Category: Canadian Landlords

Ontario Lawyers Help Tenants Pro Bono

As per the CBC, The Ontario Bar Association has launched a new pro bono legal service to assist tenants who are at risk of losing their homes when residential evictions resume soon across the province. Ontario’s Landlord and Tenant Board is expected to begin working through a giant backlog of cases as enforcement resumes more widely across the province. The new service offers 30 minutes of free legal advice.

“There will be a wave of hearings and there will be a wave of evictions.” – Doug Ferguson, chair of the OBA’s pro bono work.

Lawyers who volunteer for the program will walk clients through their tenant rights, and help them to negotiate agreements with landlords, such as deferring payments or delaying an eventual move-out date. The bar association says it has enough volunteer lawyers to help up to 100 clients per week. Tenants in special and complicated circumstances can receive more than the allocated 30 minutes of time if the individual lawyer agrees to help them further.

The Canada Mortgage and Housing Corporation released a survey last month that indicated rent arrears increased nationally due to COVID-19. 58.3 per cent of survey respondents reporting a higher rent arrears rate in 2020 than the previous year. Toronto recorded the highest arrears rate, with 34,858 units, in arrears in 2020. That represents about 10% of Toronto’s market. The estimated amount of unpaid rent reached $55 million in Toronto last year.

Canadian Bank Survey Reveals Interesting Landlord Statistics

More than one quarter of Canadian homeowners are landlords

Back in May, CIBC published a survey entitled So… you wanna be a landlord? Tax considerations for rental properties. The report outlines tax considerations for homeowners who have rental income or are planning to earn it. According to report, more than one in four Canadian homeowners are either already landlords (15%) or plan to earn rental income (11%) by renting out space in their primary residence or from a separate rental property. And, nearly two in five (37%) homeowners say they’d opt for a home with a source of rental income if buying a home today. To quote the report directly – “The income and tax benefits from renting a property or space in a home are worth the headache.”

The poll found that homeowners with a separate rental property earn on average $2,189 per month—50% more than their monthly costs. Those who rent out space in their home reduce their housing costs by as much as 70%. Seventy-four percent of landlords believe the benefits of tax deductions make owning an investment property a good investment even if it carries a negative cash flow. A third of all landlords who own a separate rental property say their top reason to invest is to generate income now (15%) or upon retirement (19%).

The poll findings reveal that Canadians aged 18-34 are more likely to be landlords than any other age group.  Almost half (47 per cent) of millennial homeowners are already landlords, compared to only 29 per cent of homeowners aged 35-54 and 12 per cent of those aged 55 and over.

Twice as many millennial homeowners than baby boomers say that if they bought a home today they would choose one with a source of rental income.

Read the report here.

Kathleen Wynne Makes An Attempt To Mitigate Lease and Tenancy Issues

*Photo by Jason Hargrove

Kathleen Wynne and Minister of Housing Peter Milczyn have introduced a new standardized lease in Ontario and guide book, set to begin use by the province’s private landlords and property management companies by the end of April. The government says it will better protect tenants from illegal terms and conditions on leases by simplifying language and making the overall process easier to understand. The associated guidebook will be printed in 21 different languages. The province is making a concerted effort to reduce the number of issues associated with residential tenancies while protecting the interests of tenants and landlords alike. To many who have long complained that the formal process of resolving issues between landlords and tenants has been long winded and complex (me included), this is a step in the right direction. With that said, and as per the Toronto Star, the real reason the province has rolled this out is to protect Ontario’s tenants from what this government considers to be frequent unethical attempts by landlords to get tenants to agree to illegal terms without their knowledge. So…you know. It’s political. This follows new rent control legislation that Wynne’s Liberals introduced last year.

The standard lease is essentially a plain English or French document that would be common to all tenants and landlords across the province, making it very clear and easy for a tenant to understand what it is they are agreeing to.” – Minister of Housing Peter Milczyn

Tenants rights advocates are all over this. Geordie Dent, Executive Director of the Federation of Metro Tenants Associations, characterizes the vast majority, if not every single lease in Ontario, as including something illegal in it. Clauses that don’t allow pets, require post-dated cheques, or stipulate the landlord can give a tenant notice that they have to leave at any time are all void.

“Almost every lease in Ontario, you could find something illegal,” -Geordie Dent/FMTA.

