Posts Tagged ‘being a landlord’

Being a Landlord is a Business

Wednesday, October 5th, 2011

by Margaret Therrien  October 5, 2011


I have been invited to write in this forum and am pleased to respond. First, I must state that I am not authorized to speak for, nor am I paid by any business, political party, organization or entity. My opinions are my own. For the purpose of clarity, the author considers a small landlord to be someone who owns and rents out one or more self contained residential units such as a house, a basement apartment, a duplex, or triplex but not larger than a four-plex. A small landlord may or may not live in one of the units.

Operating a small business in Ontario or in any jurisdiction means that the proprietor must abide by the laws of the land. For most businesses this means that they have to obey employment laws, environmental laws, safety laws and local bylaws. Businesses must deal with an increasing amount of red tape and comply with an increasing number of rules. Some bureaucracy and rules are needed to maintain a civilized society, but, in Ontario the interference of government and the burden of red tape has become a major drain on the productivity of businesses. To put this in perspective, there is apparently a rule specifying what colour a chicken farmer must paint the interior of his barn!

There are honest business people and there are dishonest business people in every sector of the economy. Most businesses (including landlords) treat their customers well and provide the product or service according to the terms of the sale or contract. If they did not, the business would soon not have any customers. A good customer (tenant) is not just someone who pays the invoice (rent) on time; that is only part of the relationship. A good business relationship is a win/win situation. Both are happy and continue the relationship.

Most businesses can choose who to do business with. If a repeat customer constantly complains about the product, and the proprietors efforts to please the customer result in more complaints, the proprietor can choose not to interact with the customer and refuse future business. Businesses must be competitive in the marketplace and price their product accordingly. Two businesses can sign a contract and each side is expected to live up to the contract. If two businesses have a disagreement that they cannot resolve themselves, they can go to court to obtain restitution. In court, they are equals. These are just some of the responsibilities and rights of a business person.

Landlords seem to have more responsibilities than the average business but none of the rights of other businesses.

In the marketplace, one can buy a $200. pair of shoes that are well made and will last for years. One can also buy a $10 pair of shoes that are not of the highest quality. You get what you pay for. This logic does not apply to the residential tenancies business. An individual can rent a low rent unit then turn around and apply to a government board and insist that the less expensive product be upgraded to a much higher standard with no change in the price.

A residential tenant can choose to do business elsewhere and move without permission from a government board: a landlord does not have the right to no longer do business with a tenant.

A customer has the option of finding another product/service with a lower price. Most businesses can increase their prices when warranted or when the market will bear a price increase. Tenants have the option of finding another supplier with a lower price but landlords cannot increase prices at will. If the business is a residential tenancy the government controls what the business person can do.

If a customer of a small business willfully damages the proprietors property it is called vandalism. The police will arrest the individual and usually issue a restraining order barring the person from the premises. In residential housing, the customers, because they are called tenants can damage the property and then get a government paid lawyer to help them at a government funded board to make the business owner fix the damage. The board will often make the proprietor of the business refund some of the payment for past services to the customer due to the “substandard” condition of the proprietors premises (caused by the customer).

In a store, if a customer is harassing other customers, he or she will be told to leave by the proprietor. Police will respond and remove the offending individual. It is in the best interests of the proprietor to remove the bad customer otherwise they will lose their good customers. A landlord has no authority to remove a bad tenant to protect the enjoyment of the good tenants. When it takes months and months of red tape and bureaucracy to finally get permission to evict a bad tenant, the good tenants will have all moved because the landlord could not protect them.

A business can post a sign saying “no dogs allowed except service dogs”. A business does not want a poorly trained dog with an irresponsible owner damaging the property or bothering other customers. A landlord is expected to welcome a tenant’s rottweiler who is aggressive to other customers (tenants) damages the property, defecates in the premises and barks constantly. Other customers are entitled to peaceful enjoyment. A landlord however cannot protect other tenants from situations like this. The landlord cannot do anything without permission from the government board. By the time, the proprietor can obtain an eviction order, the good tenants will have all moved; again the reason for many to move is because the landlord could not protect the good tenants from the bad tenant..

