TENANTS IN NEW BUILDINGS (November 2018) BEWARE!
The Globe and Mail ran a story (Developers forge ahead with apartments amid easing of Ontario rent-control rules December 31, 2018) about three developers who have committed to building more rental housing, ostensibly because rent control has been removed in relation to the projects they were contemplating. This story, unfortunately, leaves a lot to be desired and creates the impression that until recently Ontario had a full rent control regime. This is not an accurate portrayal of what the law in Ontario has been.
A brief history of rent control in Ontario requires us to consider the “dark days” before the coming into force of the Tenant Protection Act in June 1998. Prior to this date, Ontario had a very confusing mix of rent control laws where rents, in many/most buildings were actually registered rents and the lawful amount of rent that could be charged was regulated and controlled at all times by a government bureaucracy. If a landlord charged a tenant a “market rent” but this amount was higher than the registered rent there was a system by which tenants could get rent refunds. The reality of this situation was that many landlords had buildings where the rents were unable to support maintenance and renovations and buildings fell into disrepair. Under this system, (pre-June 1998), few developers could be convinced to build new apartment buildings as the revenue from rents was so tightly controlled.
This changed with the Tenant Protection Act and specifically section 124 of that act. This section provided that the legal and lawful rent for an apartment was the amount that a landlord first charged to a tenant. The entire history of registered maximum rents for specific rental units was gone. This meant that whenever a landlord had a vacancy the landlord could charge the incoming and new tenant any amount that they wished—essentially, whatever the market would bear. This, as you can imagine, was an earth shaking shift away from serious rent control. While some tenants may reside in a unit for a very long time, many tenants are mobile or transient and their “moving” on a somewhat predictable time frame allowed landlords to adjust the rent to market rates (presumably upward but not necessarily) between tenancies.
The “rent control” that remained after the passing of the Tenant Protection Act was that the rent charged to a tenant, during a tenancy, could not be increased more than the percentage calculated and allowed by the government. The government calculated an annual percentage that was similar to an “inflation” amount and the intended effect was that tenants couldn’t be priced out of their apartment by an exorbitant rent increase that might be disconnected to economic realities (i.e. a rent increase designed to evict). The effect of a rent control during the tenancy and no rent control between tenancies was a partial rent control or a partial de-control depending on one’s perspective.
The Tenant Protection Act, like current legislation, also extended the exemption from partial rent control to certain specific buildings (lifting rent control entirely). In June 1998, that exemption applied to rental units never rented since July 1975 or no part of a building residentially occupied before 1991 (basically anything built after 1991 had no rent control).
This partial rent control exemption continued through various legislative amendments and even into the new (and currently named legislation) the Residential Tenancies Act (RTA). The RTA was passed in 2006 and came into effect on January 31, 2007. The RTA continued the partial exemption from rent control and landlord’s could continue to charge any amount of rent that they wished for new tenants. Hence, one a rental unit became vacant the landlord could charge the next tenant any amount that the market would bear or the tenant was willing to pay.
With the RTA we saw a newish exemption date—but conceptually similar idea, with the exempting of any rent control from tenancies in rental units that were not occupied for any purpose before June 17, 1998. What this means, in practice, is that rental units that fit this exemption and tenants living in these rental units, could have the amount of their rent raised to any amount whatsoever—once every twelve months with 90 days notice. Fortunately, this exemption flew under the radar for the longest time. Most landlords, most tenants, and people generally believed that there was rent de-control between tenancies but that during a tenancy the amount of the increase was limited by the published annual amount set by government. The outcome was that while there were many rental units (and more and more as time went by and more were built) that were exempt from the annual percentage increase amount most landlords only applied the annual percentage increase amount established by the government or some other amount that was reasonable enough to maintain the tenancy.
The big problems in rental housing started with the boom in real estate generally and what can be considered to be a housing shortage in Toronto. Rocketing real estate prices made rental housing increasingly valuable. Market rent for an apartment increased as well as housing increased and the market supply tightened. Inevitably, tenants who were used to get rent increase notices in accordance with the annual guideline amount set by the government started getting double digit percentage increases because their apartment could actually command that amount of rent. The landlord’s expenses did not necessarily increase and the cost of carrying the building did not grow exponentially—landlords simply discovered that their existing buildings could make them a lot more money.
The breadth of the exemption from guideline increases (i.e. the date that it goes back to), was largely the problem. Philosophically, you can understand that a landlord who has invested in a new building (say up to 10 years old), wants to be able to recoup that investment as quickly as possible in accordance with what the market would allow if rents were unregulated. The counter point, and what seemed unfair to many, is that the exemption from rent control (during a tenancy), had existed for so long (since the Tenant Protection Act in 1997 reached back to 1991), that landlords were just getting a massive windfall on buildings that were long paid for. Essentially, landlords were hitting a jackpot because of a booming real estate market and not because of any investment in the quality of their existing rental stock.
The RTA was amended on May 30, 2017, to remove that exemption to the special category of rental units (based on the age of the unit or occupation of it—i.e. 1975, 1991, 1998), in which landlords could raise the rent to any amount that they wished even during the occupation of the rental unit by a tenant. Tenants now, could only face an annual guideline increase in accordance with the amount set by government capped to a 2.5% increase on the monthly rent amount. Of note, this big change that so upset the real estate developer world did not in fact take away the right to charge any amount that a landlord wished between tenancies. The market rent can always be charged for a rental unit when a tenant vacates and a new tenant takes possession. Also continued, is the right for landlords to seek Above Guideline Rent increases in the event that there are extraordinary costs incurred in relation to improving or maintaining the residential complex.
From approximately May 30, 2017 (it was backdated to the date of the announcement), landlords lost the right to increase the rent for certain exempted units to any amount that they wished. Arguably, this gave a lot of stability to tenants who were living in apartments that had affordable rents—or perhaps phrased another way---rents that they could afford. No longer could a landlord raise a rent by 30%,40%, 50%, or any other percentage merely because the apartment could command this amount of rent in a booming real estate market.
There is an underlying public policy in the provisions of the Residential Tenancies Act. If you think about it for a while, you will recognize that a stable rental market contributes significantly to stable families and a stable workforce. People are connected to their community through the location of their home. Just think about the impact on employers if their workers were constantly quitting, or late to work because they were moving again. What about children who have to transfer schools if the parents are moving regularly because the rents are being legally increased to an unaffordable amount? Is this healthy for kids? How about the connection that people have to important services such as their doctor, groceries, family, transportation, social clubs, sports, etc., that is closely connected to where they live. When rents are unpredictable and the renting population finds itself constantly moving or under threat of being evicted by unaffordable rent there is a certain societal instability that comes with that which I don’t think anyone would say is “good”.
The Globe and Mail article reports on the removal of rent control that the current Ontario Conservative government has given us. New legislation, removes the limit on annual guideline increases from rental units that are built or firstly available after November 15, 2018. Tenants who move into these kinds of units are subject to unlimited annual rent increases at the whim of the landlord. Now this doesn’t mean that the landlord has to inordinately increase rents for those units but the landlord will indeed have the right to do so. Whether this is good or bad is left to be seen. However, I can’t help but feel like this is a big déjà vu reflective of the passing of the Tenant Protection Act in 1997 when this conception of a special exemption was first introduced.
This current exemption, I don’t anticipate will cause much difficulty in the near future. Rental units existing before November 15, 2018, will still be subject to a maximum annual rent increase as set by the province. Rents can still be adjusted between tenancies and landlords with older buildings can still apply for Above Guideline Rent Increases. I suppose what is a little surprising in the article is that you have the sense of a jubilant developer community because of the removal of the annual rent increase control for buildings constructed or occupied after November 15, 2018. Given how the various governments create, change, and remove this particular exemption (as evidenced by the history of the exemption), I can’t imagine that any developer is really modeling a residential rental complex relying on this current state of the law.
