In recent months there has been a noticeable increase of renovation and retrofitting activities in apartment buildings in the GTA. Most of these renovations are related to upgrades to promote energy conservation. Renovations include fixes to faulty plumbing and heating systems, installing smart sub-meters, and replacement of ageing balcony doors and windows for more energy efficient ones. While general repairs and renovations are long overdue in older buildings there are other newer buildings undergoing ‘retrofitting’ to reduce energy costs. Energy saving is a noble goal but we should not rule out the possibility of unscrupulous business practices in this burgeoning ‘green industry’.
Tenants should be aware that renovation activities related to energy saving fall under ’Capital expenditures’ and not ‘Operating expenditures’. This has implications for an Above Guideline Increase (AGI). What we have is a situation where landlords are doing significant renovations to save energy and the cost of those renovations naturally will be passed on to tenants. Since these renovations fall in the category of ‘capital expenditures’ the landlord can apply to the Landlord and Tenant Board for an Above Guideline Increase. Tenants must not lose sight of the fact that since renovated buildings have become more energy efficient this will result in lower energy costs. In other words, landlords will realize savings. **(See additional note on Capital Expenditures at the end)
Tenants need to give consideration to some negative aspects of these renovation and retrofitting activities. For example:
1. Workmanship – It is recommended that tenants pay attention to the workmanship of the renovations. Since the windows will be under warranty for a specific period of time any corrective work that is required will be done at no cost the landlord. Only after the warranty period has expired will there be any cost to the landlord for resolving the contractor’s substandard work. Tenant should not hesitate to submit written complaints for substandard work.
2. Air-conditioners – Based on what tenants in some buildings have said, the size of the new energy efficient windows might not allow for large air-conditioners. Tenants might have to opt for indoor air-conditioners or fans.
3. Smart Sub-meters – Tenants need to acquaint themselves with all the pros and cons of agreeing to the installation of Smart sub-meters in their unit. Tenants might not realize savings if major electrical equipment such as fridges and stoves that come with the unit are not energy efficient. Tenants should not allow themselves to be pressured into signing leases that require the installation of these devices as there too many unresolved issues regarding the rent reduction offered by landlords.
4. Security concerns –Tenants should be aware and security conscious at all times. It could be a coincidence that some buildings have experienced robberies and break-ins after outside contractors have completed work. Robberies and break-ins can occur at any time whether there are renovations taking place or not. Based on the regulations of the Residential Tenancies Act, tenants cannot prevent contractors from entering their units after the landlord has served them proper notice. As a precaution tenants should consider being present when the renovations are taking place. A good idea would be for tenants not to have valuable items on display in their unit. Tenants should also ensure they have top quality locks on their doors and also ask neighbouring tenants to keep a lookout for suspicious activity at any time.
5. Tenant comfort – Although the new windows and balcony doors will save energy, there are many older buildings in the GTA where this might not be the case. The reason is that tenants in older buildings have no control over thermostats or radiator heat. In older buildings some floors tend to be either colder or warmer than others. If the unit is too cold the tenant might turn on the oven to keep warm. And, if the unit is too hot in the winter some tenants resort to opening their windows or balcony doors to cool their unit. So much for energy saving!
Arguably the biggest concern for tenants is an Above Guideline Increase (AGI) in rent. Many renters on modest incomes find that the rental costs in most parts of the GTA are unaffordable. Tenants should take note that the landlord will have 21 months to make an AGI application after the renovations and retrofitting are completed. If or when that time comes, tenants need to unite to deal with the landlord’s application for an Above Guideline Increase. An active Tenant Association is the ideal mechanism to deal effectively with that situation.
—————————————————
Note on Capital Expenditures:
Existing tenants should be aware that repairs or replacement of cabinet fixtures in their unit come under ‘Capital Expenditures’. If these fixtures cannot be repaired and must be replaced the landlord cannot raise rents arbitrarily. The Landlord must apply to the Landlord and Tenant Board for approval of a rent increase above the current Annual Guideline. This regulation applies to buildings 18 years old or over. The permitted Above Guideline Increase for 2010 is 3.15%. Refer to the Annual Rent Increase Guideline 2010 publication provided by the Landlord and Tenant Board for more details.
