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.

California’s State Government Is Helping To Pay Off Unpaid Rent

On January 28th, California lawmakers agreed to use $2.6 billion in federal stimulus money to pay off up to 80% of some tenants’ unpaid rent — on the condition that landlords forgive the rest of it. California is currently the only state that is using federal stimulus money to help tenants.

The legislation, which Gov. Gavin Newsom will likely sign into law, is the state’s strategy to deal with millions of people unable to pay their rent because of government-ordered business closures. No one is sure how much unpaid rent is outstanding. Estimates range from a high of $3.6 billion to a low of $400 million. Last year, Newsom signed a law that banned tenants from being evicted for not paying their rent during the coronavirus, but only if they paid at least 25% of what they owed after Sept. 1.

“COVID-19 continues to devastate communities across our state and too many Californians remain one paycheck away from losing their apartments or homes. These families need protection and relief now,” -Gavin Newsom.

The federal money includes $1.5 billion sent to the state, and another $1.1 billion sent to some cities and counties.

The money could also be used to pay for unpaid utility bills. A survey by the State Water Resources Control Board found 1.6 residential water customers, or 12% of all households, have unpaid bills amounting to $1 billion.

Those eligible for the rental assistance must qualify as low-income residents based on a formula involving area median income, have financial hardships such as unemployment and demonstrate a “risk of homelessness or housing instability,” according to the legislation.

 

 

Is Los Angeles Treating Landlords Fairly?

Los Angeles institutes a tenant favored program to stop all evictions for nonpayment of rent during Coronavirus. But, does it make sense?

In a city where more than 60 percent of households rent, city lawmakers passed a law designed to help renters – namely two local emergency measures to thwart evictions.  While it doesn’t absolve renters from paying their rent, it does allow them to defer their rent for up to 12 months. You read that right – 12 months after May 15th – when the mayor’s emergency measure expires. In a city where the average rent is over $2500 a month, that’s a tall order for landlords to take on.

The ordinance also halts evictions of renters who have “unauthorized occupants,” such as family members or pets, living with them because of COVID-19. (It covers tenants facing eviction for “nuisance” reasons, like a loud child who’s in the apartment more now that schools are closed.)

There are also protections against two more types of evictions, in addition to nonpayment of rent, including:

  • Cases where tenants who have contracted COVID-19 are being evicted for reasons that are not their fault. “No-fault” evictions include instances where a landlord might want to tear down the building or take the unit for a family member.
  • Evictions under the California Ellis Act, which owners of rent-controlled buildings invoke when they want to demolish their buildings or remove them from the rental market, have also been halted now and are not allowed to resume until two months after the end of the “local emergency period” we’re in now because of the COVID-19 pandemic.

Under the city’s anti-eviction rules, residents just have to notify their landlord within seven days after the rent is due that they’re unable to pay because of economic or health circumstances caused by the virus. The city does not require tenants to provide their landlord with documentation proving they have been impacted by COVID-19. So in other words, all you have to do is claim you’ve been affected by Covid 19 and you can get up to a year deferral on your rent – interest free. On the other side of this, landlords are required to act like banks, and continue paying their mortgages, property taxes, utilities, and any other expenses related to operation.

As per Curbed LA, The California Rental Housing Association, which represents more than 22,000 landlords who lease out more than a half-million units, and the Apartment Association of Greater Los Angeles, are advocating for a relief program where the state would cover the cost of at least some of the rent and pay it directly to landlords.

“Many landlords are so small, they’re mom-and-pops. They depend on that rent to supplement their retirement incomes and put food on their tables,” says Daniel Yukelson, executive director of the Los Angeles apartment association. “They’re going to be in severe financial peril today.”

What makes this even tougher and more confusing for landlords is the overlapping and dizzying federal, state, and local tenant protections that have emerged in the last few weeks.

As part of the federal stimulus package approved last month, there is a nationwide eviction moratorium for nonpayment of rent, but only for renters whose landlords have mortgages backed by the federal government — something most tenants don’t know and would have a difficult time figuring out. Gov. Gavin Newsom has agreed to delay eviction proceedings for renters affected by the virus, but only through May. And dozens of mayors and city councils across the state have come up with their own rules like the ones enacted in L.A.

