GUEST BLOG. According to the announcement made by Valérie Plante , the mayor of Montreal, on February 15, 2022, a certain number of rental property owners will have to be certified from next year and declare the rents they charge. This is the realization of one of his electoral campaign promises.
Here is the first information available on this subject:
The City of Montreal's future tools for rental real estate
It is the first tool of this kind in Quebec. The entry into force of the “Responsible Owner” certification is planned for 2023 for buildings with more than 100 housing units. Subsequently, it will gradually extend to smaller buildings (from 8 housing units) until 2027.
According to the City, this measure should concern 12,000 buildings, for a total of 250,000 apartments, or approximately 35% of Montreal's rental stock.
How to be certified as a “Responsible Owner”?
Every five years , owners of buildings with 8 or more units will have to prove that the rented units are adequately maintained, in terms of structure and health. To be certified, they must provide:
A certificate concerning the condition of their building, with supporting preventive inspection;
A corrective action plan, if applicable;
A declaration of the rents applied.
Certification will be both a preventive and coercive tool . Those who do not comply with this new obligation, or simply fail to do so, will receive a statement of offense for which the bill could be very steep. We are talking about $2,500 per door and per day of delay if the owner is a natural person, $5,000 per door and per day of delay if the owner is a legal entity.
A lease register
This new certification will be accompanied by a register of leases, which will list the rents charged by large owners for each of their apartments. The amount of rent will be made known to the public on an online platform .
As with the certificate required to obtain “Responsible Owner” certification, the prices charged must only be declared every five years. The modalities still need to be discussed so that the issue of privacy protection is fully taken into account.
A mixed reception among associations in the real estate world
Some associations of owners or tenants spoke out in the media following this press release. Some are in favor of this project, others are on the contrary unfavorable and deplore a lack of consultation with the community before this announcement.
Here is a summary of the main opinions expressed:
The Corporation of Real Estate Owners of Quebec (CORPIQ) is disappointed not to have been consulted in this process and prefers not to comment before having better knowledge of the subject.
The Association of Housing Committees and Tenant Associations of Quebec (RCLALQ) believes that the tools announced by the City of Montreal are still insufficient to fully protect tenants. They also wonder about the ways in which the control of declarations will be carried out. In addition, the RCLALQ considers that a provincial register, and not just at the municipal level, is necessary.
The Quebec Landlords Association (APQ) has announced that it is totally against it and plans to defend its vision of things. This association finds no interest in this initiative, because these aspects already fall under the responsibilities of the Administrative Housing Tribunal and the Régie du logement du Québec. In addition, the preventive inspection necessary to obtain certification will represent additional costs for owners.
The Popular Action Front in Urban Redevelopment (FRAPRU) , for its part, is in favor of certification of owners. However, he believes that it is regrettable to only target buildings with more than 8 housing units even though they are in the minority.
The objective of the City of Montreal and the limits of these tools
In Montreal, the majority of housing was built before 1970. For the City, certification is therefore also a way of guaranteeing the protection of an aging rental stock .
With certification, the City of Montreal intends to ensure that it has safe and healthy housing on its territory , but also to reduce the risks associated with renovations. In fact, many health and safety problems could be easily resolved with preventative maintenance .
However, it has the limitation of being based only on the declarations of the owners who will undertake to carry out work. No checks will be carried out in the accommodation afterwards. Certification therefore does not represent a guarantee of compliance for tenants.
Regarding the lease register, the objective is to allow tenants to contest the amount of their rent if they notice an abusive increase. But the fact that the declarations are not annual limits its interest somewhat.
The “Responsible Owner” certification could be beneficial to guarantee the quality of apartments rented in Montreal. But it could have a counterproductive effect on the affordability of this housing . Indeed, owners could choose to pass on the costs generated in the amount of rent.
Next Steps Toward Owner Certification
The proposal concerning the “Responsible Owners” certification was to be presented this week to the executive committee and the Montreal city council for adoption. After which, the Permanent Commission on Housing will be mandated to organize a public consultation.
By: Xpertsource
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