Toronto Star – “Join a group such as the Ontario Landlords Association where after becoming a member, you can do a credit check for as low as $10, and use their supporting materials to assist you.”
Getting the Message Out to Small Landlords Across Ontario! Be Aware The Law Is Changing For Above Guideline Rent Increase Applications in 2018
Successful Ontario landlords know it’s important to always be aware of new laws that regulate our industry. If you are not careful and don’t know the latest changes you could face some severe financial penalties. Those of who have been unfortunate enough to go to the Landlord and Tenant Board know you must be 100% ‘on your game’ and become an expert on the rules and regulations if you are going to succeed.
And there have been many changes since the beginning of 2017.
One of the biggest changes that has impacted small landlords is the change in how we can use “own use” applications to get our properties back. We wrote about these Ontario landlord changes earlier to let everyone know about what is going on so you can prepare and be aware.
Other changes have included the fact landlords with properties built after 1991 are now included under the government rent control umbrella and changes to above guideline rent increases.
An Ottawa landlord wrote on our Members forum in what turned out to be huge thread:
“I have kept my rent increases low over the past few years, sometimes not even raising the rent in order to keep my tenants from looking at other properties and potentially moving. I pay for power and now my bills are becoming so high it’s jeopardizing my ability to even cover my costs! Has anyone ever done an above the guideline increase? Thanks in advance.”
Unfortunately it’s not good news for this landlord as the news about changes didn’t reach her.
New Laws For Above Guideline Rent Increase for Ontario Landlords
Everyone who owns rentals across Ontario please carefully read this message from the Ministry to us, as they know we can reach landlords all over the province:
To: Ontario Landlords Association
Above Guideline Rent Increase Application – The Law Is Changing
On January 1, 2018, two changes to the Residential Tenancies Act that relate to the landlord’s Application For a Rent Increase above the Guideline will come into effect
1. A landlord will no longer be able to apply for a rent increase above the guideline because of utility costs (e.g. fuel, electricity or water) have increased.
2. If a landlord has not complied with an order to fix an elevator (issued by the LTB, the municipality or the technical standards and safety authority) the LTB can dismiss the application or require the landlord to fix the elevators before ordering an above the guideline increase.
A landlord can still apply to the LTB for an increase above the guideline if:
The landlord’s costs for municipal taxes and charges have increased significantly The landlord has done major repairs or renovations (these are called capital expenditures)
or, The landlord has operation costs for security services performed by person who are not employees of the landlord.
Changes to the Landlord and Tenant Board Form L5
The Landlord and Tenant Board has updated the L5: Application for an Above Guideline Rent Increase to reflect the changes.
Landlords need to begin using this new form immediately. Make sure you are getting the latest version of the form by clearing your browser cache to avoid any mistakes. The old version of this forum will be accepted until January 30, 2018.
Getting the Message Out to Ontario Landlords
Small Ontario landlords have faced unfair rules that are biased for bad tenants for years. Now there are even more changes coming that are unfair for Ontario landlords. However, you must follow the rules and be aware of them.
The Ontario Landlords Association is reaching landlords all over the province and helping them be aware of new rules and changes to the way small landlords can run their rental business.
There have been important changes to how the L5 works starting today. We will provide updates on this and how other new changes are impacting our landlord community throughout the years.
Knowledge is power and Ontario Landlords need to be aware of these rule changes in order to succeed.
Our Province Wide Landlord Community Believes the Rent Increase is Too Low and We Need A Better Way to Calculate the Rent Increase Guideline To Help Small Landlords Cover Costs
Every year the Ministry of Housing publishes the Rent Increase Guideline.
Ontario has ‘rent control’ and this guideline informs residential landlords how much they can raise the rent in a given year.
The Ministry comes up with this annual guideline by looking at the Consumer Price Index. This index shows the level of inflation based on prices of such things as groceries and the cost of buying clothes.
How Much Can Ontario Landlords Raise the Rent in 2018?
Based on the Consumer Price Index the Ministry of Housing announced Ontario landlords can raise the rent by a maximum of 1.8% in 2018.
This maximum cap applies if you are going to raise the rent from January 1, 2018 to December 31, 2018.
How Does The Compare To Previous Years?
What If You Need To Raise The Rent At a Higher Rate To Cover Costs?
To do this you will have to go through the Landlord and Tenant Board process.
Many OLA members in the Ontario Landlords Association forum have shared their experiences regarding this process.
While some have succeeded, the consensus is that it is a complicated process and policies don’t have a true understanding of the real life financial challenges small residential landlords face.
What If You Face Higher Utility Costs?
Furthermore, with new rules for Ontario landlords coming this year you cannot apply to raise rents beyond the guideline for skyrocketing utility costs. This is one of the reasons more and more small landlords are not renting out inclusive of utilities.
Aren’t Newer Properties Exempt from Rent Control?
A lot of recent rental stock in Ontario has been created by small landlords investing in newer property such as condos. A common question these days in the Ontario Landlords Association forums is about rent control for new rental properties.
For example an Ottawa landlord wrote: “My rental property was built after 1991. Does this mean I don’t have to follow the government rent increase guideline or not?”
In years past, you were exempted but not anymore.
Previously rent control only covered rental properties that were built prior to November, 1991. This exemption was a strategic decision made to encourage the creation of new rental buildings in the Ontario.
