Page 1

regional edition

HAMILTON

The regional market perspective for the Hamilton rental housing industry

2019


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theANNUAL Hamilton – 1


FOREWORD

Produced by RHB Inc., creators of RHB Magazine, RHB TV, RHB Newsreel, Perpetual Media Group (PMG) and Boldtv, and in collaboration with the Canadian Federation of Apartment Associations (CFAA), theANNUAL delivers a complete market perspective for the rental housing industries of Ottawa, Hamilton, Waterloo and London. Developing a standalone resource guide with vital and practical information is never an easy undertaking. There are reasons why in-depth, analysis and forecasting aren’t done in this form and on this scale for our industry! Time, resources and industry knowledge are required to deliver a comprehensive report respecting individual regional apartment owners and managers while allowing them to respond to market needs, size and competition. What you’ll find in theANNUAL regional edition is: • The State of the Industry Report, an indepth look at the individual cities’ market conditions, based on CMHC and Stats Canada data. •

Realty Check, a look at multi-family sales and purchases in each of the four regional markets, with a special showcase of notable transactions and analysis from the National Apartment Team at Colliers International.

Association Report, from our partners at HDAA, LPMA, WRAMA and EOLO, an overview of what we need to know about each city and association. Neighbourhood Trends, information and stats you need to know showing what makes them hot! Legislation Report, the Cohen Highley team shares legal insight on four topics of significance.

Five Things You Should Know, some interesting tips and tools for managing the physical elements of your buildings.

The industry’s vetted report of the Top Ten, Owners, Managers and REITs for each area.

This has been a labour of love. As Canada’s national voice for the apartment industry, RHB Inc. prides itself on always delivering the latest news and information that help our industry maintain a competitive advantage. Therefore, we’d like to acknowledge the following people and companies for their help gathering the information and data which enabled us to deliver this comprehensive guide:

Co-Founder, Principal Marc Côté Co-Founder, Principal Juan Malvestitti Associate Publisher Debbie Dollar-Seldon Contributing Editor John Dickie, President CFAA Art Director Kyu Shim Director of Sales Nishant Rai Office Manager Geeta Lokhram

Subscriptions John Dickie, CFAA and EOLO; Arun Pathak, Hamilton District Apartment Association, (HDAA); Lisa Smith, London Property Management Association (LPMA); Andrew Macallum, Waterloo Region Apartment Association (WRAMA); and the Colliers International National Apartment Team, Joshua Perlstein (Hamilton), Curtis Darling (Waterloo), Emily McClelland (Ottawa) and Lisa Lansink (London). RHB Inc. accepts responsibility for accurately delivering relevant news to the rental housing industry. As well, we always want to hear from you, the people who make up the rental housing industry. Let us know your thoughts on what you’ve read and what you’d want to see next year in theANNUAL, both at the National and Regional levels. All the best, Debbie Dollar-Seldon Associate Publisher

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Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher. P.O. Box 696, Maple, ON L6A 1S7 416-236-7473 Produced in Canada All contents copyright © RHB Inc. Canadian Publications Mail Product

INC.

Welcome to the 2019 regional edition of theANNUAL. Not unlike our National edition, theANNUAL regional edition is a special industry specific periodical, delivering relevant, timely information and data with a single-minded approach: “What does the Apartment industry need to know!” With that as our goal, our research team reviewed extensive data from numerous sources to bring you the regional editions of theANNUAL. From CMHC, Stats Canada, association executives, Government sources and apartment owners, managers & REITs, we bring you the most complete and thorough industry guide that delivers regional specific information and data.

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TABLE OF CONTENTS

2 – FOREWORD

STATE OF THE INDUSTRY – 8

15 – REALTY CHECK

ASSOCIATION REPORT – 21

4 – theANNUAL Hamilton


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TABLE OF CONTENTS 29 – NEIGHBOURHOOD TRENDS

TOP 10 – 35

47 – RENTAL LEGISLATION

5 THINGS YOU SHOULD KNOW – 55

6 – theANNUAL Hamilton


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Ancaster, Dundas, Flamborough & Glanbrook 4

AVR: 3.0% | 2BR: $1203

5

1

2 3

AVR: 3.1% 2BR: $1122

Stoney Creek and Grimsby

AVR: 6.5%

AVR: 4.1

2BR: $865

2BR: $1044

Mountain

Hamilton Zone Statistics 1. Downtown Core: AVR: 2.9% | 2BR: $1091 2. Central East: AVR: 4.0% | 2BR: $966 3. East End: AVR: 4.2% | 2BR: $1054 4. Central: AVR: 5.2% | 2BR: $1071

AVR= Average Vacancy Rate at October 2018 2BR= Average Rent of 2 Bedroom Suite

5. West End: AVR: 2.5% | 2BR: $1152

HAMILTON’S

universe of SENIOR’S residency spaces 8 – theANNUAL Hamilton

7%

TOTAL: 3487

15%

78%

Standard: 2721 Non-Standard: 235 Unknown: 531


23.9% Hamilton’s housing units are

APARTMENTS

12.9% Hamilton’s housing units are

PART OF A CONDOMINIUM

AVERAGE NUMBER OF 25-44 YEAR OLDS EMPLOYED

200000

average household income after taxes

50000 0

Oct 2016 to Sept 2017

$80,008

100000

Oct 2015 to Sept 2016

150000

theANNUAL Hamilton – 9


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State of the Industry Hamilton (CMA)

Immigrant demographic includes:

