#

London
PO. Box 5035
267 Dundas Street
London, ON
N6A 419

CANADA

Housing Division Notice

Date: September3,2013 HDN#:2013 - 192

This applicable legislation/policy is to be implemented by the Housing Provide(s) under the following
programs:

Please note if your program is not checked, this change is not appllcable to your project.

Federal Non-Profit Housing Program (Rent Supplement Units Only)

Private Non-Profit Housing Program

-^/ Co-operative Non-Profit Housing Program
./
I

Municipal Non-Profit Housing Program (Pre-1986)

./
- Local Housing Corporation
^/

Subject: LOCAL STANDARD - LEASES/OCCUPANCY AGREEMENTS

1. PURPOSE:
To inform all housing stakeholders of the local background and compliance standard under the
Housing Seryices Act, 201f (HSA) and associated regulations related to lease/occupancy
agreements for units in Part Vll housing projects.

2. COMPLIANCE STANDARD:
The Housing Service Act,2011 establishes the service manager's authority to set local
standards on prescribed matters. Under section 75 of the Act, a Housing Provider shall operate
a Part Vll housing project and govern itself in accordance with both the prescribed provincial
requirements and local standards made by the service manager. A service manager may only
make local standards with respect to prescribed matters. These prescribed matters are outlined
in section 100 of O.Reg 367111 and include the following:

i. Conflicts of lnterest of Directors, Employees and Agents of a Housing Provider.

íi. The minimum number of meetings of the Board of Directors of a Housing Provider that
must be held.
iii. The remuneration of the Directors of a Housing Provider.

...12
 Page 2
HDN 2013 - 192

iv. property management relating to Part Vll housing projects, including the procurement of,
and contracts for, property management services.
v. Leases for units in Part Vll housing projects.
vi. Multi-year financial Plans.

A local standard does not apply to the extent that it conflicts with a provincial requirement,
unless the provincial requirement provides otherwise.

3. LOCAL STANDARD:

(1) Every Housing Provider and every household that rents or occupies a rent-geared-to-
' ' income unit or a market rent unit in the Housing Provider's housing site shall enter into a
lease or, in the case of a co-operative housing unit, an occupancy agreement that meets the
following requirements:
i. The term of the lease/occupancy agreement must not exceed one year.
¡¡. The lease or agreement must specify the amount of renUhousing charge that would
be payabte if the unit were a market unit, the amount of geared-to-income
renyhousing charge payable for one month by the household as determined by the
Seruice tvta-nagerlor'its delegate), and all other charges that the Housing Provider
may impose ùnder Housing Seryrbes Acf, the Cooperative Corporafions Acf, the
Residential Tenancies Acl 2006 and associated Regulations

(2) The lease or agreement must:

i. restrict the occupancy of the unit to the members of the household named at the time
the lease or is entered into and any additional persons whose occupation
"grê"mént
of the unit is agreed to subsequently by the Housing Provider,
ii. require the household to advise the Housing Provider of any persons who cease to
occupy the unit or commence to occupy the unit after the lease or agreement is
executed, and
¡ii. prohibit the assignment of the lease or the agreement, as the case may be, and
prohibit the household from renting or subletting the unit.

(3) The lease or agreement must provide that the amount of the geared-to-income renUhousing
charge payablã by the household for the unit is subject to change if the household's financial
circumstan."r to such an extent that the Service Manager (or its delegate)
determines that"h"nge
the ãmount of the geared-to-income renUhousing charge payable by the
household should change or that the household is no longer eligible for rent-geared{o-
income assistance due Io legislation changes or where the maximum rent is amended by
provincial Rent Control Guidelines.

(a) The lease or agreement must be executed by every individual:

i. 16 y""É of age or older whose income is taken into consideration
or
in determining the
amount of renuhousing charge payable by the household,
ii. who is a member of the household and at least 18 years of age.

l3
 Page 3
HDN 2013 - 192

(b) A Housing Provider shall establish a policy and notification procedures for the temporary
accommoãation of guests in its rentgeared-to-income units and shall provide a copy of the
rules in either written or electronic format to the Service Manager upon request and to the
households residing in those units (at initial move in and as amended from time to time)

(6) A Housing Provider shall establish rules for the internal transfer of households receiving
rent-geared-to-income assistance and shall provide a copy of the rules in either written or
electionic format to the Service Manager upon request and to the households residin! in
those units (at initial move in and as amended from time to time).

4. ACTION:

The local standard in this Housing Division Notice (HDN) is effective immediately.

The HDN is to be reviewed by the Board of Directors and noted within the respective agenda
and meeting minutes at the earliest possible opportunity.

As this HDN specifically addresses matters pertaining to the Board, including but not limited to
rules of order and governance, and/or matters requiring specific Board action including leases
and occupancy agreements, it must be received and acknowledqed bv Board. A copy of this
HDN shail be retained with the corporate bylaws and made available for reference and review.