For those interested in seeing how the current Conservative government effected the change here is the wording of the exemption from the Restoring Trust, Transparency, and Accountability Act, 2018, S.O. 2018, c.17 (Bill 57):
SCHEDULE 36
RESIDENTIAL TENANCIES ACT, 2006
RESIDENTIAL TENANCIES ACT, 2006
1 The Residential Tenancies Act, 2006 is amended by adding the following section:
Exemptions from rules relating to rent
6.1 (1) In this section,
“addition” means, with respect to a mobile home park or land lease community, an expansion beyond the boundaries of the mobile home park or land lease community; (“rajout”)
“commencement date” means the day section 1 of Schedule 36 to the Restoring Trust, Transparency and Accountability Act, 2018comes into force. (“date d’entrée en vigueur”)
Buildings, etc., not occupied on or before November 15, 2018
(2) Sections 120, 121, 122, 126, 127, 129, 131, 132, 133, 165 and 167 do not apply on and after the commencement date with respect to a rental unit if the requirements set out in one of the following paragraphs are met:
1. The rental unit is located in a building, mobile home park or land lease community and no part of the building, mobile home park or land lease community was occupied for residential purposes on or before November 15, 2018.
2. The rental unit is entirely located in an addition to a building, mobile home park or land lease community and no part of the addition was occupied for residential purposes on or before November 15, 2018.
Rental units in detached houses, semi-detached houses or row houses
(3) Sections 120, 121, 122, 126, 127, 129, 131, 132 and 133 do not apply on and after the commencement date with respect to a rental unit if all of the following requirements are met:
1. The rental unit is located in a detached house, semi-detached house or row house which, on or at any time before November 15, 2018, contained not more than two residential units.
2. The rental unit is a residential unit that meets all of the following requirements:
i. The unit has its own bathroom and kitchen facilities.
ii. The unit has one or more exterior or interior entrances.
iii. At each entrance, the unit has a door which is equipped so that it can be secured from the inside of the unit.
iv. At least one door described in subparagraph iii is capable of being locked from the outside of the unit.
3. The rental unit became a residential unit described in paragraph 2 after November 15, 2018.
4. One or both of the following circumstances apply:
i. At the time the rental unit was first occupied as a residential unit described in paragraph 2, the owner or one of the owners, as applicable, lived in another residential unit in the detached house, semi-detached house or row house.
ii. The rental unit is located in a part of the detached house, semi-detached house or row house which was unfinished space immediately before the rental unit became a residential unit described in paragraph 2.
Non-application of exemption under subs. (2) or (3)
(4) Subject to subsection (5), the exemption under subsection (2) or (3) does not apply with respect to a rental unit that is subject to a tenancy in respect of which a tenancy agreement was entered into on or before November 15, 2018.
Application of subs. (4)
(5) Subsection (4) applies only with respect to the tenancy described in that subsection and does not apply with respect to any subsequent tenancy.
Burden of proof
(6) For greater certainty, in an application to the Board in which the application of subsection (2) or (3) is at issue, the onus is on the landlord to prove that the subsection applies.
Transition rules
(7) The following rules apply on and after the commencement date with respect to a rental unit, if subsection (2) or (3) applies to the rental unit and the unit is subject to a tenancy in respect of which a tenancy agreement was entered into before that date but after November 15, 2018:
1. Despite subsections (2) and (3), sections 121 and 122 continue to apply with respect to an agreement that was entered into between the landlord and the tenant of the rental unit under section 121 before the commencement date.
2. Despite subsections (2) and (3), section 132 continues to apply with respect to an application that was made by the landlord or the tenant of the rental unit under that section before the commencement date and was not finally determined before that date.
3. Despite subsections (2) and (3), section 133 continues to apply with respect to an application that was made by the tenant of the rental unit under that section before the commencement date and was not finally determined before that date.
4. Despite subsection (2), section 165 continues to apply with respect to an assignment of the rental unit for which the landlord granted consent under section 95 before the commencement date or which was authorized by the Board under section 98 before that date.
Commencement
2 This Schedule comes into force on the day the Restoring Trust, Transparency and Accountability Act, 2018 receives Royal Assent.
I just found your blag and have read HUNDREDS of posts and comments. I have a question that as yet I have not found the answer. My daughter is looking to rent a house in Ontario. The perspective landlord is demanding that she pay one year of his homeowner's insurance as a condition of tenancy. I am assuming this is illegal. Any information you can give will be greatly appreciated.
ReplyDeleteHi: Take a look at this article (also in this blog) https://ontariolandlordandtenantlaw.blogspot.com/search?q=illegal+security+deposits . As you can see from that article additional charges to grant possession are strictly controlled and are generally illegal no matter how cute or clever the landlord is. However, a tenant may be required to have tenant's insurance--which is very different than paying for building insurance for the landlord. Are you sure you have understood the demand correctly? Requiring the tenant to have tenant insurance is now a rather common requirement though it is perhaps a stretch to require a year prepaid. Further, I would imagine it impossible to pay a year of tenant's insurance prior to actually being in possession as a tenant.
ReplyDeleteAnyway, if you have understood correctly, and the landlord truly is demanding the payment of his insurance--then you have a claim to the LTB for the demand of an illegal deposit. Unfortunately, that doesn't do much to get you the apartment. Alternatively, you could make the payment, get possession and then apply to get it back--but maintain the tenancy. There are a couple of ways to approach this depending on your goals. It is probably worthwhile to speak with a lawyer or paralegal experience in LTB matters to pick the right course after an interview where your objectives can be explored.
Good luck
Michael K.E. Thiele
Thank you so much for the very helpful information.
DeleteAnd yes, I understood correctly. Paying his annual homeowner's insurance is a condition of renting from him.
DeleteCan the landlord raise the price because i have a girl friend
ReplyDeleteHi: Having a girlfriend is not a legal reason to raise the rent. Whether she moves in, sleeps over, isn't any of the landlord's business.
DeleteMichael K.E. Thiele
www.ottawalawyers.com
Hi Mr. Thiele - thank you so much for all your useful information.
ReplyDeleteI rented a my condo to a woman with 2 young kids, who gave me notice and moved out owing me a few thousand in rent. I filed an L9 with the landlord and tenant board, and her paralegal has filed a T2 and T6 in response. I suspect this is due to the fact that she was unable to use one of 2 showers in the apt ( in the master )for the last 9 months of her tenancy. There was still a bathtub, as well as another full bathroom with tub and shower in the condo. According to the the maintenance standards section of the Residential Tenancies Act, I am obligated to provide "a toilet, kitchen sink, washbasin and bathtub OR shower." She actually had 2 tubs and another shower. Will the board award her a rent rebate for the second shower? I attempted to repair it ASAP, however was limited by the management/super who did not seem to know what the problem was. Only about 6 months after a note was left on her shower, did the management bring in a plumber to ascertain what the problem was.
As well, she ripped off the wallpaper in the bathroom, replaced the vanity with a piece of junk, did a bad paint job, removed all my light fixtures, all WITHOUT my permission,and left a hug hole in the wall of a bedroom, as well as a clogged toilet from which a hairbrush was retrieved. (most likely wilfully).
Please give me your opinion on this situation. thanks in advance.
Hi Linda: Can you confirm whether the tenant was in possession at the time that you filed your L9? Your description makes it sound like you filed after the tenant moved out. If that is the case your L9 will likely be dismissed due to a lack of jurisdiction. The T2 and T6 will continue as the RTA permits a tenant to bring a claim at the LTB even after the tenant is out of possession. Your remedy will be at the Small Claims Court (presuming you filed after she moved out).
DeleteThe fact that the shower did not work for 9 months will likely entitle the tenant to an abatement. However, there are numerous factors that go into how much the abatement will be. You don't have enough details here that let me make an estimate at the amount of the abatement (if any). The range however is, I think based on what you describe, on the low end. If the problem was beyond your control then the abatement could in fact be nominal depending on the action you took with management.