Immigrant

24.1% Non-permanent resident- 1.0%

Non-immigrant

74.9%

Guelph Info

Bach

1 Bdrm

2 Bdrm

3 Bdrm +

Survey Date

10/17

10/18

10/17

10/18

10/17

10/18

10/17

10/18

Average Vacancy

N/A

5.6%

1.3%

1.6%

1.0%

1.2%

3.0%

0.5%

Average Rent

$751

$775

$980

$1,034

$1,124

$1,157

$1,200

$1,264

Guelph 2-Bedroom Rent vs Mortgage Carrying Costs

2500

2000

Mortgage

1500

Rent

1000

500

‘10

‘11

‘12

‘13

‘14

‘15

‘16

theANNUAL Hamilton – 11


Ancaster/ Dundas/ Flamborough/ Glanbrook

Info Survey Date

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

N/A

2.6%

2.9%

1.3%

3.2%

N/A

N/A

Average Rent

$666

$692

$985

$1,039

$1,101

$1,203

N/A

N/A

Survey Date

12 – theANNUAL Hamilton

3 Bedrooms +

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

N/A

2.0%

2.4%

2.0%

2.7%

N/A

N/A

Average Rent

$699

$772

$859

$927

$1,075

$1,091

$1,305

$1,490

Survey Date

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

N/A

0.8%

5.0%

1.2%

3.7%

N/A

5.5%

Average Rent

$693

$885

$877

$923

$1,078

$1,054

$1,216

$1,249

Survey Date

Bachelor Oct-17

Oct-18

1 Bedroom

2 Bedrooms

3 Bedrooms + Oct-17

Oct-17

Oct-18

Oct-17

Oct-18

Oct-18

Average Vacancy

N/A

N/A

N/A

3.8%

0.8%

3.9%

N/A

N/A

Average Rent

N/A

$771

$763

$865

$911

$1,044

$1,172

$1,179

Survey Date

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

N/A

N/A

2.7%

3.6%

3.5%

N/A

N/A

Average Rent

$579

$629

$809

$864

$1,059

$1,071

$1,232

$1,274

Survey Date

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

N/A

4.9%

2.5%

1.8%

N/A

N/A

N/A

Average Rent

$536

$565

$733

$787

$869

$966

$958

$1,022

Survey Date

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

6.3%

0.9%

2.7%

2.2%

3.2%

0.0%

4.2%

Average Rent

$637

$761

$841

$947

$978

$1,122

$1,039

$1,217

Info West End

2 Bedroom

N/A

Info Mountain

1 Bedroom

Oct-17

Info Hamilton Central East

Bachelor

Average Vacancy

Info Hamilton Central

3 Bedrooms +

Oct-17

Info Stoney Creek & Grimsby

2 Bedroom

Oct-18

Info East End

1 Bedroom

Oct-17

Info Downtown Core

Bachelor

Survey Date

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

0.0%

N/A

1.8%

2.1%

0.9%

2.3%

1.5%

3.4%

Average Rent

$671

$858

$897

$965

$1,095

$1,152

$1,287

$1,376


Additional areas with HDAA Membership

Mississauga City

Niagara Falls

Oakville

St. Catharines

Burlington

Brantford

Vacancy Rate 2017: 0.9% 2018: 0.8%

Vacancy Rate 2017: 2.2% 2018: 3.8%

Vacancy Rate 2017: 1.0% 2018: 1.3%

Vacancy Rate 2017: 1.1% 2018: 2.2%

Vacancy Rate 2017: 1.4% 2018: 1.8%

Vacancy Rate 2017: 1.3% 2018: 1.5%

Average Rent 2017: $1,268 2018: $1,338

Average Rent 2017: $921 2018: $953

Average Rent 2017: $1,394 2018: $1,460

Average Rent 2017: $982 2018: $1,036

Average Rent 2017: $1,351 2018: $1,383

Average Rent 2017: $938 2018: $971

Important things to know about the population •

15% of Brantford’s households are immigrant households

24.7% of Oakville households include at least one senior

828,854 people live in Mississauga

20.8% of Burlington’s households have at least 1 child under 18

Interesting multi-residential housing stock statistics •

15.4% of Brantford’s housing structures are apartments

Only 4% of housing starts in St. Catharines are for rentals

Average value of an owner-occupied high rise condo unit in Oakville is $300,923

27.5% of condominium units in Peel Region are rented as of 2017

There have been 154 apartment completions in Burlington in the 12 months to June 2018

theANNUAL Hamilton – 13


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Realty Check

The transactions of note in:

Hamilton & Surrounding Areas

theANNUAL Hamilton – 15


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Ville St-Laurent, Quebec

Halifax, Nova Scotia


Realty Check Hamilton Multifamily property investors have seen substantial gains in the Greater Golden Horseshoe area, with a weighted average price per suite of over $125,000 in 2018. Demand for multifamily properties will continue to remain strong, as the rising costs of home ownership are forcing tenants to remain in rental housing for longer periods. Millennials represent 28% of Hamilton’s population – the highest compared to other cities in Ontario. With those who grew up in Hamilton now choosing to stay, the city is in the midst of a development boom, with the downtown core experiencing a surge in high and mid-rise proposals. The Fall 2018 CMHC report noted that apartment vacancy rates in Hamilton stood at 3.1%, up from 2.3%

in 2017. With the condominium rental vacancy rate hovering below 1%, we believe these numbers will decline in 2019 as a result of strong population growth and an increase in student renters. Professionally managed properties featuring renovated suites and on-site amenities will have the easiest time filling vacancy, as millennials continue to realize the barriers to home ownership. As the Hamilton real estate market continues to surge, the further compression of cap rates and an increase in suite prices is expected. Joshua Perlstein Sales Representative National Apartment Team Colliers International

Summary Table Weighted Avg $/Unit

Highest $/Unit

Lowest $/Unit

Highrise Cap Rate Range

2018 Vacancy Rate

$125,479

$200,000

$66,667

3.50-4.25%

3.10%

*Price per unit and cap rates derived from Realnet and Colliers Research, Vacancy Rates are from the fall 2018 CMHC Rental Market Report *Price per unit encompasses all 2018 multifamily property sales, excluding retirement and student residences

