As of July 31, 2025, property owners and/or landlords in Toronto seeking to evict residential tenants to demolish a residential rental unit, convert it for non-residential use, or perform extensive repairs or renovations requiring vacant possession will be required to apply for a Rental Renovation Licence from the City of Toronto and comply with additional requirements for compensating tenants.
The Toronto Rental Renovation Licence By-Law, adopted on November 14, 2024, is comparable to Hamilton's Renovation Licence and Relocation By-law 24-055, which is in effect as of January 1, 2025.
THE RENTAL RENOVATION LICENCE BY-LAW
The City of Toronto is taking action in 2025 against "Renovictions" – a term used to describe bad faith eviction under the guise of a landlord requiring vacant possession to repair or renovate a unit. Often, renovictions are used as an attempt to circumvent rent control regulations by turning over the unit and increasing rent for the subsequent renter.
Renovictions can include refusing to allow a tenant to return post-renovation despite having exercised their right of first refusal, illegally raising the rent on a returning tenant, or not undertaking major renovations after evicting renters.
Currently, section 50(1) of the Ontario Residential Tenancies Act (RTA) permits a landlord to serve a Notice of Termination (Form N13) if they intend to demolish a rental unit, convert it for non-residential use, or perform extensive repairs or renovations requiring vacant possession. The RTA also requires that the landlord obtain a building permit (where required) for the repair or renovation work.
This process will add additional hurdles on July 31, 2025 when the Rental Renovation Licence By-Law comes into effect in the City of Toronto.
The steps landlords will be required to take, as well as the additional entitlements afforded to tenants, are set out below.
THE LICENCING PROCESS
According to the City of Toronto, to obtain a rental renovation licence, landlords will need to:
- Pre-Licence: Building Permit Approvals
- Obtain any required building permits (and any other required approvals) prior to commencing rental renovation licence application;
- Licence Application Submission within Seven Days of
Issuing N13 Notice
- Obtain a report prepared by a qualified person noting that the renovation requires vacant possession (note: a "qualified person" has not yet been defined by statute);
- Issue the N13 notice to the tenant(s);
- Post a Tenant Information Notice in the building advising tenants of the licence application;
- Complete a "Tenant Accommodation Plan" or "Tenant Compensation Plan" to:
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- provide tenant(s) who choose to return to their units with temporary, comparable housing at similar rents; OR
- provide monthly rent-gap payments (based on post-2015 average market rents) to cover the rent difference, with tenants finding their own temporary housing; AND
- provide moving allowances of $1,500 for a studio/one-bedroom unit, $2,500 for a two-or-more-bedroom unit.
- Apply for a renovation licence within seven days of issuing an N13 by paying the $700.00 application fee and providing confirmation that the above noted steps have been completed;
- Tenant Notification Period
- Notify tenants of a licence application after submission and advise on how to obtain information on eviction prevention and the Rental Renovations Licence Bylaw;
- Compensation
- Provide tenants with prescribed severance compensation where the tenant chooses not to return to the unit after the renovation or repair work is complete;
- Licence Issuance
- Once the 14-day notification period has lapsed and the Tenant Accommodation Plan or Tenant Compensation Plan has been received and deemed complete by the City, the licence is issued and the renovations can begin;
- the applicant will be required to post a copy of the licence during the renovation (on the door of the rental unit or other location on the property approved by the City).
The Rental Renovation Licence By-Law will be enacted under the authority of the City of Toronto Act. The Toronto Building Division will implement and enforce the by-law and will be responsible for developing and disseminating clear, understandable and multi-lingual public facing guidelines to support compliance.
In the October 16, 2024 Report titled "Implementing a Rental Renovation Licence Bylaw" to Address Renovictions from Toronto Building to the Planning and Housing Committee, for the purposes of the Bylaw qualified persons are recommended to be defined as "a person licensed by the Professional Engineers of Ontario (PEO) or the Ontario Architects Association (OAA)."
As of the date of this article, these official guidelines remain under development and are yet to be posted on the City of Toronto website.
However, the by-law builds upon many of the existing requirements set out under the RTA, including amendments to the RTA through Bill 97 that have not yet been brought into force – to the benefit of the tenant.
For example, tenants have long had a right to re-occupy the unit after renovations have been completed and, in most cases, are entitled to compensation following an N13 eviction notice (up to a maximum of the amount equal to 3 months' rent depending on the nature of the repairs and the number of residential units in the building).
Additionally, it remains the case that no compensation to the tenant is owed if the landlord has been ordered to demolish or repair the rental unit or complex under any Act or law.
Lastly, amendments to the RTA through Bill 97 will require a report from a qualified person confirming that the renovation or repairs are so extensive that they require vacant possession of the rental unit, but this amendment to section 50(3) of the RTA has not been brought into force.
POSSIBLE GUIDANCE FROM THE CITY OF HAMILTON
The City of Hamilton was the first municipality in Ontario to enact such a by-law. While Toronto is yet to release further guidelines, the following information has been published by the City of Hamilton pursuant to the City's Renovation Licence and Relocation By-law 24-055:
- Qualified Professional – a member in good standing with Professional Engineers Ontario or the Ontario Association of Architects. The application packages must include a letter or report from a qualified professional stating that the repair or renovation is so extensive that vacant possession of the unit is required;
- Notice of the Licence Application – Landlords must provide notice of application to tenants within five days of submitting the renovation licence application to the City
- Renewal Fee – A licence renewal fee of $125 per year is required when repairs or renovation exceeds one year from the date the renovation licence was issued;
- A copy of the Hamilton Renovation Licence Application Form can be found here;
- A full step by step guide and FAQ for the Hamilton application process can be found here.
CONCLUSION
Under this by-law, property owners would be prohibited from commencing any renovation work (where vacant possession is required) on a residential rental unit until a rental renovation licence has been obtained.
While the proposed framework is intended to balance the necessity of completing renovations and repairs on aging housing stock with the urgent need for affordable housing in Ontario, it certainly adds a number of hurdles for the well-intentioned landlord or developers seeking to manage property and projects.
Don't forget the date: July 31, 2025!
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