PART XII LIMITS ON TRADITIONAL MUNICIPAL TAXES
Tenants of leased premises
295 (1) This section applies with respect to a tenant of leased premises that form all or part of a property in the City if, (a) Part XXII.1 or XXII.2 of the old Municipal Act applied and this Part applies to the leased premises; and (b) the tenant’s tenancy commenced on or before December 31, 1997 and has been continuous since that date.  2006, c. 11, Sched. A, s. 295 (1). Exception (2) This section does not apply if the leased premises are classified in the multi-residential property class.  2006, c. 11, Sched. A, s. 295 (2). New leases of property (3) This section applies with respect to a tenant described in subsection (1) even if the tenant enters into a new lease for the leased premises after December 31, 1997.  2006, c. 11, Sched. A, s. 295 (3). Limitation on requirement to pay taxes (4) No tenant referred to in subsection (1) is required under any lease, despite any provision in the lease, to pay an amount on account of taxes levied for municipal and school purposes that is greater than the tenant’s cap determined under subsection (5). 2006, c. 11, Sched. A, s. 295 (4). Tenant’s cap (5) For each taxation year, the tenant’s cap referred to in subsection (4) shall be determined in accordance with the following: 1. Calculate the amount the tenant was required to pay on account of taxes for the immediately preceding year. 2. Increase the amount calculated under paragraph 1 by 5 per cent. 3. Adjust the amount determined under paragraph 2 in respect of any changes in taxes for municipal purposes applicable to the property as provided for in regulations referred to in paragraph 3 of subsection 291 (1). 4. The tenant’s cap is the amount determined under paragraph 2 and adjusted under paragraph 3.  2006, c. 11, Sched. A, s. 295 (5). Recouping of landlord’s shortfall (6) A landlord may require a tenant to pay an amount on account of taxes levied for municipal and school purposes that is more than the tenant would otherwise be required to pay under the tenant’s lease subject to the following: 1. The landlord may not require the tenant to pay an amount that would result in the tenant paying more on account of taxes levied for municipal and school purposes than is allowed under subsection (4). 2. The landlord may require a tenant to pay an amount under this subsection only to the extent necessary for the landlord to recoup any shortfall, within the meaning of paragraph 3, in respect of other leased premises that form part of the property. 3. The shortfall referred to in paragraph 2 shall be calculated by, i. determining, for each of the other leased premises to which this section applies that form part of the property, the amount, if any, by which the amount that the landlord could have required the tenant to pay under the tenant’s lease in the absence of subsection (4) exceeds the amount that the landlord may require the tenant to pay under the tenant’s lease under subsection (4), and ii. adding together the amounts determined under subparagraph i.  2006, c. 11, Sched. A, s. 295 (6). Same (7) The following apply with respect to the amount a tenant is required to pay under subsection (6): 1. The amount is deemed to be additional rent. 2. The amount is payable in the proportions and at the times that amounts in respect of taxes are payable under the lease. 3. If the lease does not provide for the payment of amounts in respect of taxes, the amount the tenant is required to pay under subsection (6) is due on the last day of the year.  2006, c. 11, Sched. A, s. 295 (7). Amounts under gross lease flow-through (8) The following apply with respect to amounts a tenant is required to pay under section 337 or 338: 1. For the purposes of subsections (4), (5) and (6), an amount the tenant is required to pay under section 337 is deemed to be an amount the tenant is required to pay under the lease on account of taxes levied for municipal and school purposes. 2. For the purposes of subsections (4), (5) and (6), an amount the tenant is required to pay under section 338 is deemed not to be an amount the tenant is required to pay under the lease on account of taxes levied for municipal and school purposes.  2006, c. 11, Sched. A, s. 295 (8). Partial year (9) If this section applies with respect to taxes attributable to part of a year, the tenant’s cap determined under subsection (5) for the year shall be reduced proportionally.  2006, c. 11, Sched. A, s. 295 (9). When section ceases to apply (10) If the tenant ceases to lease any part of the leased premises, this section does not apply with respect to the taxes attributable to the part of the year after the tenant ceases to lease that part of the leased premises and this section does not apply with respect to taxes for subsequent years.  2006, c. 11, Sched. A, s. 295 (10). Clarification of application (11) Subsection (10) applies with respect to all the taxes for the leased premises and not just the taxes attributable to the part of the leased premises the tenant ceases to lease.  2006, c. 11, Sched. A, s. 295 (11). Exception (12) This section does not apply to any part of the leased premises that was not a part of the tenant’s leased premises on December 31, 1997.  2006, c. 11, Sched. A, s. 295 (12).