132 Gailmont Dr / 2547 King St E Purchaser: 2647160 Ontario Inc. Stories: 3 Units: 103 Price/Unit: $23,932

Sold at

$12,765,000

theANNUAL Hamilton – 17


Realty Check 2-4 Edith Crt Purchaser: Eurostone Properties Inc. Stories: 6 Units: 93 Price/Unit: $125,000

508 Mohawk Rd E

Purchaser: Oz Property Management Stories: 6 Units: 46 Price/Unit: $188,106

Sold at

$11,625,000

Sold at

$8,650,000

1170 Fennell Ave E

Sold at

$7,875,000 Purchaser: InterRent REIT Stories: 5 Units: 63 Price/Unit: $125,000

1083 Main St E

Purchaser: Malleum Core Partners Stories: 3 Units: 52 Price/Unit: $118,846

Sold at

$6,180,000

92 Robinson St

Purchaser: 92 RS Inc. Stories: 9 Units: 41 Price/Unit: $135,244

18 – theANNUAL Hamilton

Sold at

$5,545,000


Recent Realty Transactions 100 Sherman Ave S / 715 Main St E Purchaser: Searock Investments Ltd Stories: 3.5 Units: 31 Price/Unit: $107,581

Sold at

$3,335,000

7 Osler Crt

Purchaser: Jerry Celenza Stories: 3.5 Units: 21 Price/Unit: $130,952

827 Main St E

Purchaser: Enrich Hamilton Inc Stories: 3 Units: 8 Price/Unit: $200,000

Sold at

$2,750,000

Sold at

$1,600,000

1980 King St E Purchaser: C Valery Construction Ltd Stories: 3 Units: 11 Price/Unit: $125,000

Sold at

$1,375,000

theANNUAL Hamilton – 19


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Association Report

theANNUAL Hamilton – 21


Association Report

Last year’s Association report talked about Hamilton’s challenges when dealing with the City’s national attention and renewed interest in its growth. This year, we are still facing challenges, but remain one of the top cities to invest in and we continue to identify ourselves as a City to “Work, Play & Live” in. Rental owners are seeing an increase in applications from GTA commuters and an ongoing rise in immigrants and international students. The transportation improvements, health care reputation and employment opportunities have all contributed to Hamilton’s appeal.

22 – theANNUAL Hamilton


More people want to live an urban life with access to Hamilton’s trendy places to shop and work. The impact of this is finding housing for all the new residents who wish to call Hamilton home. Not everyone is interested in owning a home and the “renter” stigma is disappearing as the mindset is more transient in nature with the wish for freedom to travel now rather than later in life. Others find the new mortgage stress test too challenging, as it requires people to qualify at 2 per cent higher than their contracted rate. This reduces mortgage credit availability which makes people rent for longer, which in turn increases demand for rental units. Many Hamiltonians are also facing increases in their rent due to much needed repairs and improvements at many of the older buildings in the City. Existing tenants are staying put instead of paying more to move. All these factors have set off a domino effect of low supply, low turnover, and higher rents. So much so that the rental market is now seeing bidding wars. Some renters are putting together detailed packages for potential landlords to see how great a tenant they are. Unfortunately, there have been examples of increases in the “evictions game” by bad landlords who wish to profit during this housing crisis. Fortunately, there are more “good” landlords who instead focus on customer satisfaction and resident retention. The best of us try hard to ensure our tenants have safe, affordable and attractive homes. Sometimes that means substantial capital expenditures to keep them viable for the future, which the tenants feel as an increase in the form of an AGI (above guideline increase). These rental increases are hard for tenants to understand and, in some cases, afford. This has prompted the desire for a request that the City help pay for the tenants to fight against the housing provider’s application for an AGI. However, it is essential for Hamilton to preserve its rental housing stock. If we do not encourage companies to improve their buildings, they will continue to deteriorate and need to be

demolished and replaced by condos, causing more stress on the affordability of rental housing. To improve housing affordability, HDAA submitted our position paper to the provincial government this year, which covered our core priorities of creating a climate for new supply and improving existing stock. Some of our ideas are:

Maintain vacancy decontrol – Without vacancy decontrol, the industry would have no confidence in growth and the rental housing stock would deteriorate. Units would not be improved on turnover and the housing stock would deteriorate over time. Adjust the annual rent increase guideline - The 2019 guideline is 1.8%. The previous government also placed a hard cap at 2.5%, even if inflation exceeds that level. The guideline should be increased to accommodate inflationary and other cost pressures. The consumer price index is not an accurate measurement of the costs associated with housing. A more accurate calculation would focus on costs associated with building operations which would consider the higher costs of taxes, hydro, gas, insurance, labour etc. We need to acknowledge and adjust for the fact that maintenance costs increase as buildings age.

Support housing benefits – The issue of affordable housing is as much about income as it is about the level of rents. Financial support programs that help tenants in their daily lives are important to address affordability. Financial support programs allow tenants to pay for the housing they need, which will draw out more rental supply. The Government should support measures such as shelter allowances, portable housing benefits and income support programs.

Municipal red tape – The need for more supply is greatly hindered by hurdles developers must go through. There is a large pushback against gentrification in Hamilton, as well as the threat of rental housing licensing. Other obstacles like the City’s building requirements (which are stricter

theANNUAL Hamilton – 23


Association Report than the Ontario Building Code) prevent the increase of supply.

Licensing – There is enough protection for tenants in the provincial legislation and municipal bylaws. The Province should take away the municipalities’ right to bring in landlord licencing, as it is a redundant program that will increase costs without improving housing.

Transition out rent control – Economic theory states that rent control does not work in the long term. The Government should work towards eliminating it altogether over time. An idea to start moving away from rent control would be to allow units that are above a certain rent level to be exempt from rent control. People paying high rents in luxury apartments do not need the protection provided by rent control.

Multi-residential tax rate – In many municipalities, the tax rate for multi-residential buildings is more than double the rate homeowners pay. The provincial guideline is for the multi-residential tax rate to be between 1 and 1.1 times the residential rate; however most municipalities have ignored this. HDAA suggests the provincial government mandate the equalization of the tax rates. This will reduce rents drastically and in some municipalities over 10%.