In pursuing this claim I would make sure to put all of the issues in one application--either at the Board if filed in time--or proceed at the Small Claims Court. Don't split your claim--rent, damages etc., into a series of smaller claims.
Good luck
Michael K. E. Thiele
thank you for responding... yes, I did submit the claim while she was still living in the condo. I did not see the damages until after she moved out. There was no spot on the application form to claim anything other than rent + application fee, so thats what I filled in.
ReplyDeleteBut I intend to send photos and copies of emails to the landlord and tenant board before the meeting date. I am a very good landlord, for eg.fixed a clogged sink and electrical problem promptly for her . However, yes, I would say this was beyond my control since I had to wait to be informed by the management/super.
It also never seemed it was an issue for her, until of course after I asked her for the rent she owed me ($2800), then she gave me a letter from a paralegal claiming that I owed HER $3900, which included loss of the shower and all the items she ripped out without permission,and then wanted me to pay for them!
I don't expect to get any money from her in the long run, however, it upsets me that I went out of my way to be good to this woman, expecting she would take care of this condo (which was my mothers,very well kept in a desirable neighbourhood) which was in perfect condition, and do not want her to think she can just do these things and walk away. However, I also don't want to end up paying HER! I don't think I can change the amount of money I am claiming, but I can verbally describe what she did, hopefully reflecting on her character and credibility. Any suggestions on how to present my side a the board would be gratefully accepted.
Thank you again for myself and so many others, you are amazing!
Hi Linda:
DeleteYou would use the L2 form for the damages (page 4 reason #2). It looks like it is only an eviction form but no, it can be used for just the damages. I don't think you would be successful, but perhaps try to amend your application to include the L2 for damages. If you are unsuccessful it would be handy to have that decision just for the Small Claims Court if you proceed there for damages.
As for some useful sections of the RTA for you, take a look at section 30(2) which the Board is directed to consider: "In determining the remedy under this section, the Board shall consider whether the tenant or former tenant advised the landlord of the alleged breaches before applying to the Board". You will also want to focus on the time limit which is one year--see section 29(2). Beyond that I would strongly recommend that you read a case that deals with tenant applications for abatement of rent. The case I will refer you to is a binding appellate decision called Onyskiw v. CJM property Management. You will need to cut and paste this link: https://www.canlii.org/en/on/onca/doc/2016/2016onca477/2016onca477.html?searchUrlHash=AAAAAQAXbHltYW4gZWxldmF0b3Iga2luZ3N0b24AAAAAAQ&resultIndex=1
Sorry, I can't make links live in the reply section of this Blog. If you are nervous about cutting and pasting links--search the name of the case in www.canlii.org .
Just because a tenant has a unit that isn't perfect does not mean that they are entitled to a rent abatement. Take a read through this case and you will see the factors that the Court considers. The interesting parts (for you) start a little later on in the case.
Note that I have a few other articles in this blog that deal with how to present a case, how to prepare your documents etc.. You may wish to click through to some of these articles.
Good luck
Michael K.E. Thiele
www.ottawalawyers.com
Hi Mr. Thiele....thankyou for the useful and inciteful link. I must say that the people who work at the landlord and tenant board don't seem to be very informed, or maybe they are intentionally so.I phoned to ask about filing an L2 for damages as you suggested,and the guy insisted that it cannot be used for that. He insisted that it can only be filed after one of the 'N ' form has been filed, and the tenant had been given the opportunity to correct the damage. He also insisted it must be done while the tenant is still there. I'm sure you know better than him ! and the form itself actually states that it can filed up to 30 days after the termination date. I tried to explain that absolutely nowhere on the website is there info about filing for damages.....one must go onto the L2 form and read it in detail, and maybe, perhaps one would notice the one line which describes using the L2 form for damages, even after the tenant leaves. It almost seems they are hiding it. I was in fact told numerous times that damages have to be taken only to small claims court. Perhaps this would be a good topic for your next blog! I'm sure there are many cases where damage is discovered after the premises are vacated, and small landlords are unaware of using the L2 for this. In any case, I dont think they will let me add the L2 because I am now at 45 days after last tenancy date. I will try to use all the info you gave me at the meeting, I will let you know how it turns out......thanks again
DeletePS: do you have an index on your blog?
sorry, above comment was from linda
ReplyDeletedid you receive my response?
This is help for me..
ReplyDeleteCapital-Developments is introducing the new condo development project that goes by the name Azura Condos. The planned location for this project is Yonge and Finch which is an established yet fast growing neighbourhood in the city of Toronto. Just south of the Finch Subway Station the mega-planned community will be right in the middle of anything that you will ever need.
Hi Micheal, I just found your blog - thank you for posting so much info, it's truly helpful!
ReplyDeleteI have a question about the rights of a permanent occupant in a renting situation in Ontario. My roommate and I were living in a rental apartment for a year and both our names are on the lease as tenants. My boyfriend and I then decided we wanted to have a baby and I told my roommate that he and I plan to live together and are looking for another place. Boyfriend was living in another place with a different roommate at the time.
Since my roommate and I were month to month at this point, I offered to give him 1-2 months of my share of rent to tide him over until he could get a new roommate, but he suggested my boyfriend move in instead, because he didn't want to get a new roommate, furnish the place (everything was mine) and that he'd likely move or work abroad in the next year. He knew that our intent was to live in a place that we could stay at with the baby and afford with just our income (or 1 income) and had no plans to move after. So, my boyfriend moved in, was added as a permanent occupant through the property management office (roommate agreed to this in writing) and we each spilt rent and utilities 3 ways.
(Sidenote: when bf and I were looking for places originally, we'd also looked with his old roommate who understood that if the 3 of us found a place to live, she'd move after the baby came and our realtor was aware of that too.)
Now I'm pregnant and we said the roommate could move out any time, even after the baby is born, to give him time to find a place he likes. We're in a 2 bdrm and plan to have to baby stay in our room for the first 6 months or so.
Unfortunately, he's retracted what he said and now wants us to leave instead of moving as he'd agreed to before. He said he didn't realize it would happen so quickly and feels "inconvenienced by our life choices".
I'm worried that he'll try to kick out my boyfriend, but not sure if that's possible since he's a permanent occupant. Is this something that could happen?
Hi: Thanks for this interesting fact scenario and of course Congratulations on your pregnancy! The situation with the roommate is going to be a hassle. He sounds like a bit of a mooch given that you've furnished the place. It's fairly rude and inconsiderate on his part to back out of his agreement. Unfortunately, the Residential Tenancies Act is not going to help you with a difficult roommate. You can't force him to leave--and while your boyfriend doesn't have the security of being a tenant your rights effectively protects your boyfriend and gives him status in the apartment.
DeleteThe landlord is not in a position to do much for you either as the landlord doesn't have much authority on what is a roommate conflict. The Landlord and Tenant Board doesn't have jurisdiction to judge a roommate dispute either. So what do you do?
A question I'd like to ask you is what are the chances that your roommate will pay the rent when you are gone? As a tenant on the lease you remain responsible for rent even if you move out. Will the landlord agree to take your name off of the lease? Will the roommate go with you to sign you off of the lease? If the landlord agrees, and the roommate agrees, then I'd suggest you get your name off of the lease (as of a specific future date) before moving out. BEFORE being the key. Absent cooperation and a concern that the roommate will turn out to not pay rent etc., I'd serve an N9 on the landlord and/or I'd trigger a termination of the tenancy by not paying rent in the coming months (while of course looking for a new place to move to). Alternatively, advise the landlord that you need them to terminate the tenancy and evict so that your liability is capped. Perhaps then the landlord would even re-rent to you and your boyfriend (and not the roommate).