The new lease will apply  to residential tenant properties, but not care homes, mobile home parks, land lease communities and most social housing. There might be some exclusions under co-operative housing as well.

Quebec Landlords Introduce No Weed Clauses In Leases

July 1st, 2018 marks the day the drug will be legal, but landlords are taking steps to ban smoking and growing pot in units which fuels what will ultimately be a national debate

Under Quebec’s proposed marijuana law, residents will be allowed to use marijuana recreationally in their homes but won’t be permitted to grow cannabis for personal use. Many landlords have already sent notices to tenants informing them they won’t be allowed to smoke weed in their apartments. According to the CBC, landlords are introducing clauses and conditions to get a handle on what many, if not most, assume will be an emboldened and more casual approach to smoking pot.

Kevin Lebeau, a spokesperson for the Quebec Landlords Association, thinks most people find the odour and presence of marijuana unpleasant and believes landlords need to act in the best interest of all of their tenants – including many who he believes will be vehemently against it.

“It diminishes your enjoyment of your apartment. For some people it is a health issue and other people don’t want their children exposed to this at all.” -Kevin Lebeau

In a recent association poll, a majority of members anticipate a significant increase in tenant complaints. As a result, a comparable majority has also indicated they plan to prohibit smoking marijuana inside their buildings altogether. This has put them directly in conflict with various tenant rights groups across the province who are questioning whether the smoking prohibitions will be legal once marijuana itself is legalized. The tenants’ association of Sherbrooke, Que., argues that banning tenants from smoking marijuana inside their homes will be discriminatory after July 1st. Other tenant’s rights advocates argue that since they are paying for the apartment, they should be entitled to consume cannabis or cigarettes without fear of consequence. Any position to the contrary is discriminatory.

“The landlord doesn’t have the absolute right to do whatever he or she wants at any time.” – Kevin Wright, tenant’s rights advocate.

Opinion: Neither does the tenant

Here are the facts. As of right now, marijuana is nationally illegal. Most Canadians support legalization and regulation of what is widely perceived to be a generally benign substance that has been vilified and historically  mischaracterized in the media and by the government for decades. Many, if not most people, consider it something that has benefits for those who suffer and those same people, generally speaking, consider it to be a substance that is less harmful than alcohol and cigarettes, which are both legal and regulated, and have been for years.

There is no law preventing you from smoking or growing cannabis in a rented unit. If your consumption or growing of marijuana impedes the use or enjoyment of another tenant’s unit or creates an issue for the landlord themselves (the landlord reserves the right to have a preference for a smoke free building or unit), then there is a problem. The landlord can pursue a provincially supported judgement against the tenant or an eviction if that is the case, and they should have the right to do that.

We need to ask ourselves if anything is served by conveniently dismissing certain realities or creating false equivalencies when it comes to this issue. Societally, we appreciate the right to clean air, personal space, and health. That’s why we have laws when it comes to not smoking in restaurants, in cars with children, or on planes.

“Smoking” cannabis is defined as the inhalation of smoke or vapors released by heating the flowers, leaves, or extracts of cannabis and releasing the main psychoactive chemical, Δ9–tetrahydrocannabinol (THC), which is absorbed into the bloodstream via the lungs. When you smoke weed, in most cases, the process is creating a smell. That smell comes from compounds made in the plant called terpenes or terpenoids. Not all weed stinks, but in the vast majority of cases, it will produce a noticeable scent. It can and often does, smell bad, and lingers in homes and apartments – much like cigarette smoke. It’s also a psychoactive substance. Exposure to the second hand smoke of cannabis is not exactly pleasant for anyone, kids or adults.

We put value on consideration and respect for other people’s rights to enjoying their environment and space. Why doesn’t that apply here? Because it is treated and increasingly categorized as a medicine for people? Because it is inevitably going to be legal? Because people have been unjustly jailed and discriminated against because of their weed habits? Because we feel people need to get over their own hang ups and misconceptions about a natural plant that has never been the cause of death when prescription drugs and booze kill more people in a day than weed ever has? Because the time is now to make people’s lives better with deserved access to something that will reduce suffering? All of the aforementioned might be true – but we got off topic pretty quickly there.

