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Rental Balance

Toronto Star, November 13, 2001

When landlords rent apartments, they usually provide tenants with more than floor space. Utilities are often included in the rent.

Since landlords have no control over the cost of these services, the law allows them to pass on increases in utility costs to tenants in the form of higher rents.

But there is no provision in the Tennant Protection Act to give tenants a break when these operating costs fall.

So if natural gas prices go up by, say, 10 per cent, rents can be raised permanently to cover the increase in cost. If the price of natural gas falls by 5 per cent the following year, landlords are under no obligation to reduce rents. And if natural gas prices climb to their previous peak in the subsequent year, rents can be boosted again even though the higher gas prices are already built into rents.

From the landlord's perspective, it's a case of heads I win, tails you lose.

It wasn't always this way. Until the old Rent Control Act was repealed in 1998, landlords had to pass along reductions as well as increases in operating costs.

A spokesperson says Housing Minister Chris Hodgson is looking into the issue as part of a larger review of the provincial formula used to calculate the annual guideline for rent increases.

This is a case where newer isn't better. Hodgson should go back to a law that seeks to balance the interests of tenants and landlords.

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