I'm exploring some of these creative options with you just because there is a housing shortage and apartments are at a premium. If finding a new place is not so difficult then the key will be to just get your name off of the lease for when you leave.
Best of luck
Michael K.E. Thiele
Hi Michael. I was impressed since started to read your responses on blog spot!
ReplyDeleteI need any helpful guidance and info, I can manage to find. I have two tenants who signed a lease, that is supposed to end, end of Feb. To now, only one tenant has sent an email, back a month ago, stating they will leave the address, with 60 days notice, without move out date. They never signed nor dated notice, sent from their phone. Is that notice legal? Is not the other tenant to send notice too? The tenants have been using, as say, 'medical cannabis' (as they then proclaim) in apartment, breaking the lease agreement, leading to complaints from other residents re: health and safety, fire hazard and forcing some to schedule move out of their apartment because of the smoke. They never have provided proof of medical need or accommodation need, due to a disability. They deny use, faced to facts to the contrary. There anything that can be done here? There has seem to be damage to a kitchen appliance, en suite, under the sink and t.b.d, and apartment needs an expensive clean, range from 500-2500 dollars from negligence, etc. If they did not have a pre- move in inspection, best approach a landlord can make in trying to recover damages from them? They do not know the tenancies act and they try to obstruct entry to the unit, reasons for repairs or for viewings. The tenant can be harassing and inappropriate. What is a landlord to do in this situation - seeing there is just a month or more on lease - before who knows if they move out? What can a landlord do to nip their non-sense quickly and mitigate any losses now, without spending too much time to?
Thanks for your thoughts!
Hi: The facts you describe have many levels and different issues wrapped into them. I can't address everything you've written but I will try to comment on the big issues. I presume that the property is in Ontario and that the tenant's are subject to the Residential Tenancies Act. It is unclear if the rental unit is in a multi-unit building that you own or in a multi-unit condo with other people living around your tenants who are either owners of those condos or tenants of those owners.
DeleteIt does seem that you want the tenants to leave--and certainly that makes sense. Whether the notice your received from the one tenant, via email, is "good enough" as a proper notice to terminate is matter that we could debate for quite some time and we could pull out caselaw going either way. So, to cut the speculation I would advise you to simply apply to the Landlord and Tenant Board for an Order terminating the tenancy on the basis of this Notice of Termination given. You can "accept" this notice and "agree" to terminate for 60 days from the date of the email--making this an agreement to terminate as opposed to a tenant's Notice to Terminate. The Application you would use is an L3 application that you can find on the Ontario Landlord and Tenant Board website. Once you file that application you should receive an eviction Order (in the mail) without a hearing being held. If the adjudicator reviewing your application has doubts about the application you might get a Notice of Hearing instead for the Order--hence it is important to clearly set out the facts in the L3 application. If you get an eviction Order in the mail then it is up to the tenants to either fight it or accept it. The tenants will have 10 days from the date of the Order to make a motion to set aside the eviction Order otherwise it is considered a final Order. Doing this takes the guess work out of wondering if the tenants will honour the email notice to end the tenancy.
Aside from the above issue, you clearly have a lot of problems in the unit with these tenants. There are a great many Notices of Termination that you could serve based on the facts you describe. In fact, with complaining neighbours (who might be your tenants as well?), you have a duty to take action. Take a look at the N5, N6, N7, Notices of Termination on the Landlord and Tenant Board website. Depending on how you choose to proceed any one of these Notices can lead to their eviction after hearing at the Landlord and Tenant Board.
You comment about their lease ending and wondering if they are moving out. I would say that this is not something to even bother thinking about. Rarely do tenants move out at the end of their lease. They have the absolute legal right to continue on in the unit on a month to month basis. They don't have to tell you or even get your agreement. They just continue on, on the same terms as during the fixed term of the lease. The tenancy continues until they give their proper 60 day notice (to end of term) or you evict them for the reasons permitted in the Residential Tenancies Act.
My general advice to landlords is that it is best to act immediately when you first become aware of problems. Act quickly to avoid causing resentment and upset with neighbours; act quickly to avoid even greater and more damage to your rental unit. Waiting and hoping is not a good strategy.
Hope that helps
Michael K. E. Thiele
www.ottawalawyers.com
Hi Michael,
ReplyDeleteOff topic question, my girlfriend and I rent a basement apartment in Ontario. The tenants above us are filing an N5 against us for a "smell" They claim that it is a very fragrant perfume smell and or hard drugs. We live a very simple naturalistic life style and have no hard chemicals in the house. The harshest chemically smelling product we have is windex.
To give this more context, they tenants above us asked only once if we were burning candles/incense I told them no we weren't. Because we were not burning anything and haven't since we have moved in. They took it further to our landlord a month later, in which I promptly brought every fragrant item we had in the house to them to find out which one it may have been to resolve the issue. Not a single one of the products they smelled of mine, resembled the smell in which they were complaining about. I then told them to contact me when they smelled whatever it was again so we could figure it all out. I haven't heard anything since (almost 2 months now) so I assumed that whatever the smell was is now gone. Although my landlord informed me earlier this week that they are serving an N5 notice to us for the aforementioned mysterious smell.
I'm curious on how much traction this complaint will get or how far it can go? I know there is no way concrete way to prove either for or against the "smell". Just curious on what could happen.
Thank you for your time.
Hi: It is rather foolish for the landlord to serve this N5. While it may be upsetting to receive one and the fact that an N5 has been issued invokes the legal process, this would I think ultimately play to your advantage. As you've indicated, there is no proof that you are the source of the smell. Your response to the accusation is quite helpful as it will play well if you find yourself before an adjudicator having to recount this story.
DeleteThe N5 is an odd in that it starts a rather complicated process. The first N5 is a voidable Notice of Termination. This means you must be given 20 days notice for the termination date. In the 7 days following the service of the Notice you have the opportunity to immediately stop the complained about behaviour and void the notice. After the notice is voided it is really only half void (possum analogy--or phoenix analogy--whichever you like). This first void Notice can rise up if within 6 months of it being served you do something again which justifies the service of another N5 (called a 2nd N5). This second N5 is not voidable and only has 14 days notice provided.
So to your question: The N5 is voidable, so if there is nothing then nothing comes of it. If something does happen, in the 7 days following service the landlord needs to prove the original issue and the issue that happened in the 7 days following service. If, nothing happens in the 7 days the first N5 is void and is half-dead for 6 months. If in that 6 months you do something then the landlord can apply on the second N5.
At the application based on the second N5 the landlord still needs to prove the first N5. Meaning he has to prove that you did the thing accused of. If the landlord can't prove the first N5 then it really doesn't matter what is in the second N5 because the second N5 (presuming a 14 day termination notice) can't support an eviction without a valid first N5.
So, in short, not very much is going to happen--on the assumption that you are not actually doing anything.
Good luck
Michael K. E. Thiele
www.ottawalawyers.com
Hi Michael,
ReplyDeleteReally appreciate the blog you run and all of the very useful information on your website. I wanted to get some advice regarding a situation that I'm in.
I recently moved out of a condo that I had rented for 1 year. I paid a $500 key deposit for keys and key fobs when I moved in. I moved out in the middle of December, and my tenancy ended on December 31. When I moved out, the landlord asked me to drop off the keys in an envelope in an office mailbox, which I did.
In the beginning of January, the landlord said that he received all of the keys, but that one of the key fobs wasn't working (we never had any issues with the key fobs in over a year, and the key fobs were working the day we put them in the mailbox). He also stated that the unit was not clean enough and required professional cleaning and painting. The condo was cleaned very thoroughly by myself, but the lease does state that the unit should be professionally cleaned upon moving out.