Alcohol is legal, however, if you were producing small batches of potato vodka out of your apartment without your landlord’s knowledge, and that process was impeding the enjoyment of the unit for others or created an elevation of fire risk or informed the environment in a way that was not in the interest of the owner (i.e. odour), would we be crying foul? What entitles us to do whatever we want in a rented apartment? If a landlord wants a smoke free environment, then why is that discriminatory? What is preventing people from smoking outside – like we ask them to do in most places like hospitals, libraries, or museums currently? You should be able to do whatever it is you like in a home you own, but when you’re renting, the landlord has a reasonable right to preserve the unit he is leasing to you and protect the interests and rights of the other people who do the same thing – because – they own the premises and assume most if not all of the risk. If you that doesn’t work for you, then you have the right to find a place that does.

 

Criminal Fraudsters Too Often Effectively Game Provincial Legislation

The eviction process in Ontario, Nova Scotia and Quebec typically takes between 3½ to five months. Due diligence is an absolute essential.

Go Public published a really interesting story this week about a landlord in Bedford, Nova Scotia who got burned by a professional tenant, badly. Elizabeth Anne Critchley was renting a duplex from Jim Johnson, and managed to not only secure exceptions for not paying her rent  – but also loans by playing on her landlord’s sympathy. Critchley was a professional. Other known aliases are Betty Drake, Betty Burns and Elizabeth Anne Drake, and she has a criminal record that dates back more than 25 years and includes more than 120 convictions, many of them for fraud in Nova Scotia, Prince Edward Island and Ontario.  By the time Johnson went to the Nova Scotia Residential Tenancies office in May, his financial situation had gone from bad to worse. CBC had reported on her sentencing in an unrelated fraud scheme back in 2014. She’s as bad news as it gets. She pleaded guilty to one count of fraud in 2014 and spent a year in jail when she defrauded a low-income Charlottetown couple.

Here’s the thing. Johnson didn’t do his due diligence. He did not run a background check on her. His mistake in trusting a bad character was not helped by a system in Nova Scotia that many consider to be more tenant friendly than balanced and that facilitates this kind of fraud. Johnson said the system moved so slowly, it allowed her to live in his duplex for three more months without paying a cent. All the while, Critchley was preparing for her next victim. She engaged Terry Gerard to rent Johnson’s duplex, using the name Betty Drake, claiming she was the owner and lived in the other unit. Tanya Gerrard gave almost $1,100 to Critchley in cash when she answered a rental ad for half a duplex. Critchley now faces charges related to Johnson, Gerrard and others, including two counts of fraud over $5,000.

“The tenancy board, in my opinion, takes care of the tenants and the landlords are on their own.”

Too many renters are getting away with not paying rent, then appealing eviction orders. The Toronto Star reported on the issue last year, hitting on a series of instances where professional tenants clearly demonstrate a strategic and intimate knowledge of bending rules and doing things just at the right time – like in the case of Eldebron Holdings vs. Jeffrey Mason.

Mason was renting a unit for $1700 a month. The only payment that cleared was his first. When the landlord filed an eviction application with the Landlord and Tenant Board in November, the tenancy was terminated and the tenant ordered to vacate the unit. On the last day before the eviction could take place, the tenant filed an appeal – buying more time. When the Divisional Court hearing took place in April, the landlord disclosed that the tenant’s previous landlord had been in court on a similar set of circumstances in May 2015.

Think that’s bad? How about the case of James Regan? How about Nina Willis? How about Adam Buttigieg?

A big part of the problem that leads to such long lead times before someone is officially evicted? Delays. The Federation of Rental-Housing Providers in Ontario says delays are happening in each step of the eviction process. They’re not helpful at all. They include but are not limited to…

  • Statutory delays, which means the legislated time landlords have to wait before taking action.
  • Hearing/order issuing delays, which is the amount of time landlords have to wait to get a hearing and then an eviction order after the hearing.
  • Enforcement delays, which is the number of days landlords typically wait for either a sheriff or a private bailiff to enforce an eviction order.

Provincial registries of the worst and most frequent offenders should be part of the solution.

Ontario MPP Ernie Hardeman says part of the solution should be a provincial registry of repeat problem tenants who exploit the system’s flaws. Such a list could be referenced before renting out a unit and would likely reduce a significant number of instances where an eviction order is being sought in the first place.