Cannabis cultivation – Ban home cultivation in rental properties as enabled by the new federal legislation, which permits up to four plants per residence. Provinces across Canada have taken steps to outright ban or allow landlords to ban home cultivation (Quebec, Saskatchewan, Manitoba and British Columbia). The intense smell, potential damage from mold, increase in electricity use and enforcement challenges due to RTA restrictions on access all cause major issues not only for landlords but also for other tenants. Sub-metering – Allow sub-metering of electrically heated buildings to align with other sources of heat (e.g. gas). Sub-metering can improve the energy efficiency of rental housing

24 – theANNUAL Hamilton

as tenants typically consume 30-60% less hydro when they are responsible for their own bills. With an estimated 150,000 electrically heated suites in the province, Ontario would be poised to save over one billion kWh/year.

Bring back damage deposits – Currently, there are no damage deposits, so there is no incentive for a tenant to take care of a property. If the government brings back damage deposits, it will force tenants to be more aware of the responsibility they have to not damage the property they are renting.

Support transparency of orders – Court Orders are public documents. At one time this included the orders of the Landlord and Tenant Board. Bringing back access to this information will greatly improve the housing providers’ ability to protect themselves from professional tenants who abuse the system. It would also enable rental providers to screen our disruptive potential tenants, to protect the reasonable enjoyment of existing tenants. To protect individual privacy, we suggest restricting access to this information to be available through licensed/regulated agencies only.

Improve the ability to enforce evictions – Broaden the ability for other officers, such as off-duty or retired police officers, to enforce eviction orders. The current law allows only onduty sheriffs to evict tenants when the LTB orders an eviction for matters such as non-payment. This poses capacity challenges. The government started a review into civil enforcement following media stories of unlawful tenant behaviour and hurdles for lawful evictions, but it has yet to implement any changes. The new government should proceed with changes.

Make the Provincial lease enforceable – Currently, if a tenant skips out, a rental provider cannot charge them for the notice period or vacancy period; therefore, the lease has no real meaning. Other aspects of the lease are often not uniformly enforced by adjudicators. There are many examples of this including tenant insurance,


theANNUAL Hamilton – 25


Association Report parking, and other rules enacted by the housing providers for everyone’s benefit.

Staffing & file processing – Immediately address the shortage of adjudicators & staff at the LTB. Adjudicators are currently overscheduled to the extent that some do not have time to write the orders they have ruled on in a timely manner. In addition, some adjudicators are being forced not to proceed with scheduled hearings because their appointments have expired, and no notification of renewal has been provided to them. There is also a growing backlog of files that the LTB staff are not able to process in a timely manner. Professional tenants take advantage of this fact, enabling them to prolong the time they stay in a unit without paying rent. This tactic has become common knowledge and more tenants are taking advantage of an overburdened system.

Ensure all adjudicators are unbiased and consistent in their rulings – The bias of the person hearing a case can greatly affect the results. There does not seem to be consistency in rulings by adjudicators. Many times, a housing provider will have the same case being heard and depending on who hears it, there is a different ruling. There are too many times the ruling is not fair and instead is heavily favoured to the tenant. The rules regarding the stay of an order should be tightened up to eliminate the current abuses that are taking place.

Ensure government funded legal clinics are not supporting illegal activities or rent strikes – Rental housing providers want to maintain positive relations with their tenants but often external groups (i.e. professional activists) come into buildings they don’t reside in and increase the level of hostility. There are some concerns of alignment between employees of publicly funded legal clinics and the broader social activism community. The government should ensure taxpayer dollars are not used to increase tension between rental housing providers and tenants.

Streamline the Landlord and Tenant Board Process – Proceed with changes to expedite the 26 – theANNUAL Hamilton

Landlord Tenant Board (LTB) processes to benefit both landlords and tenants. • Default Orders: Bringing back default orders would ensure only those who truly need to be in front of an adjudicator are being heard and when there is no dispute an automatic order is issued which frees up the wait time. • Disclose disputes prior to hearing: In our legal system, defendants are required to fully disclose their dispute with the application. That is not currently the case with the LTB. Many times, tenants are instructed right before the hearing (by the free legal aid) that they can bring up deficiencies in order to get an adjournment or rent abatement. Advanced disclosure would speed up the hearing process. • Tenant application for hearing: Tenants should be required to file their own application if they have issues with the housing provider instead of withholding rent – forcing the housing provider to be the one to apply to the LTB for the hearing. • Payment of rent into LTB: Another practice that should be re-introduced is the requirement for the tenant to pay the LTB their rent while cases are being dealt with. This ensures payment once the case is settled and encourages good faith. There have been many cases where a professional tenant creates a fictitious dispute in order to stretch out the length of time they can stay in a unit without paying rent. It then becomes difficult to recoup the disputed rent once the tenant is evicted. The HDAA feels it is imperative for the future of the Province and the rental housing industry for there to be fairness in the system and recognition of the economic realities of this industry. We feel following these suggestions will be a step in the right direction to ensure the industry thrives and provides housing that is safe and affordable for tenants, while also allowing a reasonable return for investors in the industry.