Since then we have exchanged many emails. He has still not returned the key deposit despite many requests. My guess is that he plans to use some or all of our key deposit to "repair" the broken key fob, as well as to have the condo professionally cleaned. My questions are:
1. Does he have a right to retain some of the key deposit if he claims that one of the key fobs is broken?
2. Can the key deposit money be used by him for any other purpose (i.e. having the condo professionally cleaned)?
3. What would you recommend that I do in this situation?
Thanks in advance.
Kenny
Hi Kenny:
DeleteAfter this many years of practicing law I have become a bit jaded. My immediate impression is that your former landlord is a scoundrel trying to take advantage of you. The $500 key fob deposit is highly suspect given that the amount is legally limited to the actual replacement cost and it must be refundable. $500 is a lot of money and even high security keys and specialized fobs these days are not that expensive. It seems to me that $500 is simply gouging.
The whole thing about "professionally" cleaned is a scam being perpetrated by unscrupulous landlords. The legal standard to which you can be held is "ordinary cleanliness" which is set out at section 33 Residential Tenancies Act. Beyond that, what does "professionally cleaned" mean anyway? I imagine that many people would say that professional cleaning is not what you might think. When I see the "professional cleaning" clause I read it as attempting to impose a legal standard that is higher than "ordinary cleanliness". Such a clause is void (importing a higher standard) is, I think, contrary to section 33 and therefore void in accordance with section 4 RTA. Imposing a painting obligation on you is--perhaps over the top as well. You don't say much about the paint but can I assume that any paint problems arise from ordinary wear and tear? If so, you have no responsibility for painting. Even if there is some paint problem beyond ordinary wear and tear--you don't owe your landlord a new paint job--just the loss in value of the old one [imagine a paint job having a useful life of 10 years (see the regulations), if your damage to the old paint job deprives the landlord of a year or more of the 10 year life span then your liability should be for that period of time. Think of it as paying the depreciated value not the new cost]. Ultimately, if the landlord wants to pursue you for the professional cleaning and paint he needs to file a small claims court action.
Given that emailing and talking with your landlord has gone nowhere I would recommend an application to the Landlord and Tenant Board. With you out of possession the landlord can not file any application against you. Take a look at the LTB T1 application which is on the Board's website.
Beyond that, I'd consider a T2 application simply because of the "scam" like behaviour of the landlord in relation to the amount of the key fob money and the professional cleaning demand. How often does this landlord play this little stunt and get away with it? I'm sure many tenants just look at this and feel annoyed but then just let it go. He may be counting on it.
Alternatively, if you have a little time see if you can get some traction with the Rental Housing Enforcement Unit--- if you get their attention they may lay charges against the landlord and he can deal with a provincial offences charge (you don't get anything out of this other than perhaps satisfaction).
Good luck
Michael K. E. Thiele
www.ottawalawyers.com
Hi Michael,
DeleteThank you for the quick response. It is very much appreciated. I similarly get the impression that the landlord is trying to scam us. We did a little digging into the Landlord - let's just say that his family has a suspect legal history with respect to real estate.
I don't think he has any case regarding the condition of the condo. The condo was cleaned by 2 people for a full day. His complaints regarding cleanliness consist of smudges on appliances, dust on baseboards, marks on glass shower wall etc. In terms of painting, we filled in and painted over all holes in the walls. There were some tape marks on the wall which we also painted over. The job wasn't perfect, and there were some tape marks still visible if you looked closely, but it was a significantly better than the job the previous tenants did with the walls.
I'm concerned that he is stating one of the key fobs isn't working. I highly doubt this is the case - we never had any issues with the fobs, they were used right before placing them in the mailbox, and there was certainly no damage to the fobs. He first stated there was an issue with one of the key fobs 3 weeks after I dropped the keys off in the mailbox. However, if he insists one of the fobs is broken, could this be an issue for us in terms of the LTB ruling and getting the full amount of the key deposit back?
I will file a T1 application, and look into the T2 and Rental Housing Enforcement Unit. I'm assuming there will be a hearing for the T1 application...what kind of documents/evidence should I have prepared for this?
Thanks again for your advice.
Kenny
Hi Kenny:
DeleteYes there will be a hearing. The evidence you bring is everything you have that is relevant to the issue. Three copies--if lots of pages--stapled together and page numbered is very helpful. You will want to prove the payment of the deposit. Is it possible to get any history from the building of the use of the fobs from their computer system? It may be possible to generate a record showing the use of the fobs. Even if they won't print it for you--can they give you a letter advising that it is possible? Failure to cooperate can be cured with a summons to witness being served on the property manager to come to the hearing to answer questions. If you used the fobs right up to the time of leaving--the use of them in an electronic record would be good evidence that they were "working".
Beyond that, the question about refundable deposits is not as clear as I thought it was. The prohibition against deposits of any kind is in section 134 of the Residential Tenancies Act (RTA). The exemptions are in section 17 of the Regulation to the RTA (see excerpt below). When you read the section it doesn't say refundable if returned in good working order. Is that implied? Perhaps. If it is implied, is the requirement of being in good working order absolute? What if the device broke through ordinary wear and tear? Note that generally under the RTA a tenant is only liable for damage that is caused wilfully or negligently. There is no absolute liability for all kinds of damage---hence, the extreme you went to in painting, cleaning, etc., is more than what the law requires as you are allowed to subject the rented property to ordinary wear and tear.
I've reproduced below section 34 RTA which speaks to a tenant's liability for damage. Unfortunately, I have a tough time reading this section to include key fobs. Is this standard (willful or negligent) to be implied with respect to the key fobs? It might make sense that it does (I think it does). Hence, if the landlord wants to deduct money from the deposit for direct replacement costs (assuming that is permitted--which isn't clear) then the landlord will need to prove that the damage was caused by the tenant's willful or negligent conduct. That is pretty tough to do if the fob is just "broken" but the reason is not obvious (i.e. to the naked eye it looks fine).
The passage of time is problematic for the landlord as well. I'd suggest that the failure to check the fobs at the time of return is a risk that the landlord should suffer. The landlord could insist that the fobs be returned and checked at the same time (especially if they're $500!). You could then be given a receipt for fobs returned WORKING or fobs returned NOT WORKING--or something similar. Otherwise you have this very situation where only three weeks after returning the fobs is it alleged they are broken. What happened in those three weeks? Did water get spilled on them, did a battery leak, did the landlord do anything that even accidentally subjected the fobs to damage? The fact is that the landlord can't testify that at the time you returned the fobs that they weren't working. Your evidence on that important issue will be the only evidence. If you dropped the keys in the mailbox (as directed) what happened to them between the time of dropping off and the landlord getting them? Entirely speculation.
Lastly, you do have to allow for the credibility assessment of the witnesses. Why would an adjudicator doubt your evidence? Nothing in what you describe raises any concerns about your credibility that could be judged from your behaviour. What can the landlord point at that makes it more likely than not that you somehow damaged the fobs? On that front, consider how the landlord's demands are contrary to the RTA. $500 is likely (I don't know for sure) far more than the direct cost of replacement. Hence he is already in violation of the RTA (if $500 is too much). That is a strike against him. He failed to inspect the fobs at the time they were returned or did not have a system for that. If you can establish that electronic records are available (even if not produced) and he did not produce them then that counts against him (consider informing the landlord prior to the hearing that he should bring the electronic records of fob usage to the hearing).
DeleteAlright, that's enough on this. Good luck and please report back what happens!
Michael K.E. Thiele
www.ottawalawyers.com
Exemptions from s. 134 (1) and (3) of the Act [This is from O.Reg. 516/06]
17. The following payments are exempt from subsections 134 (1) and (3) of the Act:
1. Payment for additional keys, remote entry devices or cards requested by the tenant, not greater than the direct costs.
2. Payment for replacement keys, remote entry devices or cards, not greater than the direct replacement costs, unless the replacement keys, remote entry devices or cards are required because the landlord, on the landlord’s initiative, changed the locks.