East York Tenants Group 
Some time ago landlords in my building were provided with financial incentives to replace existing toilets and faucets in our building with those using less water… Good move to be green, right! But, guess what? These toilets were totally inefficient, wasted more water and required ongoing maintenance because they are inferior. And tenants with washing machines had a problem with the new attachment on their faucets to reduce water flow …. the result was that tenants in the building with plumbing know-how removed the energy saving devices on the faucet attachments and replaced them with the regular attachments to allow a greater flow of water. And to think the landlord had received a government incentive for promoting conservation!
***
Very useful information. I live in an old building, (probably well over 30 years old) and have been renting there for over 19 years. The cabinets and cupboards are in not too good shape so I talked to management about the awful state of they are in. I was told that these items can be replaced but we will have a rent increase of about $75 or more per month. They never said anything about repairs and I don’t think they can be repaired as they are in a horrible state. I only just had a regular annual rent increase and certainly can’t afford that kind of increase so did not follow through. Little did I know that it was against the Landlord & Tenant regulations for the landlord to do that sort of thing. How come tenants aren’t aware of this regulation? Thanks very much for this information.
Excellent Article! Tenants should pay attention to the examples listed in the article about the negative aspects of the renovations.
I share BarbieLady’s sentiment, “Yes … tenants will be screwed over”. In addition to the above guideline increases if the landlord keeps the savings that will result from the retrofitting — i.e. reductions in heat and electricity bills, we will be screwed over twice.
Landlords are having a sweet deal. We the tenants are paying for capital expenditures and renovations as if we own the building and to add insult to injury the cost becomes a permenant rent. Go figure!
Windows and balcony doors were replaced in my building and I like them. At least insects won’t be able to get in through the new balcony door.
I suspect that all these renovations and retrofitting will be ongoing around the GTA to avoid the HST. These renovations etc. will save energy but those saving will not be passed on to renters. The savings from energy conservation will be added to the landlord’s profits.
The Ontario govt. doesnt care about us and all this talk about the HST will stimulate the economy is nothing but a sneaky tax grab. I do embrace energy saving but am very concerned about how much my rent will rise.
Great article. This conservation stuff is totally for profits and is sanctioned by govt. Government & business are capitalizing on our collective guilt about damaging the environment. It is all about money! Landlords certainly don’t like being reminded that they are gouging tenants.
According to McGuinty we are supposed to believe that the HSTwill not to affect tenants! My question is …..How will we know whether HST costs have or have not been included in all these retrofitting initiatives when the landlords goes after the above guideline increase??? Answer is … Tenants will be thoroughly screwed from now on!
There is lots of renovations, retrofitting, and installing smart meters in apartment buildings all over the GTA. As you say energy conservation is a noble cause but there is a lot of ‘green greed’ going on out there. Nowadays so many are into ‘greening’ that it is now our latest exciting new industry! Yes…..tenants will be screwed over! The HST associated with these activities will affect tenants! Dont’ forget that the HST will be included in the increase in annual guidelines rent increase for 2010 (rent increases are tied to the CPI)…. & also above guideline increase from here on it…. i.e. forever.
Re. the renovations and installation of smart sub-meters… tenants who have agreed to the installation of these meters CANNOT go to the Landlord and Tenant Board to fight an Above Guideline increase on their rent since their rent is not affected. They have also been conned into believing they have a fair rent reduction when they sign their lease. Those who don’t have submeters will be able to to go the LTB but, will they win their case? Can tenants ever get a fair hearing at the LTB?
Interesting! So there will be ‘savings’ for landlords and ‘increased rental costs’ for us renters! Why am I not surprised. So we are all heading for the LTB to fight an unfair AGI! There has been so much confusing information on smart meters and retrofitting. My biggest concern is having a huge increase in my rent.