Are "ARUs" Rent Controlled?

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By ARU, I mean Additional Residential Unit.

Sometimes referred to as an Additional Dwelling Unit, In-Law Suite, Basement Apartment, etc...

So, are they rent controlled? Well, it depends...

In Ontario, we have rent control and exceptions to rent control.

This is the main one:
Buildings not occupied on or before November 15, 2018

Think about new Apartment and Condo buildings, if they were occupied after that date, the annual Rent Control Guideline does not apply.

Most of you already know this.

But what about those newly created Additional Residential Units (ARUs)?

There is a provision in the Residential Tenancies Act that exempts certain Rental Units in homes:

Rental units in detached houses, semi-detached houses or row houses

Here’s how it works:

If you own a home, an ARU can be exempt from the Rent Control Guideline if it meets the criteria.

And this applies regardless of what year the actual home was built.

What matters is when the ARU was created.

Criteria for Exemption:

• Type of House: The rental unit must be in a detached house, semi-detached house, or row house that had no more than two residential units on or before November 15, 2018.
• Unit Features: The rental unit must have:
  • Its own bathroom and kitchen.
  • One or more entrances that can be locked inside and out.
• Creation Date: The rental unit must have become a residential unit after November 15, 2018.
• Occupancy Conditions: One of the following must be true:
  • When the rental unit was first occupied, the owner lived in another unit in the same house.
  • The rental unit was created in a space that was unfinished before it became a residential unit.

So, all of these new ARUs created in the last couple of years... they're not subject to the rent control guideline.

As housing affordability remains a primary concern, this is a great piece of knowledge to pass on to your clients looking to purchase a home and add an ARU.

Creating additional income that is not subject to rent control makes that property more desirable.