“We need a system to be able to find people who are doing this professionally, who have figured the system out”

Landlords often make the mistake of giving problematic tenants too much time to rectify a problem or being too lenient. Once they get wise, they realize they’re waiting months to get to the tribunal stage where an eviction notice is formally issued. Earlier this year, Ontario made changes to its Residential Tenancies Act, aiming to strike a “fair” balance between the rights of landlords and tenants. It actually ended up doing the opposite. Tenants who fail to show up at a first hearing now automatically get a second one that sometimes takes more than a month to reschedule. Meanwhile units are lived in by people who often have done this over and over again, and often simply move on and do it again to someone else.

 

Ontario Landlords Are Now Required To Pay Tenants If They Evict On The Basis of Personal Use

Tenants are now entitled to a full month’s rent as compensation if units used by landlords or their families

As of September 1st, the provincial law in Ontario has changed. When a landlord ends a tenancy to have family member move in or for their own personal claimed use, people evicted must receive compensation. Alternatively, landlords can offer tenants another acceptable rental unit. Landlords are also required to express an “intent to occupy” for at least a year. These measures are designed to discourage landlords from converting units into short term rentals or re-renting the units at a higher rent as a result of a hot market, like in Toronto. Breaking any aspect of this new law can garner a fine of up to $25,000.

“When a tenant is evicted through no fault of their own, they are forced to scramble to find new accommodations and cover the costs of a sudden move,”  – Housing Minister Peter Milczyn

This has proven to be an extraordinarily busy year of tweaking the Ontario Residential Tenancies Act (formally referred to as the Rental Fairness Act), courtesy of Kathleen Wynne’s Liberal government. The changes are an element of her housing plan announced this spring, which included expanding rent controls to all rental units in the province, not just those built before 1991, per the previous rule.

It’s safe to say that landlords aren’t exactly happy about these new rules, especially in a city like Toronto where the vacancy rate has been hovering at about 1%. There is significantly more demand than supply.

“This will have a very significant impact on small landlords and a very significant impact on condominiums,” – Jim Murphy/Federation of Rental-Housing Providers of Ontario.

Regardless, tenant advocates have been reporting wide spread abuse of the N12 form in the highly sought condo market in Toronto, and many are welcoming this change.

B.C. RTB Rent Increase Creating Tough Dialogue With Politicians

Much Like In Toronto, The Issue Is Supply

As per the CBC, The B.C. Residential Tenancy Branch has set the maximum allowable rent increase for 2018 at four per cent — making it the largest potential rent increase in five years. Much like in most other provinces in Canada, each year, the branch sets the maximum allowable percentage by which landlords are legally permitted to increase rents. An increase of more than 4 % has only occurred four times in the last 13 years. 4.6% in 2004. 4.0% in 2006 and 2007, and 4.3 % in 2012. This has raised the eyebrows of politicians in the province because of a pronounced rental housing crisis in Vancouver.

According to data tracked by Canada Mortgage and Housing Corporation, rents in Metro Vancouver had a sharp increase of 6.4 per cent in 2016 …. even though the rental cap that year was 2.9 per cent in 2016. Rent increases are typically capped at two per cent plus inflation, but this only applies to month-to-month tenancies. The big increase is explained by landlords typically asking for new fixed term leases after an initial one lapses. Fixed-term leases lock-in renters’ tenancy and rents for a set period of time (typically a year). When they expire, a renter’s tenancy automatically becomes month to month. But many fixed-term leases feature “vacate” clauses, requiring tenants to move out when the lease expires, unless they sign a brand new fixed-term agreement, which gives landlords the opportunity to jack up rent beyond the RTA limit. If tenants refuse, the landlord simply finds new tenants, at whatever rent they want. Unlike evictions, which require two months’ notice, the lease expiry date is legally considered sufficient notice for tenants to move on. Since there is such a low vacancy rate in Vancouver (it was characterized as a crisis last year), landlords are able to effectively employ this approach.

Selina Robinson, B.C.’s housing minister, is exploring lessening the annual rent hikes landlords are allowed to apply to tenants in the province.  She’s worried about rental affordability, something her party campaigned upon in the May provincial election. The NDP promised to build 114,000 rental and co-op homes, and give renters an annual rental home credit of $400. The City of Vancouver estimates that it will need 55,000 new rental suites in the next decade.

