This one is a big one, and could have some impact on the market as a whole (see my opinion at the end on this), but a few things to get straight as we begin: This isn’t legal advice, even if this info came from many Real Estate Lawyers. What this is, is a comprehensive breakdown of the program launched by the City of Windsor in response to the Provincial Government aiming to combat the cost of buying homes.
Let’s dive into the new program, break it down, and if you’re an owner or prospective one, there will be links for you to follow.
A special thank you to SimplyClose and Farhat & Associated Real Estate Lawyers for the information, and I hope you all find this useful.
City of Windsor Residential Rental License Pilot Program
- Initial Duration: 2 Year Pilot Program
- Locations: City of Windsor, Wards 1 and 2 only at this time
- Expansion: If “successful”, program will likely be expanded to the remaining Wards in the city. Spoiler Alert – it will be (just my opinion).
- By-Law: Number 14-2023
- Commencement Date: February 13th, 2023
- Deadline to File: May 31st, 2023
So, What Is the Residential Rental Pilot Program in Windsor, and Who Does it Apply To?
The Residential Rental Pilot Program (let’s use RRPP from now on) is a municipal licensing program designed to protect the health and safety of tenants living in rental residential properties, ensure regulations for those properties are met including heating, water and plumbing, while maintaining the character of the neighbourhood with respect to nuisance properties, protecting the residential amenity and stability of the area. The short answer: Protect tenants and make sure properties are maintained to a standard as to not affect neighbourhoods.
It applies to the following:
- Operating a Rental Housing Unit;
- Permitting a persona to operate a Rental Housing Unit;
- Collecting rent, or permit rent to be collected, for a Rental Housing Unit;
- Marketing, or permit to be Marketed, a Rental Housing Unit; or
- Hold a Rental Housing Unit out as being licensed.
What’s the definition of a “Rental Housing Unit” – good question. Here is some legal jargon:
A “Rental Housing Unit” is defined as a Dwelling Unit which is occupied or offered for occupancy in exchange for Rent or services in lieu of paying Rent. A “Dwelling Unit” means a room or suite of rooms in a Building1 used or designed to be used by one (1) or more individuals as an independent and separate housekeeping unit.
SimplyClose
The term “Operate” means to rent out, provide, offer to rent out or provide, or cause to be Marketed, the offer or rental, whether directly or indirectly, including, without limitation, via the internet or other electronic platform, of a Rental Housing Unit and shall include a person collecting a fee or handling payments in respect of a Rental Housing Unit.
Let’s discuss exceptions, because there are some.
- a Property containing five (5) or more Dwelling Units;
- a Dwelling Unit whose occupant(s) are required to share a bathroom or kitchen with the owner, the owners spouse, child or parent or the spouse’s child or parent, and where the owner, spouse, child or parent lives in the building in which the living accommodation is located;
- a hotel, motel, or inn;
- BnB, Guest House, Lodging Home already licensed under the city business licensing by-law; or
- Dwelling Unit to which any of the following statutes, or their regulations, apply:
- the Homes for Special Care Act, R.S.O. 1990, c H. 12, as amended;
- the Innkeeper’s Act, R.S.O. 1990, c 17, as amended;
- the Long-Term Care Homes Act, 2010, S.O. 2010, c. 11, as amended; (iv) the Retirement Homes Act, 2000, S.O. 2010, c. 11, as amended; (v) the Social Housing Reform Act, 2000, S.O. 2000, c. 27, as amended; and
- social housing or affordable housing that is not subject to the Social Housing Reform Act, 2000, S.O. 2000, c. 27, as amended, but which is subject to an agreement with the City of Windsor and which has been approved for exemption by the License Commissioner.
Who MUST Apply for a Licence?
As stated before, this By-Law is for Ward 1 and 2 for Windsor at this time, only. Don’t know if you are in that area, see this link here. For those located in Wards 1 or 2, and you are one of the following, you must apply.
- Owners of a Rental Housing Unit;
- New Build properties that will be tenanted in Wards 1 & 2;
- Operators of a Rental Housing Unit; and
- Dwelling Units used or intended to be used as a Rental Housing Unit
Let’s get some more legal jargon out of the way with the term “Operator”:
The term “Operator” means any person who operates, maintains, or is otherwise responsible for
SimplyClose
managing or addressing issues in relation to a Rental Housing Unit but is not an Owner. This would include
property management companies or representatives of a landlord (i.e., family members of the Owner).
I’m a fan of the book (and movie) Fight Club by Chuck Palahniuk, so lets use the final rule of Fight Club to address current owners:
If you’re an existing owner of a property being rented in Wards 1 or 2, you have to apply. (If you don’t get the reference, this won’t be as cool).
The Fine Print and the Costs for the RRPP in Windsor
The final questions are essentially “what do I have to do, who do I have to give my money to, how do I do it, and where?”. Let’s get this Band-Aid ripped off shall we?
The list is as long as the Titanic, but hopefully ends up a different way for applicants. In order to apply for a Licence, you must:
- Be at least eighteen (18) years of age;
- Complete an application form and attach additional documents required by the License Commissioner;
- Submit their completed application to the Licence Commissioner; and
- Pay the applicable fee.
What documents are needed?