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Neighbourhood Trends Latest information on some of HDAA’s many neighbourhoods in…

Burlington

Hamilton

Brantford

theANNUAL Hamilton – 29


Neighbourhood Trends

22%

747,545

of rental households are maintained by people over 65

14.6% of rental households are couples with children

Hamilton population Hamilton’s rental household income distribution 30000

Median rental household income before taxes…

30 – theANNUAL Hamilton

$100K +

0

$80K – $99,999

5000

$40K – $59,999

10000

Less than $20k

15000

$20K – $39,999

20000

$60K – $79,999

25000

$33,847

22.9% of rental households include at least one senior


Hamilton NUMBERS ARE THE TOTAL OF STARTS (ACTUAL), UNDER CONSTRUCTION, AND COMPLETIONS IN 2018 ACROSS ALL INTENDED MARKETS (* INDICATES 2019 NUMBERS)

STARTS (ACTUAL) Hamilton Downtown Core

Stoney Creek and Grimsby

54

apartments

177

row houses

440

apartments

UNDER CONSTRUCTION

Stoney Creek and Grimsby

598

row houses*

895

apartments*

COMPLETION

128

row houses

Ancaster/Dundas/ Flamborough/Glanbrook

theANNUAL Hamilton – 31


Neighbourhood Trends

183,314 Burlington population 97,496 Brantford population

21.9%

of rental households in Burlington are childless

Burlington (left) & Brantford (right) rental income distribution

es ax

2,165 – Less than $20 ,0 0 4,195 – $ 0b 20,0 ef 00 or -$ 39 e ,99 3,370 t – $4 9 0,0 b ef 00 -$ 59 ,0 00 e or

re fo be

s xe ta

$100k + before taxes $80k – $99,999k before taxes

es tax

1,655 $100k+ before taxes

32 – theANNUAL Hamilton

r fo be 99k e 59,9 or $40k – $ ef b ta 9k re 9, 9 9 fo be 20k an $ Less th

1,215 $80k – $99,999k before taxes

$60k – $79,999 before taxes

3 $20k – $

2,125 $60k – $79,999k before taxes

23.2%

e

ta

xe

s

xe

s

ta

xe

s

of Brantford’s rental households include at least one senior


Burlington & Brantford NUMBERS ARE THE TOTAL OF STARTS (ACTUAL), UNDER CONSTRUCTION, AND COMPLETIONS IN 2018 ACROSS ALL INTENDED MARKETS (* INDICATES 2019 NUMBERS)

STARTS (ACTUAL) Burlington Southwest

Burlington East 143 apartments

61 apartments

Brantford West

Brant

4 row houses

62 row houses

Burlington Southwest

Burlington East

UNDER CONSTRUCTION

143 apartments*

643 apartments* Brantford West

Brant

234 row houses*

COMPLETION Burlington East

93 row houses*

154

apartments*

Brant

Brantford West

9

row houses

108

row houses

theANNUAL Hamilton – 33


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Top 10 Hamilton’s top ten private landlords by size

theANNUAL Hamilton – 35


Top 10

Owners, Managers & REITs

Effort Trust

Category:

Owner

Number of suites

Website:

effortrentals.com

9326

Skyline Group of Companies

36 – theANNUAL Hamilton

Category:

REIT

Number of suites

Website:

skylineonline.ca

2698


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theANNUAL Hamilton – 37


Top 10

Owners, Managers & REITs

Homestead Category:

Owner

Number of suites

Website:

homestead.ca

2565

EIWO Canadian Management

38 – theANNUAL Hamilton

Category:

Manager

Number of suites

Website:

eiwocanadian.com

2000


“Through my capacity as Realty Asset Manager for the City of Surrey, I have contracted the services of Canadian Tenant Inspection Services Ltd for the last 10 years. CTI Services has looked after the inspection services for our rental portfolio. I have had no concerns when dealing with CTI Services during our contractual arrangement and know that any request will be completed in a prompt professional manner. In summary, based on the level of service CTI Services has provided for me, I would have no concerns recommending them for inspection services.” –Ken Woodward, Realty Asset Manager, City of Surrey

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(778) 846-9125 theANNUAL Hamilton – 39 www.ctiservices.ca


Top 10

Owners, Managers & REITs

Starlight Investments Category:

Owner

Number of suites

Website:

starlightinvest.com

1935

The DMS Group Category:

Manager

Number of suites

Website:

dmsproperty.com

1615

Victoria Park Community Homes Category:

Manager

Number of suites

Website:

vpch.com

1559

40 – theANNUAL Hamilton


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Top 10

Owners, Managers & REITs

QResidential Category:

Owner

Number of suites

Website:

qresidential.ca

1476

East Hamilton Kiwanis Homes Category:

Owner

Number of suites

Website:

kiwanishomes.ca

1250

Valery Homes

42 – theANNUAL Hamilton

Category:

Manager

Number of suites

Website:

valeryhomes.com

1100


theANNUAL Hamilton – 43


44 – theANNUAL Hamilton

Honourable Mentions

Realstar Management

Firm Capital

CLV

Bentall Kennedy

Smar Holdings

Skyview

Golden Equity

Central Erin Property Management

Parente Construction

Sifton Properties Limited

Pulis Investments

Wilstar

Timbercreek Asset Management

Owners, Managers & REITs


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Rental Legislation

theANNUAL Hamilton – 47


Rental Legislation FOREWORD Knowing and understanding the laws that govern us is essential to working in the rental housing industry. While staying up-to-date is important, understanding and interpreting legislation can make the difference in your success and profitability. Last year, we reached out to Cohen Highley, one of Ontario’s premier legal resources for residential landlords and property managers, for any new legislation and updates for the rental housing industry. This year, we did the same thing. In the following pages, Cohen Highley’s Joe Hoffer, Kristin Ley and Laura Gilthero, detail and analyse everything from the challenges of online packages, fire code violations, privacy issues and harassment of your staff. theAnnual is pleased to be able to bring you their perspective and we hope you’re able to implement the legislation to the betterment of your tenants, staff and business.

