What Are Ontario's New Building Codes for Rental Properties?

Just like everything else, regulations involving construction and property management change with the times. Building codes are in place to ensure buildings remain safely usable, comfortably satisfactory, and in full compliance with the law.

At Royal York Property Management, we do our best to keep our clients aware of the regulatory changes affecting their investments. This year, Ontario has brought new building codes for rental properties to the table, designed with safety, energy efficiency, and accessibility in mind. Being rated number one in property management for six years running, Royal York Property Management assures property owners of the ability to relax and diversify their portfolios while professionally managing complexities.

Competitive in the Ontario landscape, the property management portfolio is strong and now includes 22,000 properties valued in excess of $10.1 billion in combined assets. In this blog, we'll delve into these new regulations, how they affect rental properties, and all the implications for landlords and tenants alike.

Overview of Building Codes  

Purpose of Building Codes  

Building codes have been established so that structures should meet the minimum levels set for safety, health, and sustainability. They assure the occupants against possible dangers and foster the sustainability of buildings. With a clear set of guidelines, building codes help landlords build safe and liveable places to be rented by tenants while ensuring that investment values are preserved.

Previous Building Codes in Ontario  

Prior to 2024, building codes in Ontario covered requirements on structural integrity, fire safety, and basic energy efficiency. Standards covered by the building codes include electrical systems, plumbing, ventilation, and emergency exits. While these regulations were sufficient, updated standards have come to be seen as necessary due to the advancing technology of buildings and growing concerns for the environment.

Details of the 2024 Ontario Building Code  

The 2024 Ontario Building Code introduces a significant change in the way the regulation is presented and interpreted. January 1, 2025, will become a mandatory date for the application of the 2024 Building Code for all new construction projects. During the three-month transition period, until March 31, 2025, applications that have substantially complete working drawings prior to 2025 can still follow the earlier code.

After April 1st, 2025, all permit applications must be submitted according to 2024 Ontario Building Code. Property managers and landlords should be prepared for the transition in advance by familiarizing themselves with the updated requirements.

2024 Ontario Building Code: Key Changes and Updates  

Ontario has introduced critical updates to its Building Code in 2024 to harmonize many provisions with the National Building Code, but it also has a number of unique standards that meet local needs. These changes are having a large impact on many facets of building design and construction in the context of rental properties.

Energy Efficiency Standards  

It is important to point out that one of the big changes to the 2024 Ontario Building Code involves energy efficiency. According to the new code, new houses must be installed with a rough-in for a subfloor depressurization system to mitigate radon effects. This approach aligns with the National Building Code's approach to soil gas and radon. This provision ensures that new homes can easily be retrofitted if radon mitigation becomes a requirement. That is not addressed directly; the function of energy efficiency is usually seen in better insulation and windows, and it is a common aspect of building codes that help to reduce energy consumption and greenhouse gas emissions.

Safety and Accessibility Requirements  

Safeguarding and ease-of-access regulations have been totally overhauled to ensure greater safety and inclusivity of buildings. Ontario has aligned provisions on fire protection systems, including standpipes, fire alarms, and fire sprinklers, with those of the National Building Code. This means that rental properties in Ontario are held to very high fire safety standards, safeguarding both the tenants and the property itself.

Impact of Ontario’s New Building Codes on Rental Properties 

New zoning and licensing bylaws specific to multi-tenant houses came into effect on March 31, 2024. To legally operate a multi-tenant house, operators must obtain a license. Compliance with building, fire, and electrical safety codes is now mandatory under the revised regulatory framework. Landlords and property managers in charge of multi-tenant properties should make sure their buildings are up to code.

But the new codes will not be without their financial impacts: upgrading the property to those new standards involves costs, especially for older buildings. Those upfront investments, though, can be made back through savings on energy bills and possible upticks in property value down the line. In addition, properties meeting higher standards often attract a better tenant class, resulting in lower vacancy rates and more stable rental income.

Opportunities for Incentives and Grants  

There are many incentives and grants that are available to ease some of this financial burden for landlords. The Ontario Energy Savings Program will offer rebates for energy-efficient upgrading. Further, the government offers grants for accessibility improvements that make it easier for landlords to afford these modifications. The landlord should look into these to ensure he or she maximizes his/her benefits and reduces out-of-pocket expenses.

What are the benefits of new building codes for tenants? 

Major benefits of the new building codes will be derived by the tenants. Improved safety features, such as advanced fire detection systems and accessible emergency exits, provide much better peace of mind. Energy-efficient upgrades will not only save on utility costs but also provide a much more comfortable living environment. Tenants can look forward to better insulation, more consistent temperatures, and improved air quality.

The new energy efficiency standards will directly impact tenants' utility bills. High-efficiency windows, doors, and HVAC systems lessen energy consumption, thereby reducing monthly expenses. This is very important during extreme weather conditions, when efficient heating and cooling systems are likely to lower costs.

Challenges and Considerations  

Among a number of issues that landlords might face in implementing new building codes, one is the availability of qualified contractors, renovation scheduling, and minimizing the disruption of tenants. In such situations, proper planning and communication should be set forth as the milestones for overcoming these issues. Landlords should have direct coordination with the contractor and keep tenants informed of upcoming changes for smooth transitions.

The renovations that might be done by complying with new building codes could displace some of the tenants. Landlords should handle this situation carefully, provide clear information, and probably arrange for temporary housing for affected tenants. Avoiding disruption and taking care of the tenant during renovation is very important for maintaining a positive relationship with the tenant.

Future Outlook   

The long-term impacts of such new building codes will be huge. With this, Ontario is setting the pace for rentals that are more sustainable and secure. In the long run, the improvements will lead to a better quality of life for the occupants and a stable, attractive rental market for the property owners.

While the 2024 changes have been deep and wide-ranging, further amendments and fine-tuning are likely as building technology improves and concerns about the environment become more wide-ranging. It is in the interest of the landlords to keep up with potential future changes so that they stay compliant and competitive.

The new building codes for rental properties in Ontario introduce major changes with regard to safety, energy efficiency, and accessibility. The changes, however, have their challenges and costs. But the long-term benefits are enormous for landlords and tenants. To sail through this new regulatory environment, proactive and well-informed action will be called for. For more information on Royal York Property Management and our services, visit: royalyorkpropertymanagement.ca