- Business Ownership Declaration Form;
- Corporate Profile Report, if applicable;
- Criminal Record Check for all Owners;
- Electrical System Safety Assessment dated no more than six (6) months prior to the License application;
- Partnership agreement, if applicable;
- Proof of citizenship or work status (i.e., birth certificate, passport, work permit, or PR card);
- Proof of identity (i.e., passport, driver’s license, or provincial ID card)
- Proof of property insurance confirming at least $2,000,000 liability coverage and that the property will be rented;
- Proof of property ownership (i.e., title deed or recent tax bill);
- Property Standards and Safety Checklist signed by the Owner or an Authorized Agent.
Please note – a separate License is required for each Rental Housing Unit
Applications must be submitted in person by the applicant or authorized agent with written authority provided by the applicant. You need two forms of government issues ID, one with a photo, and one proving status in Canada. You can do this at the Licensing Division located here:
Suite 110 – 350 City Hall Square West
Windsor, Ontario, N9A 6S1
Don’t forget the deadline – MAY 31, 2023.
License Duration: Every Licence issued expires on May 31 of the year following issuance. In other words, if a License is obtained on November 1, 2023, it would still expire, and required a renewal application, by May 31, 2023.
License Fees: The License Application Fee is $466 for each NEW License. A License Renewal Fee of $275 is required to be submitted with the License application form, which is provided to the License Commissioner in the same manner as the original License application.
Offences and Penalties
While this is covered in the link here – in section 10 – lets just set this out straight away… there are teeth to this in the way that hurts the investment most – financially.
The penalties are separated from individual owners to corporate owners – where corporations may face a fine to the factor of 10 times the amount, potentially. Oh, and those unpaid fines if convicted are held on title as “unpaid taxes”. So pay up! Here is a breakdown of the penalties (but please read the link above for full details):
- Upon a first conviction, a fine of not less than $500 and not more than $5,000.00.
- Upon a second or subsequent conviction, a fine of not less than $500.00 and not more than $10,000.00.
- Upon conviction for a multiple offence, for each offence included in the multiple offence, a fine of not less than $500.00 and not more than $10,000.00.
- Upon a first conviction, where the person is a corporation, a fine not less than $500.00 and not more than $100,000.00.
- Upon a second or subsequent conviction, where the person is a corporation, a fine of not less than $500.00 and not more than $100,000.00.
- Upon conviction for a multiple offence, for each offence included in the multiple offence and where the person is a corporation, a fine of not less than $500.00 and not more than $100,000.00.
Personal Opinion Alert
I do not have skin in this game. I own zero rentals. However, this, to me is a difficult one to fully digest logically. On one side of the coin I am very much a proponent of having affordable housing, and rentals. People should have an option to purchase homes at a reasonable price, and that’s a difficult conversation to navigate, and for a different Blog Post (but here is a start: your first home shouldn’t be Instagram worthy). However, tenant protection is at an all time high and this makes it even more difficult to be a Landlord. While there needs to be protection for tenants when landlords that do not follow the rules, and there are, there too needs to be some assistance for owners of properties with difficult tenants, full stop. I know of many good people who have investment properties and have tenants who manipulate the system, pay no rent, and live home to home paying nothing with no repercussion for many many months. This shouldn’t be news to you, and if it is, believe it. I know Lawyers with rental properties who cannot evict their tenants who are using their home, not paying any rent, and legally have no lane to move in while they wait for the absolutely overwhelmed Landlord Tenant Board hearing – which can take, right now, up to 15 months! That’s absolutely real. Tenants know the system well. Tenants should have protection – but so should property owners.
This Pilot Program to me is a part good, part “financially incentivized” I’ll say. Should we be sure rented properties are fit for rental? Absolutely, all homes should be. Should we ensure neighbourhoods are kept to a certain standard and nuisance properties reprimanded – yes, and we do already (there’s a city hotline for properties neglected, and yes its under staffed). Should we then ask landlords to have a license and pay fees on top of paying to certify the home fit for rental? No, not in my opinion. If that’s the case, what is to stop the city requiring a Homeowners License? Sticky situation, for sure.
How about this idea – instead of making all this on the City to tick off these boxes, make insurance companies liable when acquiring INSURANCE if these items are not met? Almost impossible I know. Or perhaps there is a Tenant License? Should tenants register with a municipal board showcasing employment, rental history, proof of income, proof of insurance, and a background check? Perhaps a municipal level Landlord Tenant Board to expedite the process of conflict? That would be profound, and would alleviate the issues we have across the board. Both sides need to be accountable. For example: one of the reasons rent is higher is because of issues of non-payment. Investors wants to protect their investment too.
One thing I can postulate – this won’t make homes cheaper. It will likely make rent increase. The cost of anything is on the end user, unfortunately. I’ll be curious to see how this works out, and I’m hoping for the best on all sides – but as per usual, nobody will be happy enough.
So there you have it friends. That’s the Residential Rental License Pilot Program in a nutshell. Remember – if you are an owner of a property in these wards, please speak to a Lawyer for full legal advice (I have a few recommendations if you need). If you want to sell it, well, you can speak to me.
Resources:
City of Windsor’s Residential Rental License Page
Residential Rental License Application Form
Framework this Pilot Study Was Based On
Again, a big thank you to SimplyClose and Farhat & Associated Real Estate Lawyers for the information.
