Toronto landlords who evict tenants to renovate could require renovation licence as early as next summer

Landlords who plan to evict tenants to renovate their properties may soon be required to apply for a licence and provide additional financial compensation to the tenants they are displacing.

City staff released new details Wednesday of a proposed bylaw that they hope will curb illegal “renovictions” in Toronto.

The bylaw, which still needs to be approved by city council, borrowed elements from a similar one developed by the City of Hamilton, which recently became the first municipality in the province to pass a bylaw requiring landlords to obtain a renovation licence.

As part of Toronto’s proposed new rules, landlords in this city would also need to apply for a Rental Renovation Licence and they would be required to do this within seven days of issuing a N13 notice to end a tenancy.

Landlords would also be required to obtain a building permit before applying for this licence and the renovation licence must be posted on the door of the unit.

To obtain the renovation licence, staff said, landlords must submit a report from a “qualified person” identifying that renovation or maintenance work is “so extensive” that the unit must be vacant. To obtain the licence, the landlord would be required to pay a fee of $700 per unit.

Additionally, city staff are pitching a suite of new measures to protect tenants from renovictions.

According to the report, the new bylaw would see landlords create a plan to provide tenants who choose to return to their units with “comparable housing at similar rents.” Where tenants are tasked with finding their own temporary housing, monthly “rent-gap payments” would need to be paid to cover the difference in rent, according to the proposed bylaw. Tenants who choose not to return to the unit will be provided with “severance compensation,” under the proposed new rules.

Renovictions, as defined by the city, involve a landlord illegitimately evicting a tenant by alleging that vacant possession of the rental unit is needed to undertake renovations or repairs.

“Renovictions can include refusing to allow a tenant who has exercised their right of first refusal to return post-renovation, illegally raising the rent on a returning tenant, or not undertaking major renovations after evicting renters,” the staff report noted.

“This results in the displacement of tenants, the permanent loss of affordable market rental housing, and contributes to rising homelessness in Toronto.”

Staff are recommending that the bylaw come into effect on July 31, 2025 to allow for “sufficient time to undertake appropriate education and communication efforts.”

The bylaw, city staff said, was developed through consultations over the summer with housing advocates, tenant rights experts, as well as landlord and tenant associations.

“The proposed framework is intended to balance the need to address the misuse of renovations as an excuse to evict tenants, with the need for renovations and repair work that are necessary in Toronto with its often aging, existing rental housing stock,” the report read.

The Toronto Building Division will implement and enforce the bylaw, according to the staff report.

“Toronto Building staff are well positioned to inform landlords of their obligations under the bylaw early in the building permit process and will develop clear, understandable and multi-lingual public-facing guidelines to support compliance,” the report read.

Toronto Building staff will be “actively monitoring” renovation permits and will support the “timely completion” of work to allow tenants to return “as quickly as possible,” the report said.

The draft bylaw will be discussed by members of the planning and housing committee at the next meeting on Oct. 30.