Landlords are struggling to understand which rules they have to follow, said Daniel Yukelson, executive director of the Apartment Assn. of Greater Los Angeles. At the same time, many are also navigating a similarly haphazard patchwork of government protections for late mortgage payments.

“It’s really unfair what’s being done,” Yukelson said. “We did not go in the business to be lenders to tenants. And that’s what we’re being asked to do.”

Who’s looking out for landlords in Los Angeles? While the adaptive laws to help tenants make sense, why isn’t the city balancing out the remedy with a program to help property owners? That’s a question that Mayor Eric Garcetti is ultimately going to have to answer.

Cincinnati Might Ditch Tenant Security Deposits

Two thirds of the population of the city are renters

Cincinnati may do away with security deposits under a proposed bill and replace it with a requirement that landlords accept a security deposit insurance policy instead. The proposal could make Cincinnati the nation’s first locale to mandate a new option for renters to pay security deposits. Landlords and property owners aren’t fond of the proposed measure, but city officials believe the traditional security deposit format is in need of a serious revisiting. A security deposit in Cincinnati is typically the equivalent of single month’s rent. Lawmakers are citing what is a growing affordable housing crisis in the United States and maintain that the necessity to supply that a security deposit is a heavy burden to place on tenants.

The monthly rent for a typical one-bedroom apartment in Cincinnati was $850 in 2017. Two years later it’s risen to $1,300, with a 2-bedroom costing about $1,600 a month.

“This would keep money in the pockets of middle- and working-class Americans to be able to provide for their families,”  – Cincinnati Mayor John Cranley

With security-deposit insurance, a tenant signs a policy with an insurer and pays a monthly premium. The policy guarantees an amount of money would be given to the landlord if there’s damage to an apartment. The premiums cost less than the average security deposit in the city, with the only drawback being that renters don’t receive the money back, with interest, after they leave an apartment.

Although the measure has garnered support from Cincinnati Mayor John Cranley, fellow council members and property owners are skeptical about the proposal. According to Inman, some landlords at the first recent public hearing on the law indicated that the plan could possibly remove the incentive to take care of the property. Another point tabled was that tenants’ credit could also be at risk if they fall behind on insurance payments. There were also questions about what would occur if a claim was denied by an insurance company.

A second hearing has been scheduled for December 31. Are you a property manager or landlord in Cincinnati?  What do you think of this new law?

London Mulls Making Landlords Pay For Parties

The city is known for epic illegal student street parties – also known as FOCO – or “fake homecoming”.

London, Ontario is a party town, evidently. In a classic case of municipal policy clashing with provincial, this month, London city staff suggested to increase the maximum fines for nuisance parties to $25,000. This was in response to an insane illegal street party that flooded a street near Western University with 20,000 revellers in September. That event completely overwhelmed police, sent 57 people to hospital and prompted warnings from law enforcement that future street parties could easily cost a life.

As per the CBC, social media videos that showed students “brewfing” — literally drinking beer while climbing onto roofs and even jumping off them. Emergency services couldn’t access the street that this was occurring on.

Fines are going up, but more importantly, the municipality also proposed amendments to the public nuisance bylaw that would allow the city to pursue tenants — and landlords — to recover costs from cleanup and damage.

“Where an absentee landlord … takes no action to prevent, end, or clean up after a nuisance party, they may be subject to invoicing,”

This is almost as crazy as the parties themselves, at least according to Joseph Hoffer. He’s a lawyer representing more than 600 members that make up the London Property Management Association. His position is that landlords are prohibited from controlling the conduct of their tenants under the province’s Residential Tenancies Act. Some of the more interesting suggestions that city staff have made is for landlords to hire private security, something Hoffer is adamant is illegal.

“The effect of the bylaw is to compel landlords to do something illegal, and that’s repugnant. There seems to be an assumption built into the bylaw amendment that landlords can control the actions of their tenants, and that assumption is fundamentally flawed.”

The committee voted to ask staff to review the bylaw — taking into consideration the legal concerns raised by Hoffer — and report back on May 28. What do you think?

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, Δ9tetrahydrocannabinol (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.