Posts Tagged ‘help for landlords’

Important for all Ontario Landlords: Bill 112 to Second Reading

Friday, November 12th, 2010

FYI – Please See the full Bill 112 here:

http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&Intranet=&BillID=2408

This bill has passed first reading and has gone to second reading.

EXPLANATORY NOTE

The Bill makes several amendments to the Residential Tenancies Act, 2006, including the following:

1. The Bill increases the time limit for most tenant and some landlord applications to the Landlord and Tenant Board from one to two years. Tenants can go back in time two years to file a complaint.

2. The Bill requires a landlord who terminates a tenancy for personal use to compensate the tenant and expands the circumstances in which a landlord is required to compensate a tenant if the landlord terminates a tenancy for the purpose of demolition or conversion to non-residential use. Formula given for compensation.

3. The Bill prohibits a landlord from increasing the rent charged to a new tenant by more than the guideline and abolishes landlord applications to the Board for above guideline rent increases where there has been a significant increase in the cost of utilities. No new rent increases to market rent beyond the guideline when you have tenant turnover.

4. The Bill requires that the Board dismiss an application from a landlord who has been given a work order under section 225 of the Act or an order under section 15.2 of the Building Code Act, 1992 and has not completed the items in the work order or the order. Excuse for not paying rent.

5. The Bill requires a landlord to obtain a licence with respect to a rental unit in a residential complex containing six or more rental units in order to enter into a tenancy agreement or renew an existing tenancy agreement. Money grab for Multi-family 6+

Something that we should not ignore! This would not only radically change the rental industry affecting each and every landlord from the smallest LL to the largest corporation, it would demand the creation of a huge new bureaucracy policing the actions of all of us!

Find your Ontario MPP here: http://www.ontla.on.ca/web/members/members_current.do?locale=en

Make sure they know how you feel. Call them or put something down in writing, make sure that they hear their constituents point of view.

Please also make your feelings known to the Minister of Housing:

Hon Rick Bartolucci, MPP
Minister of Municipal Affairs and Housing
Ontario Liberal Party

Contact Information:

rbartolucci.mpp@liberal.ola.org

Ministry of Municipal Affairs and Housing
17th Floor
777 Bay Street
Toronto, Ontario M5G 2E5
Tel 416-585-7000
Fax 416-585-6470

Yet Another Day at the Landlord and Tenant Board

Friday, November 5th, 2010

Today I paid a visit to the local Landlord and Tenant Board (LTB) office here in my new hometown of Mississauga, I began filing my applications at this office having just moved to the area.

From my handful of trips to the Mississauga office I have encountered many new generation Canadians. I know however thru my conversations with some while waiting in line that many here are small time landlords much like the ones that make up the core membership of the Ontario Landlord Association. Inevitably I end up helping out landlords who have questions. Many of the landlords are new to the game. I shutter to think how exposed they are in their limited knowledge of the Residential Tenancies Act. What chance would they have in dealing with problem tenants like the ones I was there to deal with? A N8 application for 6 months of late payments, a N5 for moving in a washer and dryer into a small 2 bedroom unit which that refuse to get rid off.

The common small scale landlord does not stand a chance against professional tenants, their free duty council and a system designed to keep tenants from being quickly evicted while the landlord foots the bill.

I arrived shortly after 12 pm, perfect, lunchtime. One window was open with one staff member manning her computer. Luckily there is not much of a crowd waiting and I am here for a simple application. Here is where the experience gets rocky. As I am being served I tell the administrator who is processing my application that I have an L2 application due to an N5. The admin does her job and asks me a few questions such as “is this a first or second N5? did they didn’t correct the problem?”. Those of you who are familiar with the application process will know about the section where you must state the rent on deposit for Last Month’s Rent (LMR), when the deposit was taken, when was the last time interest was paid. I informed her that I just apply the interest to LMR which will also increase by the exact same amount, essentially it’s a wash. She informed me that I must write them a cheque and they must in turn write me a cheque back for the exact same amount or I could be charged with a provincial offense. She then told me that the fines were really high and handed me a pamphlet “The residential tenancies act offenses” listing all the infractions that person could be charged with, in the pamphlet it states “It is an offense to fail to pay the tenant interest on the rent deposit when required”. While the statement may be true, crediting the tenant’s LRM is also an allowable form of payment however she insisted I was to give the tenant an cheque for the interest amount and it was then up to the tenant to pay that amount back into LMR “some tenants will and others won’t then you can charge them for it when they move out”.

According to her theory, Landlords are to pay interest out, while the tenant may or may not repay that amount back to the Landlord to top up LMR and it will be up to the Landlord to file either a $170 LTB application against a tenant who is vacating a unit most likely before a hearing date occurs. Or they can choose to file a smalls claims court suit keeping in mind the tenant will most likely not provide a forwarding address. All this for most likely less then $50 in interest, but $50 that was rightfully owed to the Landlord.

Yet another blunder when I informed her that this was a second L2 application the first was for a N8 notice because the tenant has persistently paid rent late over the last 7 months. She questioned why I was filing this second L2 as my hearing on Nov 4 would evict them for persistently paying rent late. I informed her that this is not the case. As some of you might know a first time application for persistently paying rent rarely leads to an eviction. She told me that she has never heard of that being the case and that wasn’t her experience, all the while shaking her head and continuing to type. Thanks for the information Landlord and Tenant Board!

