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Tenants who live in older Ottawa apartment buildings were supposed to see a slight automatic drop in their rent on Jan. 1, but many are left wondering if they should actually pay less after getting conflicting information from their landlords.
The City of Ottawa is trying to gradually fix its property tax rates because buildings built before 2001 pay higher taxes than those built after 2001.
Last fall, the city sent letters to renters in those older buildings with seven or more units to tell them their rent would be reduced this year because landlords were paying less property tax.
But some landlords then followed up with their own letters to renters, disputing the city’s information and recommending tenants continue to pay their usual amounts.
The contradictory communication created confusion. Here’s how the situation is unfolding and what lawyers say renters could do.
Why did the city write to tenants?
When city council lowered property taxes by 4.5 per cent for multi-residential units in April 2025, it triggered an automatic rent reduction under Ontario’s Residential Tenancies Act.
That law requires the municipality to notify eligible tenants of a rent reduction when property taxes decrease by more than 2.49 per cent.
In Ottawa’s case, the decrease meant rent would drop 0.89 per cent in 2026 — roughly $16 a month or $192 a year for someone paying $2,000 a month in rent.
Coun. Theresa Kavanagh, who represents Bay ward, said the city was trying to save renters money with “this lovely little gift.”
“That’s just enough to make a wee bit of a difference,” she said.
“Many people who are living in these older buildings are people who’ve been living there a long time, and they tend to be on fixed incomes.”
On Monday, the city told CBC it issued rent‑reduction notices to 1,016 multi‑residential property owners. It estimates that between October and November 2025, it notified approximately 57,000 tenants of the required rent reduction on Jan. 1.
Bay ward Coun. Theresa Kavanagh says she’s received dozens of letters from renters confused over Ottawa’s automatic rent reduction. (Arthur White-Crummey/CBC)Why do landlords disagree with the rent reductions?
Several of the landlords’ letters acknowledged the city’s notice about reducing rent.
But while their property taxes are going down, they pointed out other municipal charges on their tax bills were going up.
“We recommend, until further notice, you continue to pay your rent as if you did not receive the city’s notice,” said one letter to tenants in Kavanagh’s ward.
David Lyman, a lawyer representing dozens of landlords on this issue, explained that Ottawa’s garbage fees have gone up “dramatically.”
Lyman said the city’s property tax estimator shows garbage charges for multi-residential buildings jumped from $91 per unit in 2024 to $167 per unit last year.
Fees for garbage and waste diversion are indeed climbing as part of the city’s updated plan for solid waste.
What’s the current situation?
Some landlords have filed applications to challenge the city’s rent reduction at the provincial Landlord and Tenant Board, an Ontario tribunal that settles disputes.
Lyman said he’s filing what’s called an A4 application of variance for his clients.
Since 2021, the board has received a combined total of 91 A4 applications. Lyman estimates the board could receive 200 to 400 such applications from Ottawa about the rent reductions this year alone.
The lawyer explained that the tribunal would look at the total change on the tax bill and could potentially side with landlords.
“I think the city got stuck in between a rock and a hard place,” Lyman said, explaining legislation requires the city to send notices when there’s a big change in property taxes but does not take into account the garbage fees.
What should renters do?
Lyman said it’s in tenants’ best interests to keep paying their usual rent.
Should the tribunal rule in the landlords’ favour, it could result in retroactive payments if tenants choose to pay less.
But Sarah Sproule, a lawyer with Community Legal Services of Ottawa, said landlords cannot force tenants to forgo the rent reduction.
Sproule said she thinks tenants can trust that the city sent out the notices with the appropriate legal basis, though she acknowledges the situation is unclear.
“The legislation has quite a few requirements for what the municipal tax decrease must look like, both in terms of quantity and when it happened and what counts as municipal taxes,” Sproule said.
The city would have issued a notice if it thought it miscalculated the property tax, she added.
“I think the most prudent course of action is for tenants to pay decreased amount [and] save a little bit of that money in case the Landlord and Tenant Board does determine that the rent in fact should have been higher all along.”