Archive for the ‘Landlord laws’ Category

Will There Be An End To The Rent Exemption That Removes Rent Control From Nearly All Rental Units Built After 1991?

Wednesday, March 22nd, 2017

OLA campaign 1

We Want To Hear From The Small Landlord Community. The Ontario Landlords Association Will Be Making a Submission to the Ministry Sharing Your Thoughts & Concerns on a Bill Which Could End the Exemption That Allows Rental Properties To Avoid Rent Control If The property Was Built After 1991

Real estate prices have appreciated greatly in Toronto and the GTA over the past several years. And it looks like property prices will continue rising in 2017.

With these rising property prices, many areas have also seen rising rents. This has led to politicians looking to make changes in how the residential landlord-tenant system works in Ontario.

Why are rents rising?

It’s because most of the new rentals on the market are due to the investments of hard working and risk taking small landlords and investors. These are often working people who invest in a “income property” as a nest egg to help their financial future.

With costs rising these small landlords need to charge rents that cover their costs of owning the property. With prices rising, they also have to spend more buy the property. As they are also small business people they have invested with the goal of attaining at least some sort of profit.

Who are these Ontario landlords?

Many of these investors/landlords are people like you reading here. They are people who have jobs and are working very hard to build for their retirement.

They save their money, and invest…taking a risk to provide high quality rental properties for tenants with the hopes of a fair and decent return.

These investors/landlords include teachers, fire-fighters, police officers, dentists, contractors, secretaries, nurses, truck drivers, small business owners, retirees, etc.  These are the people who make up the OLA community.

These investors and landlords are not rich corporations hoping to build their share price on the Toronto Stock Exchange.

What changes are being proposed?

An NDP member has put forward a private member’s bill that will end the rent control exemption for rental properties that were built after 1991. The NDP claims this exemption puts tenants at risk and is putting many people who rent in a difficult situation.

What is the 1991 exemption all about?

We have written about the 1991 rent exemption before. In fact, before the OLA began discussing this it was rarely mentioned in the media and few people even knew about it. As with so many aspects of the rental business in Ontario after the OLA began discussing the issue it became well-known and a “hot issue”.

Why is this such a hot issue now?

It’s because rents are increasing. A Global News report said the average rent for a Toronto condo is now over $2000/month. So many tenants are justifiably concerned about rent increases and being able to afford being able to stay in their rental property.

What Do OLA Members Say?

Our landlord community consists of landlords all over Ontario.  And we have owners of all types of rentals.  These range from condos to basement apartment rentals to duplexes and even larger buildings.

The issue of rent control has been a big issue for our community for years. When this latest development was announced landlords were quick to begin to share their thoughts and concerns.

Here are some of the thoughts and points of discussion in our busy member forum.

(1) This is a Business And I Need To Keep Up With Costs

Many landlords worry about being able to cover their costs. They aren’t out to “gouge” tenants (as successful landlords know how valuable good tenants are). If rents can’t be raised to cover costs it will lead to financial hardship, especially for small landlords.

Others stated that landlords take a risk when buying a property to rent out and our investments are important to the Ontario economy. As they are running a “business” they need some flexibility in how they operate.

An Ottawa landlord said investors like her  fund the construction industry and the building trades. We hire property managers and provide business to real estate agents.

We are also the people who are providing new rental accommodations. Changing the rules for rent control will impact jobs and the entire Ontario economy.

(2) I Bought My New Build Rental Property Because of the 1991 Exemption

Many new landlords who bought condos are shocked at the news that they may be covered by rent control.

One new condo investor wrote that if the exemption is stopped she will never ever trust this government again.

(3) My Rentals Aren’t in Downtown Toronto and If I Raise Rents Too High Tenants Will Just Move

Some landlords think the government is too focused on the situation in Toronto and not aware of how things work in the rest of Ontario where real vacancy rates are not that low. A Barrie landlord said while having the freedom to cover costs is important, if she raises rents too high her tenants will simply move.

(4) The 1991 Exemption Is Unfair To Landlords With Older Rental Properties Because The Rent Increase Guideline is Far Too Low

Many members of our Ontario landlord community own older homes. A Newmarket landlord said he buys older homes, invests his hard earned money to fix them, renovates them, makes them attractive, and then rents them out. He wonders why are these landlords punished with an extremely low annual rent increase guideline that is capped?

(5) Let’s Get Rid of Rent Control for All Rental Properties in Ontario Whatever the ‘Age’ of the Property

Some members of our community believe the real solution is to end rent control for all Ontario rental properties. This would lead to a lot more investment into rentals. This would give tenants more options and good landlords with great rental properties would be able to invest more with confidence.

Proposal To End the Rent Control Exemption on Properties Built After 1991

It seems so simple at first glance. The headlines are all about tenants who are being priced out of their rental property as rents rise.