If this sounds like something out of an Orwellian novel, you are not far off the mark. It seems that being a residential landlord in Ontario is no longer a business with rights. Landlords must get approval from Big Brother before taking any action.

In a civilized society there must be protections for people from unfair business practices, however, where residential tenancy legislation is concerned, the pendulum has swung far too far to the left and it is time to bring it back to the middle.

Clearly the current government does not respect residential landlords because the government has created a set of rules, mandatory paperwork, red tape and bureaucracy that make it extremely difficult to run a residential tenancy business. The legislation even overrules contracts (tenancy agreements) between a landlord and a tenant. The government seems to be of the opinion that all landlords are dishonourable people and all tenants are victims. Under the current rules, it is the landlords (and the good tenants) who are the victims. A landlords biggest challenge is to protect good tenants from a bad tenant. There is an old fashioned phrase that says “One bad apple can spoil the whole bushel”.

Many landlords have tried to vent their frustrations with the current mandarins in power. The elected officials in government are not listening and will not likely listen. What is the point of complaining to the very people who authored the odious Residential Tenancies Act and gave a mandate to the Landlord and Tenant Board to be Big Brother. Is it an overstatement to say that bad tenants, backed by the government are holding landlords (and good tenants) hostage?

Small landlords, like most other businesses provide a valued product or service to the community. People need gas stations, grocery stores, barbershops, automotive repair shops and other services but they are not legislated to the point where they cannot close and revamp their business or refuse business. Small landlords are not civil servants who are paid union wages to provide an essential service. Because rental accommodation is needed, the current government has essentially legislated landlords into a status similar to that of an indentured servant.

What can a landlord do?

It is apparent that there is no point in attempting to reason with the current government (Liberal). They have shown themselves to be totally insensitive to the plight of small landlords and the rights of landlords to conduct their business without Big Brother approval of decisions and actions. The current legislation is bad but it will undoubtedly get worse if the Liberals win in October. Here is a twitter quote from a Liberal called @mcguinty4more “Time for landlords to give written explanation why a tenant was denied! No explanation = LTB good! “

Here is another Liberal opinion from @mcguinty4more “Let’s make Law Enforcement evictions stop! Police harassment of tenants must end! NO MORE SHERIFFS! “ Such rhetoric is reprehensible.

We live in a democracy and there is an election in October. A change in government is needed. It is time to fire Big Brother.

Who should landlords support this year in the provincial election; there is no point in scattering our votes amongst the various parties. Each of us gets one vote. In my opinion, the NDP are not likely to empathize with the plight of landlords and are not known for being business savvy. The Green party seems focused on global warming and other environmental issues and are unlikely to form the next government since they currently do not have a single seat. The PC party platform book called “changebook” shows that the party and the leader have their feet on the ground and understand the difficulties of running a business. The PC platform states that they will reduce the red tape involved in running a business. I believe the slogan is “We will be the best friend small business ever had”. These statements are generic. All business people must each interpret the statements in terms of the business that they operate. No party can be expected to provide exact details for every different kind of business. Does the platform say that the rule governing the interior paint colour for chicken barns will be changed or eliminated? No it does not. In politics, the message must be short and simple.

Assuming the PC party forms the next government, small businesses (including landlords) will have a much better chance of being heard.

The Liberals get help, volunteers and massive donations from the big public sector unions such as the teachers. No such body of support exists for the PC party. If landlords want a government that will listen to them then perhaps landlords could help make change happen. There are 107 electoral ridings in Ontario Every single riding has small businesses including small landlords. Find out who your local PC candidate is and volunteer to help; a donation would not hurt either. One months rent from one unit could be a very good investment (yes you get a tax credit).