Being a Landlord in Ontario
I received in the mail yesterday my real estate broker’s regular newsletter. In it there is an article entitled “Becoming a Landlord – Do Your Homework”. The first sentence of the article is “Ontario may just have the strictest legal requirements for landlords in North America.”
In my opinion, the article ought to be re-titled “Becoming a Landlord – Have Your Head Examined.” I don’t know if it’s fair to say that Ontario has the strictest landlord laws, but I think it is very fair to say that the Landlord and Tenant Act is extremely tenant-friendly. My criticism is NOT with the existence of the LTA’s terms, rather it is with the inflexibility of the system. I will be the first to recognize that the legislation was put in place in response to actual examples of what slum-lords have done to tenants. I will also be the first to recognized that even with this legislation in place there are still slum-lords operating in Toronto and throughout the province (thankfully, none of them are my clients). I should also say that in the past I have represented both landlords and tenants in various matters and I do not have a bias in favour of one or the other. The difficulty is that the legislation which was enacted to avoid the abuses by landlords years ago swung the pendulum way over to the other side and now permits abuses by tenants. There is no fair balance. Some will say, “yes, that’s true, but it’s a policy decision made by the legislature that it is entitled to make.” I agree. But that doesn’t make it right and it is ultimately, then, a choice between two evils.
I should also point out that I am dealing with residential tenancies here, not commercial tenancies. So, this will affect small businesses, for example, where they purchase a building that has a main floor store front or office space and then an apartment or apartments in the floor(s) above.
The Ontario legislature’s desire to protect tenants from slum-lords the legislation has turned into a nightmare for decent landlords to get rid of problem tenants. Let’s give a few examples. The first area is rent. If the tenant fails to pay rent on January 1, the landlord must give a notice, if the notice is ignored, the landlord can bring an application to the Landlord and Tenant Board to have the tenancy terminated for non-payment of rent. The Board hearing might not be scheduled until April 1. At any point up until the start of the hearing, the tenant can pay the rent – and remember, we are only talking about January’s rent. If the tenant has failed to pay February and March rent by that time, a new application (or applications) must be filed. So, if a tenant wanted to be perpetually late, the landlord has to bring a series of applications and if the tenant pays at the last second, the landlord is precluded from kicking the tenant out. The legislation was put in place to avoid slum-lords from using the slightest delay in rental payment as an excuse to kick out a rent-controlled tenant and replace him or her with a higher paying tenant. The problem is that it is now open to abuse by tenants.
Another example, I have a client who is a superintendant at an apartment building. The client has a dispute with one of the tenants. One day, my client alleges and I personally believe him but it has never been fully decided at the LTB or in court, the tenant decided to throw a 4 litre bottle of oil off the tenant’s balcony and narrowly missed my client working many stories below. This type of conduct is completely reprehensible and ought to be a justification for immediate eviction of the tenant. An application for this relief was brought to the tribunal. The application was dismissed. Why? Because it was not a “continuing” event. The provision in the legislation was clearly aimed at situations such as tenants who play their music loudly or have parties all the time. The result is that the tenant would have to keep doing acts which endangered my client’s health or amounted to a nuisance for an uninterrupted period of seven days before the tenant could be evicted. Perversely enough, if the tenant does whatever the problem is for six days in a row, then takes a day off, and then goes another six days, then takes another day off, etc., etc. there is little that a landlord can do. Again, a provision in the legislation that is open for abuse by tenants.
A third example, in the most recent round of legislative reform landlords were precluded from being able to request that tenants permit the landlords to directly debit the tenants’ bank accounts for the rental payments. This is joined with the existing provision that landlords cannot ask for post-dated cheques. The only guaranteed obligation of a tenant, regardless of the nature of the tenancy, is that the tenant pays rent. Direct debits permit the landlord to more cost-effectively get paid. The argument against direct debits is that sometimes the tenant doesn’t have the money on the first. If that’s the case then (a) the tenant is in breach of the lease and that’s the tenant’s problem; and (b) if the tenant writes a cheque on January 1 hoping that it will be deposited on January 2 at the landlord’s bank and that by the time it makes it over to the tenant’s bank on January 3 there will be money to cover the cheque, the tenant is engaged in “cheque kiting” which is illegal – and something the law should not be encouraging.
I could go on. Suffice it to say, over the years I have had opportunities with friends and otherwise to invest in real estate which would make me a landlord, either directly or indirectly. In light of Ontario’s legislation, I have steadfastly refused. Those who are landlords are either braver souls than I, or maybe they should have their heads examined.
courtesy of Christoper A.L. Caruana