In reality it’s more complicated.

The issue of rent control and rental properties requires serious research and the input of all stake-holders.

And small landlords are key stake-holders and our voices need be heard.

The Concerns From Tenant About Ridiculous Rent Increases Is a Serious Issue

Many of our members rented before and are concerned about the challenges tenants can face with a ridiculously high rent increase.  The problem is legislation covering both large corporate landlords and small landlords will hurt the ‘small players’ who take tenant concerns seriously.

For example one of our members wrote “Good tenants are the key to success as a landlord and investor.  I haven’t even raised rents on my good tenants for the past three years because I value them!”

Another landlord said: “Okay, make it fair for all rentals of all ages but make the annual rent increase more reasonable because now it’s far too low!”

Improving the Ontario Rental Industry to Benefit Landlords and Tenants

The stakes are high as any knee jerk media friendly policies could seriously impact the Ontario rental industry in a very negative way.  This will hurt both good landlords and good tenants.

Bad policy decisions based on media click-bait stories can lead to very bad results for landlords and for tenants. It’s important the government meets with all stake-holders before such an important policy decision is made.

We will make a submission to the province and want to hear your landlord and tenant concerns about rent control.  Contact us at landlordfairness@lobbyist.com.

We will make sure your voices are heard.

Any new policies regarding rent control need to be part of a much larger overhaul of the Residential Tenancies Act and the Landlord and Tenant Board. Let’s improve the Ontario rental industry for tenants and small landlords who have invested in properties.

What is the Ontario Residential Tenancies Act? (And Why You Need To Study It)

Tuesday, January 10th, 2012

January 10th, 2012

You decide to invest in residential rental properties in Ontario

With so much money at stake, you don’t take your investment lightly.   You’ve looked into a variety of potential investments and decided to invest in residential rental properties in Ontario.

Now it’s time to cover all the bases to make sure you start out right and have a plan for success.  You go through the categories, from finance to marketing.

Location, location, location

Being a careful and cautious investor, you spend months researching which area you want to buy in.  After all, you know the old real estate adage ‘location, location, location.’

Financing

You work with your mortgage broker or bank to find out out how much you can spend and to make sure you can pull the trigger once you find the ideal property.  You carefully work out all the numbers.  You are pre-approved and know what your budget is.

Buying the right property

You work with a reputable Realtor to find the ‘right’ property in your targeted area.  Now it’s on to carefully hiring contractors to make your rental property safe and attractive.

You feel you’ve done your due diligence and are on the right track

Carefull planning.  Research.  Hiring the right people and creating your team.  Patience.  A good business plan.  You are on your way.  Or so you think.

What do many Ontario landlords miss?

Many smart and professional Ontario landlords neglect one aspect of their business.  The law. Before entering any industry it’s important for you to learn the laws governing it.  Many landlords are not fully aware of the Ontario Residential Tenancies Act.

How difficult is it to simply rent out an apartment or my basement?

This isn’t Alberta.  This isn’t British Columbia.  This isn’t P.E.I. or Newfoundland.   The laws in Ontario are complicated. Very complicated.  Everything starts with the Ontario Residential Tenancies Act (RTA).  Tenants are very well-protected under the RTA.  This is especially so after the Ontario Liberal government’s amendment of the Act in in 2006.  When the amendments were proposed, there was a consultation process with various stake-holders.  Small scale landlords were not represented.

Don’t landlords have rights too?

Under the RTA, landlords have rights as well.  However, you have to see the thinking of the people who made the laws. Tenants are essentially viewed as ‘victims.’  After all, they cannot afford to buy their own homes, right?  Wait, you’re not buying it?  Here’s more.  Landlords are viewed as wealthy and powerful.  Landlords can afford to hire over-priced paralegals and lawyers.  Landlords can afford to wait 3-6 months to evict a non-paying tenant.  You get the picture. Remember, small scale landlords were not represented during consultations to change the RTA.

Wow!  Please tell me more about the Ontario Residential Tenancies Act.

The Residential Tenancies Act, 2006 covers most residential rental units in Ontario including mobile homes, care homes and rooming and boarding houses.

However, there are some situations where a rental unit may not be covered by the Act or certain parts of the Act.

For example, the Act does not apply if:

  • the tenant must share a kitchen or bathroom with the owner, or certain family members of the owner;
  • the unit is used on a seasonal or temporary basis.

Many of the rules about rent do not apply to:

  • new rental buildings;
  • non-profit and public housing;
  • university and college residences.

Note these units are still covered by most of the other rules in the Act, such as maintenance and the reasons for eviction.

Note the Act does not cover commercial tenancies.

Where can I learn more about the RTA?

You can read the RTA here.  Read it carefully.  Twice.  Daily.

Do you need to enter your unit? What can you do to get in?

Thursday, September 10th, 2009

NOTICE OF INTENT TO ENTER