Friday, June 8, 2018

Premier-Designate Ford...Here's a Fix for the Rental Housing Availability Crisis

Whatever your politics, it is a fact that Doug Ford and the Progressive Conservatives will soon form the government in Ontario.  And whatever your perspective, we have an affordability and availability crisis in the rental housing sphere, particularly in urban areas.  Some blame it on speculation, some on foreign buyers, but those of us in the trenches know that there is another, much bigger factor at play...fear of being a landlord in Ontario.

There are perhaps a hundred thousand rental units that could be opened up if Ontario's new government took away some of the risk of landlording, and brought some balance back to the private sector secondary market.  Here's my top 10 wish-list for our new Premier, knowing that there are political forces at work and stakeholders from both sides of the spectrum.

  1.  On the issue of rent, the government should re-consider the elimination of the s.6 rent guideline exemption, particularly in condominiums where owners have little control over costs and most condo investors are currently cash-flow negative and will become more so over time.

    One method that would allow developers and owners to eliminate some risk without allowing rent gouging to occur, would be to implement a rent increase system using a sliding scale exemption.  For instance, a system could be implemented for new construction such as year 1 post-construction, Guideline + 10%, year 2, Guideline + 8%, year 3, Guideline + 6%, year 4, Guideline + 4%, and finally in year 5, Guideline + 2%, becoming the provincial guideline thereafter.

    A no-brainer would be to bring back the above guideline rent increase application for extraordinary increases in utility costs, removed by Premier Wynne in the 2017 Rental Fairness Act.  Where landlords charge all-in with utilities, they shouldn't be punished by rising hydro costs that are beyond their control. 

    Finally the government should fix the problem caused by Price v. Turnbull's Grove from 2006 at the Ontario Court of Appeal. Governments never intended sections 136 and 116(4) of the Act to operate in this conflicting manner, rendering hundreds of thousands of rents illegal.

  2. The LTB's eviction process needs fixing.  Streamline the LTB process to have matters resolved more quickly, ensuring that rent is paid into the Board by the tenant if disputes are protracted.  Rent evictions and landlord breaches should be de-coupled.  The current system allows tenants to slow the system down, and even avoid eviction with complaints, real or imagined, when the issue is the tenant not paying rent.

    Right now it takes between 3 and 6 months (sometimes more) for a simple rent eviction to get through the system.  This is unfair.  Landlords have mortgages and other obligations.  More adjudicators should be hired, the 14 day period after issuing an N4 should be changed to 5 days, and a hearing should occur within 2 weeks of the tenant failing to correct the breach and the application is filed.  If evictions are ordered, they should be carried out by private bailiffs, not by the provincial Sheriff which operates slowly under Ministry constraints.

    Finally the system of "N" notices for conduct should be revamped.  For non-voidable conduct notices (the N6, N7 and N8) there should be simply an application to evict, bypassing the notice of termination entirely as it serves no purpose.  For the N5 notice, the current implementation that doesn't permit a landlord to amend their claim once the notice has been served should be revamped, allowing N5 amendments for new conduct that takes place prior to the hearing, provided those amendments are properly served.

  3. Jurisdictional issues between the LTB and Small Claims Court waste time, cost money and create both confusion and frustration.  Landlords often have no remedy with respect to utilities and post-occupation damage and rent claims filed either at the LTB or at Small Claims Court.  Let ALL matters where the substance of the dispute is a residential tenancy matter be resolved at the LTB, and avoid this confusing bifurcation.

    Amend the RTA provisions regarding “damage” to make it clear that the LTB is the forum for legal, monetary damages, not just physical damage, arising in the rental complex.  That will go a long way in resolving the LTB vs Small Claims Court confusion.

  4. Allow service of notices of entry (not termination notices) by email if the parties agree in the lease that communication may be by email and if they have provided their respective email addresses in the lease.

  5. Lease term has become meaningless.  Jurisprudence since the Act came into force has confirmed that lease-breaking conduct are legal, negating the purpose of lease term as a benefit to the landlord.  This needs fixing.  A notice to terminate that can be remedied (rent N4’s for instance) should not end the obligation to pay future rent if lease term remains (subject to mitigation efforts by the landlord), thereby ending any statutory or common law obligations related to term.

  6. While theoretically tenants with a non-smoking lease can be evicted for smoking, the legislation should be more definitive.  This is especially important with the impending legalization of marijuana.  In addition, Ontario should specifically ban the proposed “4 plant” rule from all rentals.  This needs quick action.

  7. While I love my dog Yuki, the RTA should be amended to allow no-pet leases to be permitted, and evictions allowed if the tenant violates the agreement.  Pets may and can cause considerable damage to rentals.

  8. The Ontario Human Rights Commission Policy Guideline on Rental Housing needs amending.  A small landlord should not be the tenant's keeper and social worker. Also pre-tenancy, landlords should not have to take risks that are unreasonable following the policy guideline's absurd edicts that suggests it might be discriminatory to refuse to rent to someone with no credit, no employment, or very low income.

  9. We need a complete re-write of the terrible standard government lease that came into force on April 30th, 2018.  The concept and reasoning behind it was fair, but it is so badly drafted and rolled out that it will do nothing but cause more confusion and litigation.  Take a look at my recent blog entry on the government lease. New Government Lease is So Bad....

  10. Landlords should be able to get their homes back when they no longer wish to rent it out, or when they wish to sell it to a purchaser who wishes to move in.  Theoretically there is now a process allowing that, but it's broken.  The newly elected Conservative government should remove the recently added one month compensation requirement, and rescind the new rule that prohibits a corporate landlord, even in a single shareholder corporation where the shareholder is acting as the landlord, to get their home back.

    We need to de-couple relief from eviction from these types of no-fault applications.  If a landlord decides to get out of the rental business, then nothing should stand in the way of them getting their house or condominium back.

Mr. Premier Designate, I would be pleased to sit down with you and your future Minister of Housing to discuss these issues.  If we can mitigate the risk for small investor landlords, there will be housing for everyone.

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