3. Payment of a refundable key, remote entry device or card deposit, not greater than the expected direct replacement costs.
Tenant’s responsibility for repair of damage
34 The tenant is responsible for the repair of undue damage to the rental unit or residential complex caused by the wilful or negligent conduct of the tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant. 2006, c. 17, s. 34.
Hi Michael. If tenants leave premise (leave it in a bad condition, i.e. repair, broken appliance), has landlord right to damage, loss of lease income; if it is a month or longer before it can be leased once more? Opinion on small claim court - like min. amt it may take to make claim worth while? How can a debt collection agency help? Kind regard,
ReplyDeleteHi:
DeleteWhat you describe is a rather common debate. Do you bother to sue the tenant who has left or not? The Small Claims Court process is straightforward enough and you can indeed represent yourself. So you don't have to have a lawyer or paralegal--although it will likely be smoother and have a better chance of success if you do. That being said, what are some of the major considerations in deciding whether it is worth it or not?
The biggest and most important consideration, from my point of view, is whether you have any reasonable chance of ever recovering any of the money that you win. You will spend some new money to pursue the small claims court action and enforcement steps will be even more new money--so before you know it you are at least $500 to $750 into the case.
The expenses are not so bad if your former tenant has assets or a job or some other source of income that you can take to satisfy what is owed to you. If the former tenant relies on Ontario Works or is on Ontario Disability Support Plan benefits then it is most likely the case that they are Judgment Proof--meaning, it doesn't matter what the Court orders them to pay there is simply no way to enforce it against them. You can't take welfare money or disability benefits to satisfy a Judgment.
If you don't think the tenant has any assets that you can seize (using the court process) then it really doesn't matter how successful you are in your claim against the tenant. The claim could be for $25,000 and it still doesn't matter how big the number is if you can't actually recover it.
If you think there is a chance that the tenant will become employed or will come into money or you are willing to just spend the time chasing the tenant then by all means go ahead. Just be aware that it can be a long road to getting your money.
The next big consideration is whether you will actually be able to track down the tenant in order to serve them the claim and then track them down to know where they are working so that you can enforce the Judgment you get. If you can't find the former tenant and there is little reason to think that you will in the future then you might want to consider not pursuing the claim. If you have a lot of identifying information--birth date, address, vehicle plates, driver's licence, then it makes it easier to find the tenant. But if you don't have that information can you even be certain that you have the tenant's legal name?
With respect to minimum amounts and what is "worth it" really depends on how likely it is that you will recover the money. A low dollar value claim can be worth it if you win and actually collect. A high dollar value claim is useless if you don't recover any of it. Note that the Court itself will do nothing to enforce the Judgment against the tenant. That job is yours or anyone that you hire (and pay) to do the enforcing.
With respect to collection agencies I can say I have had experience with very effective ones and also very bad ones. Getting a collection agency to take just one claim or Judgment is more difficult than if you handed them a stack of claims. In your case I would imagine that a collection agency would only be useful if you go ahead and get the Judgment as opposed to relying on them getting the Judgment. Which way to go really depends on the company/person you hire or turn the collection work over to. Speak with them first before taking action. Perhaps you can find one that will incur the costs of filing and suing and simply charge that against what is recovered. I do think that giving the collection agency a percentage (whatever amount) is generally a good idea as collection work is fairly difficult. Whatever amount the collection agency charges is usually a good deal because the alternative (most often) is that you get nothing. Collection agencies will take their pay from what they recover so that you are not paying them directly.
Michael K. E. Thiele
www.ottawalawyers.com
And, yes, you can sue for the damage and loss of rental income due to the unit having to be repaired/renovated.
DeleteMichael,
ReplyDeleteLandlord able to sue past tenants for: harassment, obstruction to entry, damage to items, wall, intimidation, health, safety issues; if unable to rent it out for month/two? Is it worth it to go to small claims order/hire a collection agency?
Appreciate your pro bono helpful approach!
Thomas
Hi Thomas:
DeleteThat's an interesting question. Unfortunately, the answer is not a "yes" nor a "no". Whether you can sue is contextual. Further, you raise a number of different things you might want to sue for. The "damage to items" is an easy yes. You may certainly sue a former tenant for damage to the property that you discover after they move out. Before they move out you would want to do the equivalent of suing at the Landlord and Tenant Board for the damage (+eviction). "Harassment" is vague. Also, was the harassment after the tenant vacated or before. Certainly the concept of harassment is understood at the LTB. In the civil context (i.e. Court), I'd be inclined to search for more recognizable causes of action--things that the Court recognizes as the basis for a lawsuit. "Obstruction to entry", again it depends on what you mean. If you are talking about a refusal arising from a lawful right to enter under section 26/27 of the Residential Tenancies Act then I doubt that a Court would entertain that claim. I think the remedy for such a refusal arises under the RTA and if the tenant is still in possession then go with an N5. This issue often arises when landlord's are upset about a refusal to allow a unit to be shown for the purposes of sale or re-rental. I've heard the threat many times but have never seen the full arguments made. In my view, the right to enter under section 27 (Entry with Notice) is not an absolute right. It is a right that is contextual to the circumstances and can not be looked at in isolation to the tenant's rights.
"Intimidation" can mean an awful lot. Yes, it can be actionable on the far end fo the scale. But if you are talking about intimidation arising from "not being nice" or being a foul mouthed nasty person--then "no". In my view, "intimidation" becomes actionable when you are talking about behaviour that is criminal. Short of that, I'd have to know the exact nature of what it alleged to be convinced that it is possible.
Health and Safety issues is too broad to comment on. Some things that fall under this category will clearly be violation of other statutes---for instance damaging or removing a smoke detector. Without details it is hard to comment but I imagine that what you are talking about will be a violation of certain statutes already (so actionable) or will amount to vandalism and destruction of property. Those things could indeed be the basis of a claim in court for the damages arising from the actions (i.e. replacement of damaged things).
I get asked the question about whether it is worth it to go to Small Claims Court often. Most of the time, after discussing the situation with the client, the answer turns out to be "no, it's not worth it". Small Claims Court involves spending time and money chasing a tenant who is no longer in possession. Tenants who have caused significant damage or who give you a reason to sue them tend to be the type of tenants who are judgment proof (meaning you will never recover anyway even if you get a judgment). Enforcement of Judgments is not done by the Courts. You have to find the tenants who've moved, sue them, go through a process that can take a year or more, get your Judgment and then enforce it using the tools of the Small Claims Court. Those tools (garnishment, debtors examination, writ of seizure and sale, etc.), cost money to use and a fair amount of time. There is no guarantee that they will work. If you hire someone to do pursue the debtor you will spend a lot of new good money without any guarantee as to outcome. Whether any of this is worth it really depends on the credit worthiness of your former tenants. If they have good jobs, assets, and "something to lose" then suing can be worthwhile. The fewer assets they have the more pointless it is to sue.
DeleteSome collection agencies will take on claims based on a percentage. This can be worthwhile, especially if you want to prove a point. If you have managed to get a Judgment at the LTB then pure enforcement is attractive for collection agencies as opposed to having to find them, sue, get a judgment and then enforce.
Lastly, for tenants who really have nothing or little to lose--if you spend the money and chase them and make life difficult through court processes like a debtor's examination the outcome I normally see is that they go to a trustee in bankruptcy and you, the creditor, end up with effectively nothing.
Good luck
Michael K.E. Thiele
www.ottawalawyers.com
Hi Michael,
ReplyDeleteMy landlord is a large corporation which has a history of making erroneous claims against tenants after they have moved out. The Better Business Bureau website is full of these sorts of complaints against them and I personally know of other tenants they have done this to - claimed the carpets weren't steam cleaned, wall were not painted etc and then got a bill for all sorts of things that are afoul of the tenants responsibility in the RTA.