Robinson said legislation to fix that loophole is coming this fall. Landlord B.C., the association representing landlords in the province said it’s supportive of Robinson closing the fixed term lease loophole, but that lowering the maximum rent increase rate will simply be another disincentive to property developers considering building rental buildings, who may then decide to build condos instead.

“We’re obviously not insensitive about the current dilemma of the housing and rental housing crisis, but the frustrating part is we’ve been talking about the need for supply for 20-25 years and nobody listened to us. And we were predicting the challenges we’re seeing today. And this would be the wrong time to target that specific item.” – Dave Hutniak, Landlord B.C.

Liberal critic Sam Sullivan said he’s concerned to hear Robinson might be changing the maximum rent rate because the NDP did not campaign upon such a promise in the election.

“It’s a very popular short-term thing to do. But the long-term result can often be quite negative.”

The real issue in Vancouver, and why this is all such a big deal, is supply. There simply isn’t enough. Even high rents are generally cheaper than mortgages. As well, rentals end up being 100-per-cent used for housing local residents, a distinct advantage in a region where many are irate about the high level of investor-owned vacant condos.

Metro Vancouver housing planners estimate that, of the 18,500 new households that arrive in the region every year, about 6,500 need rentals. About 1,500 can afford high-end rents, the other 5,000 can’t. And only about 1,000 units a year are being built, almost all at the high end.

Report Reveals Renting From Small Landlords Is Cheaper

Big news from the Canada Mortgage and Housing Corporation! They released their Housing Market Insight report at the beginning of the month. Individual investors and private corporations own about 90 per cent of Canada’s purpose-built rental apartment units and most markets with a higher concentration of individual investors have lower average rents. In other words….Units owned by individual investors tend to have lower rents than units owned by other ownership types. This is most pronounced in smaller markets in Canada.

Individual Investors are defined as: all non-incorporated owners of rental housing stock, mainly comprised of individual investors and small joint ventures, representing 49.3% of the market.

Individual Investors are well-represented across all 35 metropolitan centres that were assessed as part of the report. The average rent associated with the units they own tends to be lower than the rent associated with other ownership types in most centres, including Montréal. However, the difference is generally smallest in centres with high overall rents, including Vancouver, Edmonton, Toronto and Halifax.

This isn’t really a surprise here. Smaller, private, non corporate landlords are better. It’s simple to see why.

They have a lot more to lose and generally rely on rental income as supplemental for retirement or for their daily lives. These kinds of landlords are exactly who we’ve created Renting Well for. Small landlords are like small businesses. Generally speaking, they have an interest in keeping tenants happy, ensuring that their units are in good shape, and have an inclination towards a more personalized approach. They have a tendency to be easier to contact and more often than not, they have a vested interest in avoiding turnover. Keeping tenants is cheaper than getting new ones. Even across the pond, english tenants were surveyed about satisfaction levels with their tenancies as part of the English Housing Survey 2015/2016. Tenants in the private rental sector were more satisfied with their accommodation than those in the social rented sector.

“Illegal” Rent Deposits Illustrate The Frustration of Landlords in Quebec

Apparently, it’s true, as per the CBC. About a third of landlords in Quebec have requested an illegal deposit, according to a recent survey by the landlord association CORPIQ. Landlords claims the reason they do this is because there is no way to guarantee that rent gets paid or that apartments are left in good condition upon move out. As a result, the organization is formally requesting a change in law with the provincial government.

This initiative is fuelled by a survey of CORPIQ’s members back roughly 2 years ago.

In 2015, the majority of rental property owners have faced the repercussions of more than three weeks of unpaid rent from at least one tenant, according to data obtained by CORPIQ through a survey recently conducted with its members.

According to this survey – 59% of landlords were in a similar position at least once in 2015. The figures show that the occurrence of non-payment of rent is on the rise; since a similar survey conducted five years ago revealed that 48% of landlords at the time have experienced the same problem at least once during the year. Keep in mind, this is in a province that is almost as notorious as Ontario in giving tenants who don’t pay their rent the ability to live rent free for quite a while.

