A government-mandated rent freeze for 2021 and delays in Landlord and Tenant Board tribunal hearings since the beginning of the global pandemic — combined with a hot real estate market — has some landlords looking to walk away from the business.
Since last spring, the provincial government has passed two new bills which affect both landlords and tenants, said Rob Hilton, co-owner of A.G. Secure Property Management Inc., which manages close to 1,000 rental properties in Simcoe County.
Bill 184, which he noted was in the works prior to the pandemic, has attempted to level the playing field for both landlords and tenants, and include a new clause where landlords are required to compensate a tenant in a “no fault eviction."
“If I sell my house and the buyer wants to move in to it — and I need to kick you out — I now have to compensate you one month's rent,” said Hilton, adding a property renovation also falls under the same legislation.
“The legislation on that used to be six units or more, but now there’s compensation for less than six units," he added. "So if I want you to move out, I have to supply you with alternatives and if I can’t, then I have to provide you with compensation.”
For most landlords who are following the law, this change isn’t a big deal, Hilton said.
“The reality is, for my landlords, 99 per cent of them act above board and don’t play games so really it’s nothing. We would see it as a positive because those that are playing the games now have to compensate tenants for those games they’re playing," he said. "Personally, I don’t see a negative on it.”
This legislation also protects landlords, as it now allows them to go after tenants for unpaid utilities and damage up to one year after they move out. Previously, if a tenant has physically vacated a property and an application had not already been submitted with the Landlord-Tenant Board for damages landlords were forced to try to recoup the cost through small claims court.
The only legislation that was COVID-related, said Hilton, was the rent freeze and the hold that was put on evictions during provincial lockdowns.
“The sheriff stopped enforcing evictions so if you’re a landlord and trying to get a tenant out due to not paying rent, your chance to resolve the problem has been dramatically delayed,” he said. "What landlords are truly complaining about is the tribunal got put on hold as of March 2020, and now it takes six months to even get a hearing for someone who hasn’t paid rent.”
Pre-pandemic hearings typically occurred within 30 days of an application. Now, Hilton said, they can take up to six months, which for anyone attempting to sell their property is a real issue.
“Where they’re really getting screwed over is on this delay. I could show you 25 applications we have in front of the landlord-tenant board that were submitted from September 2020," he added. "It used to be I’d have stuff from February right now. So, if they’re behind, the only way we can legally get a tenant out is by going through the process, but that process is so slow right now that you’ve got landlords losing up to $20,000 before they’re able to get the tenant out.”
For landlords attempting to sell their property, this delay could result in the loss of a potential sale.
“If I have a person who has made an offer on my property and I’ve promised them they will have vacant occupancy… if the tenant fights me I need to go to the landlord tenant board and right now I am not going to get that hearing, based on current turnaround time, for several months due to the backlog of applications," Hilton said.
The biggest concern for landlords is the rent freeze that was implemented for 2021, he added.
“There’s been no legislation saying you can’t increase property taxes, insurance, of any of their operating costs, but you’ve told landlords their ability to generate that extra income to cover those costs is being blocked. A landlord is functionally falling behind,” Hilton said. “If you can’t increase rent and inflation is greater than that you are in trouble.”
According to a Feb. 8 notice on the Tribunals Ontario website, processing applications and issuing notification of a hearing is taking longer than usual. They are asking applicants to wait at least two months after filing to check on the status of their application.
