tape when it comes to renovations and tenant turnover.
Here’s why short-term rentals might be worth exploring:
- Greater Control Over Your Property
You’re not bound by long-term tenancy agreements or by-laws related to renovictions. - Higher Revenue Potential
Depending on your location, short-term rentals can generate significantly more income than traditional leases. - Flexibility for Personal Use
Need to take the unit offline for repairs or personal use? No problem.
Before diving in, make sure you’re aware of your municipality’s short-term rental regulations. Many cities have licensing requirements or limit the number of days you can operate, but these hurdles are often less cumbersome than those for long-term rentals. Additionally, when partnering with a trusted Airbnb property manager, you are more likely to succeed in the short-term rental game.
The Bottom Line
Being a landlord in Ontario is no walk in the park, and the new wave of rental renovation licence by-laws only adds to the challenge. But with careful planning and a proactive mindset, it’s possible to navigate these changes and come out ahead. Whether you stick with long-term rentals or explore the short-term market, the key is staying informed and adaptable.
So, landlords, buckle up and brace for 2025—because the rental landscape in Ontario is evolving, and staying ahead of the curve could make all the difference!
4o