Ontario Landlord Association (OLA): “Our biggest concern is if the emergency order will be extended again” says William Blake, a senior member of the Ontario Landlord Association (OLA) as he spoke with Milénio Stadium recently. Blake is concerned that the Ontario Government decides to extend the emergency stay at home order, they should be reminded that landlords are liable to pay mortgages, taxes and maintenance fees.
May 1st, 2021 is a pressing deadline for tenants and landlords alike, as the novel Coronavirus (Covid-19) keeps people at home and shutters businesses, leaving tens of thousands Canadians out of work. For his part, Blake, who owns small rental properties in Ontario, Alberta, British Columbia and Nova Scotia, informed Milénio Stadium that none of his tenants have refused to pay rent since the beginning of the pandemic. However, he realizes that some landlords haven’t had the same luck. The seismic increase of utility bills since more people are working from home leads OLA to underline that utility bills should always be in the name of the tenant, if at all possible.
Milénio Stadium: Ontario temporarily paused residential evictions. What does this mean for landlords?
William Blake: Owning a rental property in Ontario can be a very rewarding experience. If you are lucky enough, you can find a cash flow property, however nowadays because of the crisis, appreciation is happening in so many parts of Ontario, which has flooded the market of investors buying multiple properties, renting them out to eligible tenants and realizing wonderful appreciation. This emergency order is very similar to what we have in January 2021, it’s tough because evictions are still allowed, but you cannot enforce an eviction. Some tenants don’t pay for six months and in some cases 20 months. In simple terms, you’ve got an eviction order, but the eviction order can’t be executed. Our biggest concern is if the emergency stay-at-home order will be extended once again.
MS: Are all landlords considered wealthy individuals? Recognizing that they are responsible for paying mortgages, taxes and maintenance fees on their rental properties.
WB: Since 2020, at the beginning of the pandemic, the number of problems for landlords has skyrocketed. The Landlord and Tenant Board was closed for months and now we have other issues such as no enforcement for evictions. A significant amount of tenants within the past year have informed their landlords that they don’t have to pay rent. The Ontario Government declared, because of the pandemic, you don’t have to pay rent. It would be helpful if the government could reduce taxes, but there wasn’t any support. We asked Premier Doug Ford to give tenants a grant, so they could pay their landlord. In the province of British Columbia, they provided up to $500 in 2020 per month to pay their landlords, but Ontario didn’t follow suit. In my case, I had not one tenant who didn’t want to pay rent. Some could not pay the entire portion, so we established payment plans. They would pay a certain percentage at this date and then pay more when they got back to work. For example, I had a young couple at one of my properties that I personally manage in the GTA and he was a bartender, his girlfriend was a waitress at the same restaurant. The restaurant close and they didn’t have any income at all.
The good news for landlords in Ontario is that we have a growing population. If you are a professional landlord, ninety percent of the tenants are working well with you, but there is this group, at least ten percent, that if you rent to them, they can make the landlord life a living nightmare. What you have to do is find these great tenants, who respect your property and pay rent on time, a lot of landlords just simply do not screen properly. The way to make this work for both is to match up good landlords with good tenants. We need to check references, jobs and the most important thing, is to run a credit check. The OLA have partnered with a company called TRITON, they are the largest screening company in Canada, they perform credit and criminal checks for a standardized fee. They perform all the screening at McDonald’s, Bell Media, Uber, Province of Ontario, they are the go-to source employment checks. OLA started at the beginning of April 2021, this will assist our members to thoroughly check the background of prospective tenants. This is a great opportunity for small to medium sized landlords to have access to this TRITON service for less than $10.
MS: Since the pandemic began in March 2021, a significant number of people are working from home. Subsequently, utility bills (e.g. Hydro, Natural Gas, Water) have also increased. Who is now paying the difference? Is it the landlord or the tenant?
WB: The OLA recommends, if possible, make your tenants pay for the energy costs that they use. What we found is people who cover the utilities in the rent have seen an increase in the electric, water, natural gas, internet and waste bills. Some have doubled, tripled or, in some cases, even greater. Another thing that a lot of tenants are bringing in, is other tenants to live with them because people are losing jobs and they want to share the burden of rent. So, what happens is that the utilities costs have increased since they moved in. If the tenants pay their own utilities, the landlord is protected, but if not, a lot of smaller landlords will suffer this new reality.
MS: What are the most common tenant abuses?
WB: The number one issue by far, is they decide that they don’t have to pay rent because it takes so long to get an eviction, in Ontario right now it is eight (8) or nine (9) months. Being a landlord can be a very rewarding experience and I encourage it. However, in Ontario being a landlord is a very complicated business and many new landlords are not aware of how complicated and challenging it can be for smaller landlords or being an investor in Ontario. This is why it is very important that Ontario landlords learn the rules, that is where the OLA can assist. For example, many new landlords are not aware that tenants can bring in guests in Ontario, which means you rent out your condominium to one to two people. Then you will have people moving in or coming in and saying they are guests, and it gets very complicated to actually stop them from doing this because the tenants have the legal right to have guests. Tenants are also allowed to have pets in Ontario. Even if you advertise no pets allowed or if you put it in your lease that no pets are allowed, the tenants can bring the pet in and if the pet harms the property or becomes a nuisance for other tenants, you cannot evict that person. Since we have a lot of newcomers, that have different rules in their countries, they are not aware that things are very different here and in many other jurisdictions from around the world.
MS: Would you say that now is a better time to rent than owning a property in Ontario?
WB: I would say owning a property is preferred due to the price appreciation. Number two: There are good tenants out there, if you are a careful landlord in your screening process, you can have a lot of success. You need to be extremely careful and treat it is as a true business venture, not merely a passive income.