I have strong reason to believe that this fate will befall me as well, as I am one of a dozen tenants left in a high rise that was converted from a rental building to a condo almost a decade ago. After converting our building to a condominium and selling off the tenant's units as they were vacated one by one, (some 60+ to date), they did major renovations to the building to be able to modernize it so that the could make it marketable sell off these units. This resulted in massive renovations totaling over $300,000.
After that they hit us remaining tenants with an above guideline increase (to subsidize the condo conversion!). We fought this at the LTB, but lost, only succeeding in getting the AGI increase knocked down from 9% to 4%.
So, long story short, they really have disdain for us now after having fought them at the LTB and also due to the fact that since we have "lifetime security of tenure", they cannot get rid of us. We are covered by rent control. (as such they cannot sell off our units as no one would buy them since the buyer can't evict us or raise rents to whatever they want)
Reading some of the complaints against our landlord, it seems they don't actually take most people to court, rather they make outrageous claims that the tenant is liable for hundreds or thousands of dollars to paint, clean, administrative costs etc and then sic a collection agent on the tenant and send a bad report to the credit bureaus, thus damaging the tenant's credit, out of pure malice.
(I know that my unit is in reasonable condition. I've lived in the unit for 12 yrs, the carpet was not cleaned when I moved in nor were the walls painted, yet everything is still in fairly decent condition. I also know from experience that they have gutted every unit vacated by tenants and sold them off as condo units.)
My questions are:
1) How could a tenant facing such a situation deal with this (beyond what you've suggested: taking move-out photos, videos, witnesses etc)? Is it easy to dispute a collection agency or the credit bureau in such a situation--do you need to file a court action to remove a bogus report in a credit bureau?
2) The bigger question: If in the weeks or months after having moved out the tenant starts getting collection calls/bills etc, can they file some sort of motion with the LTB to dispute this or perhaps create some sort of offset to use as leverage to get the landlord to drop these claims? (apparently tenants have up to 12 months to file with the LTB after having moved out)
(I write this because the thought of actually going to court isn't particularly troubling for a tenant who is pretty sure that they are leaving the unit in a reasonable state of "ordinary cleanliness", and can prove it. What is troubling though is that someone like my landlord can make a false report to a credit agency, knowing that they essentially have no liability in doing this, and that the cost and hassle for the tenant retaining legal help to resolve this is proximate to the costs of just paying the bill. So, really, an extortionate behavior)
Hi: That's an interesting dilemma and a sad comment on the ethics of your landlord. You've clearly taken note of my comments about collecting evidence and having the proof to refute allegations in the future. I'd be sure, as well, to have repeated invitations to the landlord for a move out inspection and a sign off prior to vacating the unit. Even if the only response is silence, this will help you in the future.
DeleteIf the landlord's tactics and strategy in chasing former tenants for bogus claims is as common as you indicate then you might consider something unusual. File a T2 application to the Board, prior to vacating, and get an Order from the Board establishing that you have no liability with respect to the condition of the unit. It will be tricky conceiving a basis for such a claim in the T2. However, I'd go with reason #3 and #4. The landlord's track record of false claims against all former tenants for bogus damages is the violation of #3 & #4 (reasons in the T2 application). You could ask for relief that the landlord be required to obtain Judgment against you before making any claim to a collection agency, order a pre-move out inspection on a specific date with written acknowledgment of the condition of the unit by the landlord to be provided prior to you vacating.
How this would "fly" I don't really know--but it would be fun to argue. If your fear of a bogus claim is well founded--then I have sympathy for the relief you are seeking. Also, the relief you are seeking is something the landlord should agree to anyway--so if they refuse--they are in an odd way confirming that they do the kind of things you are complaining about. Even if you are not successful in the T2 application the Board's decision would be an interesting one and likely useful if a bogus claim arrives after you vacate the unit. Combined with your evidence of the condition of the unit (and proof of ordinary cleanliness section 33 RTA), requests for inspection, and Board decision, you should be able to take the landlord to task.
There is a Government flyer on dealing with Collection Agencies and what they are allowed to do or not. You can require them to follow those rules and complain if they are not followed. This is outside the scope of this blog. If you'd like, search caselaw on www.canlii.org for the kinds of things that Court's order against Collection Agencies for illegal behaviour. Consider further whether you'd initiate a claim against the landlord for improperly sending a claim against you to a Collection Agency. If you have the time and creativity you can find a basis to challenge the improper behaviour of the landlord.
Good luck
Michael K. E. Thiele
www.otttawalawyers.com
Hi Michael,
ReplyDeleteIs it that easy though for a landlord to say you owe a debt (one which hasn't actually been substantiated in any way as being legit) and call up the credit bureau and put bad report in about you?
Hi Kevin: In my experience the risk of a claim actually making it onto a credit report etc., is low. Most landlords are not set up for reporting, are not credit bureau members and have no relationship with collection agencies who would take on the claim. Many cases simply end with demand letters that are sent and ignored. Then there are the landlords who do actively pursue rent arrears and damage claims. I haven't often seen slandered credit with unsubstantiated claims but I have frequently been consulted about letters from former landlords (via collection agencies) threatening it. I've also sued (successfully) a credit bureau and a landlord and the paralegal who caused the false reporting.
DeleteThe short answer is that in my experience is isn't easy or even common. However it is possible.
Michael K. E. Thiele
www.ottawalawyers.com
Michael,
ReplyDeleteIf tenants vacate without return of keys, access, box-key, is that actually theft?
Regards
Hi: This would be an easier question to answer if the Residential Tenancies Act (RTA) actually addressed the issue explicitly. My view is that retaining keys is not actually theft of those keys. The RTA contemplates that tenants might fail to return keys in that a landlord is permitted to charge a tenant a refundable key deposit (for cost of key). The right to charge this deposit is in O.Reg 516/06 section 17 (3). In this way, the RTA contemplates that tenants may be careless with keys or fail to return keys and this deposit is a way for landlords to protect themselves from these expenses.
DeleteMichael K. E. Thiele
www.ottawalawyers.com
Hi Michael.
ReplyDeleteIf searching for representative for landlord and tenant suit, is it recommended to negotiate hr rate, block rate or some hybrid rate; re: small claims court?
Best regards
Hi: My understanding of your question is that you are looking for representation in small claims court involving a landlord and tenant issue. The considerations for retaining representation in Small Claims are indeed different than for retaining representation at the Landlord and Tenant Board.
DeleteFor a claim in small claims you are suing for money. At the LTB it might be money, but it might also be for eviction or other non-monetary remedies. The importance of the remedy should inform the value of the claim and the amount of money/effort you want to put into the case.
In the Small Claims Court there is the possibility of winning some legal costs if you win the case. The Court will award up to 15% of the amount claimed in costs (plus disbursements plays possible double awards with offers to settle). Having the option of winning costs matters for deciding how much to pay in legal fees. At the LTB costs are uncommon and nominal if awarded (meaning legal fees are a sunk cost).
Other considerations include the location of the Court and the speed with which a case is heard and moved through the system. Often enough, when I'm discussing with a client the possible costs, the issue of adjournments and delays of just sitting around and waiting for your "turn" influences what I have to charge. The efficiency of your local Court will impact what you will be asked to pay.
Beyond that, the size of your claim and the likelihood of recovery also matters. You want to avoid throwing good money after bad if the chances of actually recovering are low. An hourly rate fee matters less if it is a sizeable claim (close to $25,000), you get costs, and you actually have the Judgment paid.
These factors and others are things that the lawyer or paralegal you are talking to should be able to address. Based on the specifics of your case, the likelihood of recovery, complexity, efficiency of the Court, the lawyer or paralegal can gauge the amount of time needed to take the case from beginning to end and based on that may be willing to offer a block fee, hourly, or hybrid of the two.