LOBBY CRUSH A recent CTV article discussed the special challenges faced by residential landlords arising from the substantial increase in on-line shopping and package deliveries to apartment complexes. The author of the article, Katherine Roth of the Associated Press, writes: “For apartment dwellers – and the managers of the buildings they live in – it’s tough to manage the boxes and items that pile up, sometimes clogging precious space for days.” The article details the problems and the use of third-party service and storage options that can be accessed by landlords and tenants to meet the challenges. The article itself was published June 25 and can be accessed at the following link: https://www.ctvnews.ca/lifestyle/lobbycrush-online-shopping-leads-to-mountains-ofboxes-1.4482284 Predictably, managing the challenges of off-site package delivery through a third-party service will come at a cost, often to both landlords and tenants. It is also a non-starter for the landlord to have to assume responsibility for accepting and managing delivery of parcels on-site, as there are liability risks and costs associated with that. While using thirdparty options, as suggested in the article, may solve the problems for landlords, there is one potential solution, not referenced in the article, which may be implemented by landlords in Ontario (and some

48 – theANNUAL Hamilton

other Provinces) that can result in additional rental revenue. Under the Residential Tenancies Act, Ontario (RTA), a landlord and a tenant can agree to a rent increase in exchange for the landlord providing a “prescribed” service (s. 123 RTA). “Lockers or other storage space” is a prescribed service under the regulations to the RTA. A landlord who makes a parcel storage service available to tenants may therefore charge for the service, thereby meeting the challenge of managing parcel deliveries while also increasing the “rent” that may be charged to that tenant. To introduce the prescribed service to current tenants, a space will be needed in which a system can be implemented to allow access to delivery services and tenants. Any agreement with the tenant for the rent increase in exchange for the storage and pickup service should include language to limit liability of the landlord and to limit the size, weight and nature of the items suitable for delivery to the on-site storage facility. Tenants who do not wish to use the service may be informed that their deliveries will not be accepted or administered by the landlord and that deliveries to the building will be at the tenants’ risk. The administration and other logistics of a parcel delivery, storage and pick up service (access by various delivery services such as UPS, Amazon, Canada Post, etc. and access by tenants) can all be managed through technology and some practical


“Under the Residential Tenancies Act, Ontario (RTA), a landlord and a tenant can agree to a rent increase in exchange for the landlord providing a “prescribed” service (s. 123 RTA).” innovation and there are many options available to landlords. The article referenced above cites “Amazon Locker”, “Apartment Locker” and “Luxer One”, among others, as third-party storage and delivery services which are currently available. In the case of Luxer One, it claims to have established 3500 locations in place within just a few years. Landlords who recognize they have the space and the administrative capacity to implement an onsite storage service will be in a position to increase revenue and meet tenant service demands. With new tenancies, the additional service can be listed as an “up sell” available, in addition to the basic rent. With existing tenancies, if tenants agree to pay for the service and enter into a s. 123 RTA agreement for that service, the payment becomes an added component of rent and is therefore subject to annual rent increases on the total sum of rent otherwise payable. The agreements, once implemented, cannot be unilaterally terminated by one party, but if both parties agree to terminate, the rent may then be reduced based on the original amount paid by the tenant plus any Guideline increases that may have been taken during the life of the agreement. The amount that the landlord may charge for the service is loosely governed by regulations to the RTA but is ultimately determined by what the “market will bear”. Most large operators of multi-res buildings will readily recognize that there is a demand for a process in their buildings whereby on-line delivery services can drop off packages; where those packages can be securely stored; and where the packages can be accessed by tenants. Landlords will also recognize the value of meeting tenant demand while also increasing rental revenue and eliminating the need for the landlord to manage, store and distribute packages free of charge (or prohibit deliveries altogether). The key factors in successfully implementing an on-site, revenue generating solution are to create the physical and

administrative model and to then ensure that the s. 123 agreement meets the legal criteria for RTA compliance.

LANDLORDS PAY FOR TENANTS’ FIRE CODE VIOLATIONS A landlord in Waterloo was ordered by a municipal fire inspector to replace all smoke detectors in the bedrooms of his apartment building with heat detectors. While it is unconventional to install interconnected smoke detectors within bedrooms, the landlord intended to provide a higher level of fire safety in the apartment building than that required by the Fire Code. The landlord prohibited smoking in the rental units, but in direct contravention of their lease agreements, tenants were smoking in the bedrooms. Because smoke detectors were installed in the bedrooms, the tenants’ activity triggered regular false alarms. To avoid false alarms, the tenants were then taking increasingly extreme measures to disable the smoke detection system. While there was some dispute about how the fire inspector ended up carrying out an inspection at the property, an inspection did take place and resulted in the order for the replacement of the smoke detectors. The Fire Safety Commission, on appeal, accepted the evidence of the fire inspector that people tend to grow complacent about fire safety in the face of frequent false alarms and that such complacency extends beyond those triggering the false alarms to tenants through the entire building. The Commission also accepted that frequent false alarms make people more inclined to tamper with fire safety systems. As a result, the Commission agreed it was necessary in the interests of fire safety for the smoke detectors to be replaced. See Gondosch v. Waterloo Fire Rescue, 2016 CanLII 102465 (ON FSC).

theANNUAL Hamilton – 49


Rental Legislation “The Personal Information Protection and Electronic Documents Act (“PIPEDA”) governs the ways in which landlords collect, use and disclose tenants’ personal information.” In light of this decision, landlords are reminded of their ability (and obligation, in some cases) to terminate a tenancy under the Residential Tenancies Act for interference with the landlord’s lawful right and interest (N5); impaired safety (N7); and illegal acts (N6), all of which could have applied in this case. Had the landlords acted promptly in addressing the tenants’ behaviour, the costs of replacing the fire safety equipment may have been avoided. If you have a situation where tenants are engaging in the type of behaviour described above, consider the findings of the Commission in this case and act promptly to stop the behaviour or end the tenancy before the tenants’ liability becomes your own.

WHEN POLICE REQUEST A TENANT’S PERSONAL INFORMATION The Personal Information Protection and Electronic Documents Act (“PIPEDA”) governs the ways in which landlords collect, use and disclose tenants’ personal information. For the purposes of PIPEDA, personal information means any information about an identifiable individual, such as a tenant’s address, phone number, name, income information, etc. Landlords often collect, use and disclose this type of information to administer leases and to carry out their obligations in the course of the landlordtenant relationship. In general, PIPEDA requires that landlords obtain the consent of tenants in order to collect, use and disclose their personal information for these or any other purposes. However, it is not uncommon for landlords to receive requests from the police for production of a tenant’s personal information without the tenant’s consent. When faced with these requests, landlords should be aware of the limited instances under PIPEDA when disclosure of a tenant’s personal information to police, without the tenant’s consent, would be lawful.