Luckily I’ve had some experience and a great resource, The Ontario Landlord Association. I truly feel sorry for the little guys who are swimming with sharks, they must feel like they are alone on an island with nowhere to turn for help. This is why we must get the OLA name out there.

Ken S

The OLA and OLA Members in the Globe and Mail!

Tuesday, October 19th, 2010

The landlord blues

DAKSHANA BASCARAMURTY

From Tuesday’s Globe and Mail
Published Monday, Oct. 18, 2010 3:18PM EDT

Mathieu Mazur-Goulet has three tenants living in the house he bought a year ago in an up-and-coming Ottawa neighbourhood, but he’s still waiting to break even. The 26-year-old government policy analyst bought the triplex for $257,000 and expected he’d pull in $2,700 each month to cover his fixed costs and return a modest profit.

But unexpected repair costs have made what he thought would be a great long-term investment a major drain on his personal savings. He bought the house thinking it was the perfect “passive” investment: He wanted to live in it after he started a family and planned to rent it out until then.

In a time of economic uncertainty, the idea of investing in property rather than mutual funds can be attractive, and figures indicate that more Canadians are getting into the landlord game. The Toronto Real Estate Board says the number of leased properties is on the rise; between May and August, 6,712 condominiums and townhouses were rented – an increase of 18 per cent from last year’s figures. “Many newly completed units are held by investors who have chosen to rent their units,” the board says in its most recent newsletter.

But new small-scale landlords are often hit with the costs of unexpected repairs, the struggle to find good tenants and the stress of not knowing whether the rent will be paid each month. While it may seem like a lucrative way to invest your money long term, getting cash flow out of an income property is not always a passive affair.

Without properly evaluating how rentable a unit is, income properties can lead to bad credit. “Maybe the property is vacant for a period of time,” says Ryan Chelak, an Oakville, Ont., real estate broker. “You start getting behind on your mortgage, which is a tight leash to handle.”

For Mr. Mazur-Goulet, the problems began just hours after he bought the house. His insurance broker said he wouldn’t cover rental properties. Another wanted to charge him $5,000 a year, while some required detailed (and expensive) inspection reports. He finally found one that was willing to insure the house without making it unmarketable.

But that was far from the last hiccup.

It turned out the previous owner fancied himself a handyman. The bathroom in the basement apartment was industrial carpet on top of poorly laid vinyl tile on top of plywood. The unit sat vacant for months (the two others were occupied by long-term tenants) as Mr. Mazur-Goulet fixed the bathroom and made other repairs.

But poor maintenance wasn’t limited to that part of the house.

“One Sunday, I received a voice mail from my tenant telling me, ‘Mathieu, my ceiling is raining,’ ” he says. “You couldn’t imagine the dread that came over me at the time.”

He had to dip into his personal savings for the $5,500 to cover a partial roof replacement. This month, the hot water heater went bust and he had to spend $2,500 to replace it. Neither of these were costs he could pass on to his tenants, though he can write them off against his income at tax time.

Now, with all three units occupied, he’s bringing in $2,700 a month in rent, while trying to stay on top of expenses of $2,500 (which include mortgage payments, insurance and property tax as well as some repairs). But he has some financial catch-up to do.

What’s he’s thankful for, though, are good tenants. He joined the Ontario Landlords Association, which gave him tips before he purchased the triplex. After reading other members’ horror stories, he learned the importance of finding the right people. He carefully checked the references of those applying for the basement unit before he found the ideal candidate.

Jane Schweitzer wasn’t so lucky.

The 39-year-old, who works in dental administration, says she went through much turmoil last year when she tried to get rid of a problem tenant who lived in a Brantford, Ont., house Ms. Schweitzer and her husband own.

While real estate is affordable in Brantford, the rental market is hardly booming, which meant she did not have much choice in tenants. Various problems mounted until Ms. Schweitzer initiated eviction proceedings, a process that dragged through the Landlord and Tenant Board for months before the woman left.

“It consumes your life,” Ms. Schweitzer says. “You feel your house is being held hostage on you.”

Income properties just aren’t worth the trouble to her now. She plans to sell the house.

Dave Peniuk also chose a seemingly good deal over rental-market research and had to pay for it in a big way.

He was inspired to buy two multiunit houses in Niagara Falls, Ont., after seeing a late-night infomercial on investments properties. He forked over a few thousand dollars to attend a hotel seminar that promised no-money-down deals and that he’d make enough to retire after just six months. He waited for the money to roll in.

He had little idea who was renting his units, since he paid a property manager (whom he’d inherited with the house) to find tenants. After 10 months, about half the units were vacant on a semi-permanent basis. The rental income wasn’t covering Mr. Peniuk’s $3,600 monthly expenses.

He spent $10,000 trying to spruce up two long-vacant units in the six-plex but even that wasn’t enough to attract tenants to what had become known in that seedy neighbourhood to be a crack house.

He eventually sold the houses. By the end, he lost $35,000 out of his own pocket.

Mr. Peniuk still wasn’t ready to give up on the income property game – he knew he just needed to gain skills to play it better.

He moved to Burnaby, B.C., in 2006 and started to buy properties in Kelowna, Nanaimo and Toronto. He hired some highly recommended property managers to look after the B.C. units. He has a strict process in place for screening tenants, and he makes sure that all sign detailed rental agreements.

Now, he and his wife are full-time investors with $5.5-million in rental real estate.

“It’s not a superactive business, but it should not be considered passive,” he says. “It’s like any investment. You don’t just buy a stock. You should do your research on it.”

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/the-landlord-blues/article1762225/