Creative Space Loophole: How Landlords Are Reimagining Property Use to Avoid Rental Regulations

Homeownership has become increasingly difficult, as 70% of Canadians concur that “owning a home has become impossible,” Habitat for Humanity Canada’s 2024 Affordable Housing survey reveals. While the rental market has equally become a crisis with concerns that include rising costs and low vacancy rates, those who do find an apartment can be plagued with further issues later on. One major concern is how some landlords are rethinking property use, which can leave tenants with a nightmare on their hands when an unjust eviction notice is received. From the crafty avenues that many landlords have taken to the importance of understanding tenancy rights, prospective tenants can gain valuable insight when it comes to the dark side of rentals.

Renovictions - a harrowing predicament for many

While evictions are never good news, they can come along with legitimate explanations — like a need to extensively renovate the unit for the better. However, this isn’t always the case. Renoviction is a term defined as the unique situation when a tenant is evicted due to the landlord citing the need to extensively renovate the unit. In a renoviction situation, however, a Toronto City News post explains that the landlord will often rent to another tenant at a higher price (after the original tenant has left, of course). “A lot of landlords want to capitalize on the high market rents and re-rent the unit to somebody else at a much higher rent, and this is where we start seeing bad faith evictions to push out sitting tenants,” states Dania Majid, a tenant lawyer from the Advocacy Centre for Tenants Ontario. 

A Toronto City News Everywhere article by Dilshad Burman notes that while landlords are able to renovate rental units and go through the channel of evicting a tenant in order to do so, there is a proper process that must be followed. The Rental Tenancies Act, according to the article, requires that landlords do the necessary paperwork involved, particularly when it comes to the use of the N13 form to notify tenants and provide them with important information. The valuable information found via this form involves criteria that ranges from the reason for tenancy termination to whether the landlord has permits (or will obtain them), to highlight just a couple required questions. Updates have since aimed to further regulate the process — in Toronto, for example, it’s noted that landlords are now required to also have a proper license for renovations. 

From short-term rentals to own-use claims

A CBC News article by Angela Hennessy in 2024 underlines the fact that ‘own-use’ evictions have risen a stark 85% in Ontario alone. In many of these instances, a tenant is often already paying below market rent for their units, before receiving an eviction notice in which the landlord cites plans for their own use. The article details two individuals that received such notices (the landlord wanted to bring family into the units), though it’s possible this isn’t necessarily a legitimate situation. In some situations, a landlord never actually acts on these ‘original’ plans, going on to instead re-list the unit at a higher price (and leaving the tenant to find their old apartment back on the market — for far more than they were originally paying).

Somewhat adjacent to renovictions, landlords have also been known to evict tenants for the sake of creating an Airbnb or short-term rental instead, many with the hope that the arrangement can generate more money than a traditional tenant. One unique instance of this involves senior couple Charles and Pauline Tramble — after going to the tribunal about an unreasonably high rent increase of 67% back in 2021, the couple once again faced eviction when their landlord wanted to convert the apartment into a short-term rental in 2022. The CBC article goes on to cite Service New Brunswick Minister Mary Wilson, who notes that landlords are permitted to go from a residential to tourism business model — however, the concern in this specific situation is whether or not the landlord’s actions were retaliatory in nature.

Landlords and short-term rental fiascos aren’t limited to Canada, as such issues plague the United States as well. Instances of landlords unethically reimagining rental space for the sake of tourism can be particularly prominent in states with popular urban areas, where many blue collar workers have historically found success in states like New York and California. With robust populations of people, those in search of manual labor (like handymen services) can find great success — especially when landlords are in need of maintenance or property renovations. While this can be great for those in search of opportunities, urban environments are also the prime location for unjust evictions. In fact, landlords repurposing rental space is far from a new concept — one 2015 article from The American Prospect magazine highlights the fact that entire buildings have been illegally converted from tenant apartments into short-term Airbnbs. With many cases involving bad-faith evictions, tenants are left to find a new place in an already tough and pricy market and later on often find their original apartment listed on a platform like Airbnb for an extravagant price. 

An exploration of the tenant’s role

It’s crucial to note that a tenant can be evicted if there is a legal reason behind the notice, though the proper paperwork and process must remain at the forefront of the endeavour. In the instance of a conversion to non-residential use, for instance, the Tribunals Ontario Landlord and Tenant Board (LTB) notes that in addition to the right notice, a landlord must offer the tenant “an amount equal to three months’ rent” or another acceptable unit. Similarly, an eviction due to extensive renovations or the landlord’s intention to use the unit for their own use is also valid through the right process. With that in mind, there are often specifics involved based on the situation, making it crucial for tenants to fully understand the ins and outs of their situation. For example, tenants that get an eviction notice that cites renovations can oftentimes choose to move back in afterwards (or otherwise receive adequate compensation). 

Regardless of the reason behind the eviction, it’s important to know that a landlord is required to act in good faith. When a tenant believes that their eviction notice is unjust, however, there are options and protections to look into. The City of Toronto, for example, notes that eviction issues are managed by the Landlord and Tenant Board, and states the importance of knowing whether or not your tenancy is covered by the Residential Tenancies Act (RTA). The City of Toronto site further points out that should you happen to receive an eviction notice, you aren’t obligated to leave right away and nothing needs to be signed, either. “You can only be evicted once the LTB issues a formal eviction order or you agree to move out,” the site states. It’s important to note that the process for fighting an eviction may vary from province to province, so it’s essential to understand what your rights are based on your location. Fully understanding the rental agreement, documenting interactions surrounding a potential eviction, and seeking professional legal advice are all recommended in such a situation.

While an eviction notice is never a great experience, landlords who seek to repurpose units under the guise of a legitimate reason can result in an unsavory predicament for tenants across the board. While there are proper regulations that must be abided by on the part of the landlord, it’s crucial that a tenant understand the proper legal process for evictions themselves — and how to fight the matter if it’s unjust.

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Guest Author: Jennifer Tara

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Disclaimer:

This is an Opinion article submitted by a member of the Openroom community. The author's opinions are not necessarily representative of Openroom. Openroom has an objective to publish the voices of the rental ecosystem to ensure there is dialogue amongst all.

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