Renovictions Done Right

Renovations are necessary and important for landlords to maintain and improve their properties. Improvements also benefit tenants in the long run. In many cases, vacant possession is necessary to complete the work, which displaces the current tenants in an already difficult housing market. As such, the government regulates “renovictions” – evictions for the purpose of renovations, repairs or demolition. The most recent amendments pertaining to renovictions, s. 10AB – AD of the Residential Tenancies Act, came into force in February 2023.

The basic elements of the new renoviction provisions are:

• A landlord is entitled to renovict if vacant possession of the residential premises is necessary for the desired demolition, repairs, or renovations, and it is done in good faith.
• Where a landlord seeks to renovict, the landlord must:
  • Reach an agreement in writing with the tenant, or
  • Apply to the Director of Residential Tenancies requesting vacant possession.
• Whether through agreement or application, the tenant is entitled to compensation and the continuation of the lease until the date of termination. The Act sets mandatory minimums that apply even if the parties enter into an agreement.
• If a landlord proceeds without an agreement or Order of the Director, the tenant may be awarded moving expenses, additional expenses, and rental increases incurred under the tenant’s new lease. All of this is in addition to the standard compensation referenced above.

After a year of the renoviction provisions being in force, we now have more guidance from both the Director of Residential Tenancies as well as applicable case law to help ensure renovictions are done appropriately.

Some of the key lessons learned in the past year are:

• If you come to a mutual agreement with a tenant regarding termination of a tenancy for demolition, repairs or renovations, using Form DR5 will help ensure all the relevant obligations are captured in writing.
• If you intend to renovict, you will need a proper permit that fully covers the extent of the renovations required. While it is possible to complete some additional types of work under an existing permit, it is much more compelling to have a permit that outlines the full extent of the work required.
• If an agreement to terminate the tenancy is reached or an order of vacant possession is issued, the landlord is required to maintain all services until an order is granted or the eviction date has arrived. This includes, but is not limited to, providing utilities, timely maintenance and/or temporary solutions to issues within the unit and general upkeep.
• Landlords are entitled to decide whether renovations or repairs are required to a residential premises. The renovations or repairs do not need to be deemed necessary. The decision to renovate or repair, however, must be made in good faith. For example, it cannot be done for the sole purpose of evicting the tenant. If done in good faith, the sole question becomes whether vacant possession is required to complete the desired repairs and renovations.
• If the landlord chooses to demolish the building, it will almost always be deemed to be in good faith and necessary to remove the tenant.
• When considering whether the landlord, in good faith, requires possession of the residential premises for demolition, repairs or renovations, the decision maker can take into consideration any efforts the landlord made to settle the matter.
• For evictions related to renovations or repairs, it is helpful to have a third-party contractor as a witness. This evidence lends weight to the necessity of vacant possession to complete the work and shows that the landlord is ready to proceed with the renovations.

If you have any questions related to residential tenancies generally or renovictions specifically, please reach out to John Boyle at Cox & Palmer.