Things have changed this year with the Rental Fairness Act 2017. These new rules mean rent control has been extended to cover rental properties that were built prior to November, 1991.
The Guideline of 1.8% Is Too Low For Me To Keep Up With My Rising Costs
This is a common statement by OLA members.
The Ontario Landlords Association has lobbied for change in how the annual rent increase guideline is calculated. The guideline needs to put far greater weight on the price increases of good and services that impact small landlords.
After all, it costs money for good landlords to run safe, well-maintained rental properties.
Some OLA members suggest a good solution would be for the Ontario guideline to copy what BC landlords have. In British Columbia the guideline is the rate of inflation based on the consumer price index plus 2% (to account for the extra types of costs landlords have).
Landlords Can Raise The Rent 1.8% in 2018
With the importance of owning safe, well-maintained properties and costs rising it’s important for landlords to raise rents annually. We are faced with a very low cap on how much we can raise rents which creates even greater challenges for landlords.
It’s time for the the rent increase guideline to be changed to meet the real needs of residential landlords and to help us improve the quality of the rental stock in Ontario.
It’s time to stop bashing landlords and start working with us to help improve the entire rental industry. This will benefit both good landlords and good tenants.
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 firstname.lastname@example.org.
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.
Great Tenants Want to Rent Attractive Properties. Here’s A Way To Get Tenants To Want to Rent Your Rental Property!
Ontario landlords know the importance of renting to good tenants.
This means landlords need to screen applicants carefully before handing over the keys to their rental unit.
Experienced Ontario landlords know careful tenant screening should also include an Ontario landlord credit check on all potential renters.
How Can I Find Good Tenants?
In order to rent to good tenants you need to be able to attract them to your property and they need to want to rent from you.
This means you need to have a well-maintained and high quality property.
How Can I Make My Rental Property More Attractive For Good Tenants?
A recent post at the Ontario Landlords Forum from a Toronto landlord asked how to improve curb appeal.
Here’s the post:
“I have a multiplex in Toronto that I put a lot of time and money into to make the inside very attractive. I’m in an area where this is a lot of competition for qualified tenants… The problem is the outside of the property isn’t appealing and it turns off a lot of good potential tenant from even wanting to view the inside of the rental. How can I improve the curb appeal of the property without spending a fortune?”
Improve Your Rental Property By Planting Trees and Shrubs
An Alberta landlord replied with the advice of planting trees and shrubs to improve curb appeal. This landlord said after adding some leafy shrubs and a few trees her rental property attracted a lot more applications from interested tenants.
A BC Landlord echoed the opinion and stated that the trees near his rental has attracted a lot of great tenants.
Fortunately, for landlords in Toronto and the GTA planting trees and shrubs is a terrific and affordable options thanks to a program called LEAF.
LEAF – Local Enhancement & Appreciation of Forests
LEAF is a non-profit organization that has been offering a subsidized tree planting program in York Region for the past 18 years.
LEAF offers a full-service planting program to help multi-units in Toronto and York Region plant trees and shrubs on the private property around buildings. This includes a consultation and site assessment with one of our expert arborists and full planting service.
Melissa Williams, Acting Program Manager for LEAF
The Ontario Landlords Association interviewed Melissa Williams for more information on the LEAF program.
We thank Melissa for her enthusiasm to help landlords know about the program and how it can help landlords create attractive rental properties.
1. Could you tell us how your program can help residential landlords?
LEAF offers a full-service planting program to help multi-units in Toronto and York Region plant trees and shrubs on the private property around buildings at affordable rates. This includes a consultation and site assessment with one of our expert arborists and full planting service. LEAF is a non-profit organization that receives funding to offer this subsidized program for private property plantings.
Trees and shrubs increase the aesthetic value of your property which in turn can increase property value by as much as 30%! Trees also reduce air and noise pollution, lower summer air temperatures and provide much-needed shade.
2. Are all landlords in Toronto and York Region eligible for this?
All residential landlords in Toronto and York Region are eligible for the program.
3. We have lots of members all over Ontario.
Can Mississauga landlords and Ottawa landlords access the program?
At present time we only offer the program in Toronto and York Region. We would recommend that landlords in other cities check with their local municipality or conservation authority to see if similar programs are offered in their area.
4. What happens during the consultation/assessment of the property?
During the consultation, a LEAF arborist will assess the site conditions such as soil type, sun exposure and spacing restrictions, and speak with you about what your preferences are in terms of trees and shrubs for the property.
The arborist will then recommend suitable native species that will do well on your property, and determine planting locations with you as well. We would then come back and plant the trees and shrubs for you in either our spring (April-June) or fall (September-November) planting season.
5. What are the costs involved for the landlord and what does this include?
The cost for the program ranges from $150-$220 per tree, depending on the species selected. This price includes a site consultation with an arborist, a 5-8 foot tall tree, and delivery and planting service.
The full value of this service is approximately $300-$400, and the difference is paid by our funding partners. Native shrubs can also be purchased for $25 each.
6. How can landlords interested in this opportunity get started?
We recommend visiting our website at www.yourleaf.org/multi-units-and-businesses to learn more about how the program works and to fill out our application form. We can also be reached by email at email@example.com
Make Your Toronto or York Region Rental Property Look Good!
Toronto and GTA landlords can take advantage of this program to make your rental property more attractive to renters.
Whether you are landlord in Toronto or cities in the GTA make your rental property sparkle and attract good tenants.