5. AUTHORIZATION:

Original signed by

Director, Municipal Housing

Appendix I - Background and Additional lnformation

 Appendix I
Background and Additional lnformation

HDN: 2013-192
Date: September 3,2013
Subject: Local Standard - Lease/Occupancy Agreement

Lease/Occu pancy Agreement

A lease/occupancy agreement is a contract between the Housing Provider and the tenanVmember that
grants occupation during a certain period in exchange for a specified rent. As such, they come under
the contract laws of the Province and can protect landlords as much as tenants/members. lt is vital,
therefore, for Housing Providers to ensure that all lease/occupancy agreements contain the correct
provisions and conditions.

The lease/occupancy agreement must outline the terms of tenancy and the regulations (Housing
Seryices Act Residential Tenancies Act, Co-operatives Corporations Acf, Corporate By-laws, and
Personal lnformation Protection and Electronic documents Act (PIPEDA) etc.) with which the tenant
must comply in order to occupy a unit and receive rent-geared-to-income subsidy, if eligible,

It is essential that a lease/occupancy agreement be as transparent as possible with tenants about their
rights and obligations. As such, lease/occupancy agreements should contain references to local rules
regarding eligibility for rent-geared{o-income assistance (e.9. local occupancy standards, absence
from unit, ceasing to meet occupancy standards, guest policy, definition of income, internal transfer
policy, sharing of common facilities, etc). This information can be provided in the form of a tenant
handbook, included in corporate by-laws or attached as schedules (recommended method) to the
lease/occupancy agreement.

Housing Providers must provide prospective tenants/members with a lease/occupancy agreement to

review and sign before moving into unit. As a best practice, Housing Providers should schedule an
appointment for lease/occupancy signing and key pick-up and send the lease/occupancy out in
advance. The appointment should be used to review important details of the lease/occupancy
agreement verbally with the tenant initialing the important statements to indicate they have read and
understand them.

Lease/occupancy agreements sometimes inadvertently contain provisions that are unlawful, or perhaps
were at one time lawful under former legislation but are not any longer. While not necessarily harmful,
they are completely unenforceable, despite the fact both parties may have agreed to the terms.
However, they may have some deterrent value. All lease/occupancy agreements should be reviewed
by legal representation as an important legal document.

Lease/Occupancy Agreement Renewal

Even though the RGI lease/occupancy agreement can have a term of no longer than one year, it is not
necessary to sign a whole new agreement with the RGI household every year or when the RGI
changes. Housing Providers can extend the terms and conditions of the lease/occupancy agreement
by executing a lease/occupancy agreement addendum. Any addendum must state the new market rent
and the RGI rent as well as any additional charges that the tenant is required to pay. Addenda which
increase the market rent only (not the RGI rent) cannot be issued more frequently than every 12
months (or as permissible under co-ops by-laws) for either market or RGI tenants and must adhere to
the notice requirements for RGI rent changes in the HSA.
For market rent tenants a notice of rent increase which complies with the RIA (90 day notice of
increase, no increases more frequently than every 12 months) or a co-op's by-law is sufficient. lf
Housing Providers choose this option, after the initial term of the lease/occupancy agreement, the
tenancy becomes a month{o-month tenancy under the same terms and conditions of the original
lease/occupancy agreement. Housing Providers are not able to change one year lease/occupancy
agreements until the term is up (unless agreed to by the tenant). lf a Housing Provider's tenancy is
month-to-month, the tenant can be asked to sign a new lease/occupancy agreement any time but they
are not obligated to do so.

For both RGI and market tenants, Housing Providers will want to sign a new lease/occupancy
agreement if there has been a change in household composition required to sign the lease. lf a new
memþer is added to the lease/occupancy agreement (e.9. someone who turns 18 or a new partner who
moves in) this person must sign an addendum that should be attached to the lease/occupancy
agreement. Housing Providers cannot force the original tenant to sign a new lease/occupancy
agreement, which makes the addendum the practical solution.

Financial Testing
Under the current RGI service agreement, Housing Providers are responsible for collecting the annual
income verification and financial testing of RGI households. Even though the definition of income is no
longer required to be included in the lease/occupancy agreement, Housing Providers should include it
along with the eligibility criteria for qualifying for rent-geared-to-income assistance. This will serve
Housing Providers well at the Landlord and Tenant Board or in court proceedings with an application
based on misrepresentation of income.

Gommunication
Before executing a new lease/occupancy agreement, or renewing an existing lease, Housing Providers
should let tenants/members know what changes to expect and why they are necessary.
Tenants/members will need to be assured that their rights and privileges are protected.

This local standard or sample tenancy agreement provided by ONPHA or CHF is not intended as a
substitute for "legal advice". (Certain provisions of any Tenancy Agreement may not be enforceable, as
the rights and obligations expressed in any agreement are subject to the provisions of the Residential
Tenancies Act and other relevant law. The RIA plainly provides that, except in very limited
circumstances, "a provision in the tenancy agreement that is inconsistent with this Act or the regulations
is void".)

Resources - sample leases or occupancy agreements can be obtained through the Housinq Division,
Ontario Non-Profit Housinq Association or Co-operative Housinq Federation.

Appendix 1-Background and Additional lnformation Page 2 o1 2