Good luck
Michael K. E. Thiele
www.ottawalawyers.com
Michael,
ReplyDeleteIf tenant steals landlord property, i.e. key, mail, mailbox key, fixture,
it can be reported to police? In instance, how can this unfold in reporting?
Cheers
Hi: Take a look at the answer from March 2, 2019. If you believe that you have been a victim of crime then by all means call the police and make a report. I'd be concerned about making reports involving petty amounts and for things that could easily be explained in a way that is non-criminal behaviour. You risk becoming a recognized nuisance and in time you're going to have a hard time being taken seriously by police, the Board, etc..
DeleteMichael K. E. Thiele
www.ottawalawyers.com
Michael,
ReplyDeleteIf you start an action in small claim, a year after tenant vacate the premise, is there any disadvantage to that start? If claim under 5k, advise best approach on asking collection agency/legal representation to assist, give a smaller amount?
Regards
Hi: I will comment on this question to the extent that it involves Residential Tenancies Act issues. There are other considerations in determining whether you wish to spend the time and money in litigation. Also, in Court (including the small claims court) costs are an issue (great if you win, not great if you lose). Costs are the expenses and legal fees that each side incurs in pursuing or defending a claim. The winner of the case is presumptively entitled to costs. In Small Claims Court the costs are capped (so not unlimited), but compared to the Landlord and Tenant Board costs are a big deal because at the Landlord and Tenant Board costs are rarely ordered and virtually always nominal.
DeleteYou indicate that the tenant is out of possession already for 1 year. Regardless of how long the tenant has been out of possession you are unable to issue an application against the tenant at the Landlord and Tenant Board as soon as the tenant is out of physical possession. If the tenant has moved out then the Board has no jurisdiction. There have been arguments that if a tenant still has the keys, still has some personal property in the space, hasn't informed the landlord of moving, that this constitutes continuing possession even if a moving truck was seen taking all of the tenants stuff out of the place and the tenant hasn't been seen since. The case law on this point concerns itself more with the question of physical possession as opposed to whether the tenancy is still ongoing notwithstanding that the tenant has vacated.
Based on this law, if you are going to pursue the tenant you will not be able to do so at the Ontario Landlord and Tenant Board.
Should you or shouldn't you? I can't comment on that. However, time is ticking and there are limitation periods. It is possible to lose the right to sue with the passage of time. If you're going to take action--don't wait. The passage of time is not your friend.
There does not seem to be anything significant about the $5K number. Sue for what you are owed. The Small Claims Court has a $25,000 jurisdiction meaning you can make claims for up to $25,000.
What is important is to think about what you can reasonably claim and what you have a chance of winning. Small Claims Court is somewhat unique in that costs (if you lose) can be calculated as a percentage of the amount claimed---for the defendant if you lose. If you win, the percentage of costs is calculated as a percentage of the amount you won (not the amount claimed). Hence, a more or less accurate claim amount is a good idea.
I can't comment at all about any specific collection agency. To get insight on how to proceed you should likely speak with a paralegal. Hire the paralegal to get the Judgment---and then decide whether you are going to try to enforce the Judgment with the help of the paralegal or whether you will turn over the collection work to a collection agency. Sometimes you can get a paralegal who focuses on collection work--in which case you have "both" services. In my experience, landlords who have simply turned over a claim without a Judgment or Order backing it up to a collection agency have had limited success.
Good luck
Michael K. E. Thiele
www.ottawalawyers.com
Great article and comments.
ReplyDeleteThank you.
Hi, I am a current home owner, I live beside a rental home; the tenants are being very disruptive, almost every day; people coming in/out at night, loud constant banging, stomping, screaming, yelling, and I am scared for my safety inside my home due to the loud bangs with brute force causing cracks in my unit; I am at the point of wanting to sell or contact the police; I’ve called bylaw but to no avail due to the tenants not being cooperative nor heeding any warnings. This is not everyday regular noise; there is no peace/enjoyment in my home; I do not know who the home owner is to contact them; could I perhaps contact the LTB and let them know? I am at a loss of what to do in this situation. Would you be able to give me some insight as to what I could do here? Thank you for your help
ReplyDeleteHi:
DeleteThis is a terrible problem to have and difficult to fix. For the purposes of this response I am going to presume that you live in a single family home or townhome/row house and that the neighbour lives in a separately titled home next to yours and this is not a condominium or co-operative housing.
The Ontario landlord and tenant board (LTB) is useless to you. The LTB has no jurisdiction to deal with, consider, or do anything about problems that neighbours have with tenants or the landlords of those tenants. Calling the LTB or trying to start some kind of legal proceeding there will be a pointless exercise.
The tenants next door are no different than an owner next door. You can regard them in this way. It is a little better that they are tenants because at least you can try to motivate the owner to evict them. It is more difficult to get an owner to change their own nuisance behaviour if it is the owner directly who is causing the problem.
As a starting point, I think you should be in touch with the owner of the property to alert them to the issue and advise that you will take legal action against the owner if the issues do not stop. The damage to your unit should be quantified and a demand for payment should also be made. These demands should be made by a lawyer or licensed paralegal.
Finding the owner's name is most easily done by completing a title search. Also, easily done by a lawyer or paralegal. You will have the name of the owner and likely an address for service in minutes. The cost is modest.
The response to your demand letter will be most revealing. If you get a sympathetic response with action being taken immediately--then there is hope for sanity on the horizon and perhaps good relations with the owner neighbour after the tenants are evicted. If the response is belligerent or indifference then you will need to consider actually suing the next door neighbour. You have a cause of action in tort (trespass and nuisance) and perhaps there is something in your title documents or other agreements if your houses are attached (which it sounds like they might be) for damage cause to the structure by one owner (or their tenants).
Aside from the legal route described above, you have the option of calling police and by-law and hope that tickets get issued and that behaviour is constrained by that. Most of the time, though, my experience is that police and by-law enforcement is ineffective (largely because the hooligan neighbours simply don't care).
Good luck with this problem.
Michael K. E. Thiele
www.ottawalawyers.com
Hi Michael, I enjoy reading your blog. Michael, my friend has a house in Toronto that he bought in 2015. He renovated the house and lived in it until 2022 before deciding to move and instead of selling, he rented out the entire house to one tenant. The previous owner was a senior who went to a nursing home and there was no kitchen or bathroom in the basement and no evidence that she had used the house as a rental. When my friend rented out his house in 2022 and it had not been rented before, is he under rent control?
ReplyDeleteThank you for this question. I fear you are looking for an answer that I can't give. For anyone else reading this question and answer the writer is asking about one of the partial exemptions under the RTA. That exemption pertains to rent control and is found in section 6.1 of the Residential Tenancies Act. A brief explanation of the law respecting rent increases. Rents in Ontario are subject to a bunch of specific Rules in the Residential Tenancies Act. The rules include how often rent may be increased, how it is done, what forms to use, and by HOW MUCH the rent may be increased. In Ontario, there is a hard cap to the amount that the Government can authorize the rent increase to be--and that is 2.5% The Government publishes a percentage, annually, for a percentage somewhere between 0% and 2.5% Landlords are then permitted to raise the rent by that amount if they follow the proper Rules for giving a Notice of Rent increase. Now, there is a partial exemption for this rent cap---the exemption allows for an unlimited increase in rent but still requires the other rules to be followed. That exemption is in section 6.1 of the Residential Tenancies Act. The wording of the section is awkward--so you should look at it specifically. But a fair description of the exemption--based on what the questioner is asking, is that certain of the rent rules (increase provisions especially) does not apply to a rental unit in a building of which no part was occupied for residential purposes on or before November 15, 2018. Presumably, in this question, the house is older than November 15, 2018 (i.e. built before), and at least a part of it was occupied before November 15, 2018. That the basement was remodeled etc., doesn't, in my view matter. This property is subject to rent control and the Annual Guideline Increase amount (i.e. a percentage up to 2.5% as published by the government annually).
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