s.120.1 — Application of guideline to previously exempt units

120.1 (1) This section applies to every rental unit that, (a) immediately before the exemption repeal date, was exempt from section 120 under subsection 6 (2), as that section read immediately before that date; and (b) on and after the exemption repeal date, is not exempt from section 120 under any provision of this Act or under the regulations. (2) In this section, “exemption repeal date” means the date subsection 3 (2) of the Rental Fairness Act, 2017 (which repeals subsection 6 (2) of this Act) comes into force; (“date d’abrogation de l’exclusion”) “previously exempt rental unit” means a rental unit described in subsection (1). (“logement locatif antérieurement exclu”) (3) One of the following sets of rules applies where the landlord of a previously exempt rental unit has given the tenant notice of a rent increase before the exemption repeal date and the amount of the rent increase provided for under the notice is more than the guideline: 1. If the notice of rent increase is given before April 20, 2017, the following rules apply: i. Despite the repeal of subsection 6 (2), as it read immediately before the exemption repeal date, by subsection 3 (2) of the Rental Fairness Act, 2017, the previously exempt rental unit continues to be exempt from the application of section 120 of this Act for the purpose of that rent increase. ii. The amount of the new rent shall be the amount set out in the notice. 2. If the notice of rent increase is given on or after April 20, 2017 and the new rent takes effect before the exemption repeal date, then, despite the rent increase having taken effect, the following rules apply: i. The amount of new rent charged to the tenant for the rental unit after the exemption repeal date shall be decreased to an amount equal to the sum of, A. the amount of rent that was charged to the tenant before the rent increase took effect, and B. a rent increase equal to the guideline increase. ii. The amount of new rent paid before the exemption repeal date that is in excess of the amount that would have been paid if the rent increase had been equal to the guideline increase for the calendar year, together with any related amount collected under subsection 106 (3), is a debt owed by the landlord to the tenant and shall be refunded to the tenant by the landlord within 60 days after the exemption repeal date. iii. If the landlord fails to refund the amount owing under subparagraph ii within 60 days after the exemption repeal date, the tenant may deduct the amount from a subsequent rent payment. 3. If the notice of rent increase is given on or after April 20, 2017 and the rent increase takes effect on or after the exemption repeal date, the following rules apply: i. The rent increase shall take effect on the date set out in the notice, subject to subparagraph ii. ii. The amount of the new rent shall not be the amount set out in the notice but shall be equal to the sum of, A. the amount of rent that was charged to the tenant before the rent increase took effect, and B. a rent increase equal to the guideline increase. (4) For greater certainty, nothing in subsection (3) validates a notice of rent increase that did not comply with section 116 at the time the notice was given. Agreements to Increase or Decrease Rent