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.

5 comments:

Anonymous said...

Notice of Entry

There is a reason why so many legal notices still have to be delivered to a person or to a physical address - not everyone has access to a phone or the internet - or consistent access. I use the cheapest internet and sometimes it's down, my free outlook email takes forever to load, and I only have one computer right now so if it's down, I can't check my email (I don't have a smart phone because that's expensive).

You've mentioned landlords that live far away from their properties - mine does, but he has a superintendent on site - for SMALL landlords that live far away, an exception should be made, but a good idea would be to combine email with a text and/or voice call. My 30 dollar a month dumbphone plan includes unlimited texting and I usually communicate with my landlord by text. I also get to send pictures but my landlord gets charged for that so I email him pictures.

As more people are renting for longer period of times, often as single professionals with no housewife to stay and guard the home, and they are not college kids who kept most of their stuff at parent's house - 24 hour notice is not sufficient to give landlord and representatives access to our private home and possessions - it's best that the tenant is there to protect their property and the landlord against misunderstanding . On the other side, the industry wide notice of "9am to 5pm" for yearly fire and unit inspection is actually not supposed to happen, the way the rules are, it's supposed to be a narrower window of a few hours, but that's not realstic either.

A lone fire guy came back a full two hours after they came to my unit this year because to replace the speaker on my fire alarm. It makes more sense to allow for the full 8am to 8pm - because due to traffic, once someone took the time for the work, it might as well be an entire day - and rental corporations should be required to give enough notice for someone to take time off work for an inspection - which should be no more than once a year unless someone had been flagged as a hoarder or from a high risk Street to Home program.

The rules for entries need to address the realistic concerns of both tenants and landlords - for me, it's being able to be in my unit when the landlord is here, and for my landlord, it's being able to access my unit when he has time and when the weather permits his work in the case of my balcony. The 8am to 8pm weekday restriction for entry work against both of our interests! It's just lazy legislation. The focus should be letting the tenant find time to be at home and letting the landlord get work done at the same time and not a static time period.

My landlord needed to repaint my balcony last year during the month when there was rain every other day, we kept an eye on the weather and I used texting to confirm if he was coming in that day or not. There needs to be more flexibility in regards to entry, instead, there are bad landlords that don't care that their tenant won't be able to get time off work within 24hr and feels their privacy violated and there are bad tenants who could have made my landlord's balcony work difficult just because (you can't give notice for 'coming in some time this week when it doesn't rain').

So far, because I have a good relationship with my landlord, we've been able to work around some LTA shortfalls, I'm frequently ill so I'm in bed at odd hours, with the exception of the annual inspection which he gave 48 + hours for, he has promised not to come in if I don't answer my door, he doesn't bring the key up, and in return if I'm home and awake I just let him in to fix stuff on his schedule even if it's a holiday and/or he just dropped by. This spares his old superintendent the need to walk up several flights of stairs to slip a paper under my door.

- Lily

Al Dharsee said...

Excellent proposals to fix the system. I would add that AGI orders have to be issued within two weeks of the Hearing. Currently they take 30 to 50 days to issue these Decisions, even where the parties settle at the Hearing.

Anonymous said...

1. Condo Rent & Utility:
a) I think the rent for condos should automatically rise with the common expenses! Tenants should have the right to receive notices from the corporation, and maybe vote as a proxy for the owner on some matters since they actually live there.
b) Utility: It might be better to ban including utility as a par to of rent without special application and move to separate rent and utility - because it just cause so much conflict and the landlord and tenant board is crowded as it is. The tricky thing would be when heat isn't included and the lack of heat will be damaging to the building. But if utility is included it will make sense to tied rent increase (and decrease) to utility rate because the landlord have no control over increase and you can't get blood from a stone.

2. Eviction: I think there should be a process to determine when a tenant is simply UNWILLING to pay rent, when their income affords them to pay rent and they have no expenses that could justify missing rent, in such a case, they should be speedily evicted. (e.g. the tenant who orders pizza take out several times a week and have new furniture all the time, but no money for rent?)

We also need a speedier access to the tenancy board, we need more courts and boards to deal with our population increase, and in the mean time, cut out those who tied up court time - bar professional rent thieves from applying - you cry wolf - you won't be believed in the same city ever again.

3. LTB and Small Cliams: Agreed, all issues should be heard at LTB, even after the end of the tenancy. Right now... tenants who file tend to prefer the LTB over Small Claims because they don't pay to file right? I think big rental corporations earning over x amount of profit should have to pay more to file, but it should be much cheaper or even free for individual small landlords. If we want more small landlords we need to decrease their burden. There should really be a government bail out for small landlords facing bankrupcy brought by bad tenants - a majority of tenants are good so the government would pay less to save a few small landlords then to pay for homeless shelters because more landlords are too scared to chance it.
- If there are Unintended Consequences from charging big landlords more to file in order to subsidize small landlords...I don't know. Sorry, I'm not a lawyer or an economist, it's just an idea I got from how dentists operates.

- Lily

Anonymous said...

Standard Lease 9, and Owner take back 10
9. I know most of the terms on the lease I signed isn't binding, but I like them and I find relief in knowing that other people might not not they aren't binding so I could have peace from pets and Air BnB. Landlords SHOULD have the right to restrict occupants and guests, if they a) live on the same property, or b) receive complaint from neighbours. My building only have two washers and two dryers, I shudder to think what will happen when my landlord can't include no guests or no occupants in his lease anymore as a deterrent. More people also mean more time waiting for the elevators in high rises, and for all buildings - more people potentially crowding the staircases in a fire, e.g. Grenfell Towers in London. When landlords don't have the right to restrict number of occupants, that just mean that a single person like me might be stuck paying for the same rent as a family of nine - even though I use less resources, and I have less resources because I don't have a second or third or fourth income and I don't receive child benefits.

10. Rental corporations should not have a right to take back units in a purpose built rental for owners own use, but at very opposite end, individual small landlords should absolutely be able to take back a house or a condo unit that was (sentimental value), is (they are in a temporary housing situaiton elsewhere) or will be, a family home - the exception should be made for small landlords and to reduce grief and confusion, it should be a fixed term tenancy from the very beginning. I think there should be separate acts for rental corporates running a business to provide homes versus someone renting out their personal property for extra money, right now the second group often gets unpleasantly surprised that they are encumbered by the RTA and there is grief on all sides, it's like opening a lemonade stand at the end of your driveway and getting harassed by the health department and Revenue Canada. A lot of people depends on security of tenure when they rent, but not all. Let the college kids who still have most of their stuff at their parent's house rent from small landlords and leave the apartment buildings for the renters who depend on our units as our primary home!

That one month compensation was probably brought in because the government refuses to pay welfare recipient enough money to move now! Or enough money to pay market rent, so they are downloading the cost onto the landlord, which decrease the supply of landlords, which worsen the problem.

- Lily

Elaine Page said...

Nail meet Head! Thanks for hitting it!