50 – theANNUAL Hamilton

Section 7(3) of PIPEDA sets out the circumstances in which a landlord may disclose a tenant’s personal information without his or her knowledge or consent. Generally, section 7(3) provides that when faced with a police request for disclosure of a tenant’s personal information without the tenant’s consent, landlords have two options to make a lawful disclosure; otherwise, landlords may face liability for breaches of PIPEDA: Option 1: Landlords are able to lawfully disclose a tenant’s personal information to the police, without the tenant’s consent, if the police have provided the landlord with a subpoena, warrant, or order compelling production of the information. Landlords should retain a copy of any such document to show due diligence. Option 2: If the police do not have a subpoena, warrant or court order, landlords are able to lawfully disclose a tenant’s personal information if the police provide the landlord with the following three items: 1) A written request for the information 2)  Written documentation identifying their “lawful authority” to obtain the information. In considering whether a law enforcement authority has identified its “lawful authority” under this option, the Supreme Court of Canada has been clear that “lawful authority” requires more than just a request by law enforcement, and rather requires law enforcement to provide their specific, legal authority to request the information, otherwise landlords should insist that a subpoena, warrant, or order is obtained. 3)  Written documentation indicating for which of the following four purposes the information is being requested:


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Rental Legislation i. The police suspect that the information relates to national security, the defence of Canada or the conduct of international affairs; ii.  The disclosure is requested for the purpose of enforcing any law of Canada, a province or a foreign jurisdiction, carrying out an investigation relating to the enforcement of any such law or gathering intelligence for the purpose of enforcing any such law; iii.  The disclosure is requested for the purpose of administering any law of Canada or a province; or, iv.  The disclosure is requested for the purpose of communicating with the next of kin or authorized representative of an injured, ill or deceased individual. As noted above, if a landlord is unable to satisfy the criteria of either Option 1 or Option 2, landlords should refuse the request for disclosure and document the reasons for doing so. Otherwise, landlords may find themselves offside of PIPEDA’s requirements.

HERE’S WHAT YOU CAN DO IF TENANTS HARASS YOUR ON-SITE STAFF Most landlords and on-site staff have probably encountered the “difficult” tenant who uses verbal abuse, personal attacks, threats, and intimidation (“harassment”) as a means of getting what they want. Some Landlord and Tenant Board decisions and some employer landlords have sometimes downplayed the seriousness of a situation where a tenant engages in harassment of landlord employees. The message is that accepting tenant harassment of landlord employees is “just part of the job”, but it isn’t, and employment law takes this kind of harassment seriously. Landlords have a legal obligation to take steps (including potentially seeking the eviction of the tenant) to ensure that such harassment stops. What does the law require? There are two statutes that are most relevant to the legal obligations imposed on landlords to prevent tenant harassment of their staff, namely the Occupational Health and

52 – theANNUAL Hamilton

Safety Act (OHSA) and the Residential Tenancies Act (RTA). The OHSA requires that employers prepare a written harassment policy and a workplace harassment implementation program to address workplace harassment. A landlord who employs more than 5 persons is required to post that written policy in the workplace, but regardless of the number of employees, having the harassment policy is mandatory. For many landlord employees, the “workplace” is, or includes, the apartment building where they work: cleaners, building managers/administration, and maintenance personnel are all entitled to a workplace environment that is free from harassment from tenants, members of their household, and guests. The OHSA imposes a positive obligation on the landlord/employer to take measures to curb tenant harassment and a landlord who fails to do so invites prosecution and liability under the OHSA. In summary, tenants who harass employees of a landlord trigger a landlord’s potential liability under the OHSA and thereby interfere with the landlord’s “legal interest” to maintain a harassment-free workplace. Section 36 of the RTA confirms that harassment of landlords (which includes employees) by a tenant is conduct which interferes with a landlord’s legal interest. Section 36 RTA states: “A tenant shall not harass, obstruct, coerce, threaten or interfere with a landlord”. A breach of this section of the RTA by a tenant properly gives rise to service of an N5 Notice of Termination on the grounds of “interference with the landlord’s legal interest”. As a landlord, what should you do when you are faced with allegations that a tenant has harassed an employee? The OHSA requires that an employer have, in its harassment implementation program, measures and procedures for workers to report incidents of workplace harassment to the employer or supervisor and a process for how the employer will investigate and deal with incidents and complaints of workplace harassment. So, make


“Most landlords and on-site staff have probably encountered the “difficult” tenant who uses verbal abuse, personal attacks, threats, and intimidation (“harassment”) as a means of getting what they want.”

sure that you have the required policies in place and that what you are dealing with is harassment. The regulations to the OHSA define “workplace harassment” as a person “…engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome”. The language is very broad and open to subjective interpretation. A tenant asking that maintenance be done, and following up again and again, is not harassment.  A tenant engages in harassment by making repeated, derogatory, personal comments directed at the employee and/or to other tenants about the conduct, dress, ethnicity or work ethic of a superintendent; or, engaging in “bullying”, by threatening the landlord’s employee with loss of employment or through verbal abuse directed at the employee. By ensuring that the Workplace Harassment Policy and your Implementation Program include policies to address harassment of employees by tenants, and having reasonable steps in place to address such harassment, landlords can effectively deal with abusive tenants. Usual protocols involve recording the complaint, investigating the complaint, and a progressive approach to ensuring that the harassment stops. In terms of the “progressive approach”, the first step is to make the tenant aware of the offensive conduct alleged to have occurred and give the tenant an opportunity to respond and/or stop the conduct complained of. If the harassment continues (and it often does) then the next step is to serve an N5, pointing out the tenant’s breach of s. 36 of the RTA and the interference with the landlord’s legal interest under the OHSA to ensure that the workplace be free from harassment. If the tenant stops the behavior, the N5 is “void”, but if the behavior continues in the 7 days