Not everyone thinks this is a great idea, though. The Montreal Gazette’s Claire Abraham penned a piece last year that outlined her opposition to it. According to her piece, security deposits are allowed in most other Canadian provinces. Abuse is common: tenants who have paid their rent each month and left their apartment in good condition often see their deposits unjustly amputated or aren’t able to get them back at all. A new security deposit would put huge additional pressure on the Régie du logement, Quebec’s rental board, which is already unable to hear cases within a reasonable amount of time (many types of cases have an average waiting time of about two years). Yikes. That sounds like there’s a problem.

The average rent for a two-bedroom apartment in the Montreal metro area is $760. The Toronto average is $1,288. In Vancouver, it’s $1,368. There are only a small number of Canadian cities have cheaper rent than Montreal (the province’s biggest city and the second biggest municipality in Canada)– and then only much smaller, sleepier communities such as Saint John and Trois-Rivières.

Landlords Have Legitimate Issues with Canada’s Half Baked Legislation

The Federal government didn’t bother to get into specifics on upcoming marijuana legislation.

The tabled cannabis law proposes allowing Canadians to grow 4 plants per person at home – whether they own or rent, provided the plants aren’t taller than 100 centimetres. It sounds benign when it’s framed as a new and progressive law – which in many ways it is – however the practical implications of the legislation are something that a growing number of national and provincial landlord groups aren’t happy with in the least. The government has not said if landlords will be able to prohibit tenants from growing pot in their apartments.

The Professional Property Managers Association and  The Canadian Federation of Apartment Associations are both looking to compel the government to change this aspect of the law. They both seek a ban on tenants growing plants in rented homes or multi-unit buildings. Full disclosure: we also support this change in the law as it is rooted in common sense. We touched on some of the complicated aspects of growing marijuana in a rented unit – particularly the insurance nightmare it has the capacity to create.

“I think the government is obviously balancing a lot of issues here. They do want to break the black market, and that’s important. But we think we can break the black market if they let people [only] grow it in their own owner-occupied homes, and the product is readily available in stores or by mail order.” -John Dickie, Canadian Federation of Apartment Associations

Optimal conditions for growing marijuana include warm temperatures, extensive lighting and high humidity. In order to grow weed, you need these three things. Creating the hydroponic conditions in a residence in an effort to achieve this key trifecta is not something you can do without affecting the domicile in some capacity. That’s just a fact. Water that is fed to plants will transpire and evaporate from the containers into the surrounding air. Cannabis plants also require warmth. Excess water vapour and high temperatures can create humidity damage. Large mold accumulations can follow and grow fast in humid environments and can lead to structural decay.

To boot, unusually high amounts of steam coming from vents in winter can damage exterior finishes on houses. The smell of weed seeps into drywall the same way tobacco smoke does, and even when it’s not being smoked, marijuana can create a permanent odour that can be repulsive to people – like other tenants and incoming ones in the future.

The electricity required for lighting in even a small cultivation of weed is high. It also introduces a fire concern with having that much botanical lighting in a house – and that’s assuming that a tenant doesn’t re-wire the electrical in a home (which they can’t do). Most wall outlets are on a 15-amp, 120 volt circuit. Many outlets are generally on that one circuit. One 1,000 watt metal halide or high pressure sodium light draws 9 amps at 120 volts. So just by using one of those plugged into a wall outlet, you have already significantly maxed your circuit – and that’s not taking into account the other devices, computers, or appliances that are also typically in a unit. Maxing a circuit is not a good thing. Your circuit breaker (if it’s working properly) may shut down your circuit because you’ve overloaded it. Your wiring may heat up, flame up, short out or otherwise fail. Lastly, there is an increased fire hazard danger due to people drying marijuana in a household stove.

Even four plants in a building can change the risk assessment on a property, and creates a greater likelihood of water damage, mould, fire, vandalism and burglary. Under most basic home insurance policies, marijuana-related damages or anything that companies believe is “high risk” is not covered. That view is shared by many insurance companies, according to the Insurance Bureau of Canada.

“Landlords currently have little recourse available if a tenant is growing medical marijuana and aren’t required to be told if it’s happening” -Avrom Charach, The Professional Property Managers Association

Under new federal rules introduced last August, landlords are left a little high and dry (no pun intended) if a tenant is growing licensed medical marijuana. They don’t even have the right to know it’s happening. None of that is right. The federal government should formally include a clause in the Cannabis Act including restrictions on any and all rented dwellings or they should at least mandate that provincial legislation needs to compensate for the loophole this creates.