following service of the N5, or if the first N5 is “void” due to compliance but a second N5 is served on the same tenant within 6 months of the first N5, then an application may be made to the Board for eviction. Remember, the names, times, and full details of the conduct complained of must be set out in the N5 or the notice, or any application based on it, will be dismissed due to vagueness. The Board always has an overriding discretion to refuse to grant an eviction on the basis that the tenant’s conduct is not “serious” or that it would not be unfair to refuse the eviction. In the past, there were instances where the Board did not consider tenant abuse of landlord staff to be particularly serious but the OHSA obligations to create a harassment-free workplace are a powerful aid to establishing the legislature’s acknowledgement that harassment, even by tenants, is “serious” and that no worker, even a landlord employee, should have to accept exposure to such harassment. Assistance in developing general harassment policies is available from the OHSA website and through enrollment in FRPO’s Certified Rental Building Program (CRB). In tailoring the policies to deal specifically with tenant/resident behaviors, it is prudent to obtain legal advice and training from someone familiar with OHSA harassment policy drafting, implementation, and training. Special care should be taken when dealing with individuals who attribute the manifestation of their abusive conduct to a disability, in which case special rules and policies under the Human Rights Code may apply. A link to the OHSA site is: http://www.labour.gov.on.ca/english/hs/pubs/wpvh/ harassment

theANNUAL Hamilton – 53


YOUR ONE STOP

SOURCE

54 – theANNUAL Hamilton


5 things you should know What building owners and property managers should know about repairs – Page 56 – By McIntosh Perry

How to identify issues with your parking lot – Page 57 – By Lincoln Construction Group

5 tips for maintaining good tenant relationships – Page 58 – By A.P. Reid Insurance

Best practices for on-site interaction with property managers and residents – Page 59-60 – By Wyse Meter Solutions

theANNUAL Hamilton – 55


5 things you should know What building owners and property managers should know about repairs – By McIntosh Perry Any repair to a building, major or minor, raises anxiety for tenants, owners and managers alike. Here are some points everyone should know to stay ALERT:

1

2

3

Act Fast: Most repairs, especially parking garages and balconies, aren’t anything you want to rush through or save for later. The cost of repairing problems gets higher if you leave them, but it’s more about protecting the safety of your tenants and staff. Look Alive: Always be on the look out for damage, cracks, wear and tear, etc. Once damage is spotted, it’s time to act. Expert Assessment: The first step when you notice damage is to get an assessment from a qualified engineer/building science specialist who can determine the condition and the extent of the issue. The next step is to work with a specialist to develop a schedule of repairs and then begin to tender the work with a trusted contractor.

56 – theANNUAL Hamilton

4

5

Rally Everyone: Repairs can be noisy and disruptive. It’s essential to prepare impacted tenants well before the crews show up and work with your project partners to alleviate any resident or staff concerns. Keep up the communication – this will help keeping the work on schedule and manage expectations Take The Time: The best approach is to monitor the condition of your building regularly through in-house and periodic independent evaluations. When it’s time to do a repair, the path to a successful project will be much smoother if you’ve already laid the groundwork.


How to identify issues with your parking lot – By Lincoln Construction Group When Does a Parking Lot Need Repair? As we all know, the Canadian climate can be erratic with constant weather fluctuations creating potential maintenance issues when it comes to our parking lots. Ensuring proper maintenance can be difficult and confusing if you are not sure where to start. Here are 5 Things that can help you better understand your parking lot!

1 Cracking:

4

Whether it’s shrinkage, alligatoring, widening, or cracking edges, any kind of cracking can be harmful to your parking lot. Even the smallest cracks left unattended can allow water to penetrate the surface of your parking lot and compromise your subbase.

2

3

5

Potholes: Potholes are the result of water damage and consistent wear. If cracking is left unattended the water that penetrates those cracks will erode the foundation underneath which, along with consistent wear, will cause your surface asphalt to crumble, resulting in a pothole.

Catch basins: Cracking and alligatoring asphalt around your catch basin are potential warnings of issues at the subbase level. In this case a profession contractor should be called to inspect the catch basins to ensure the concrete modulocs are not broken or a pipe is not damaged. Weather fluctuations: Our fluctuating and turbulent Canadian climate unfortunately allows for variability with the structural components of our parking lots, leaving a lot of room for change throughout the year. Occasional maintenance checks will save you time and money!

Faded line markings:  Faded line marks are a problem that shouldn’t be taken lightly. Line marking is the only way vehicles and pedestrians know how to maneuver around your parking lot. If the lines begin to fade, they should be redrawn as soon as possible.

theANNUAL Hamilton – 57


5 things you should know 5 tips for maintaining good tenant relationships – By A.P. Reid Insurance

1

2

3

Take care of your property: Taking measures to properly maintain the premises proves that you take your role as building manager seriously and it encourages them to take pride in the condition of their rented spaces. Maintain accurate records: Along with establishing a procedure for dealing with tenant and maintenance requests, establish a system for documenting these requests and any further communication between you and tenants. Take proper security measures: Although you may not be expected to guarantee the safety of tenants, visitors and guests, you must exercise reasonable care to protect them from foreseeable events.

58 – theANNUAL Hamilton

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Resolve issues immediately: When receiving a tenant or maintenance request, it is best to resolve the issue within two to three business days, and to fix the problem properly the first time. Delayed action about an issue may seem unnecessary to tenants, and it could cause distrust and anger to fester. Transfer risk: Even with a positive landlord-tenant relationship, there are potential exposures that must be addressed with welldesigned property and liability insurance policies. Coverages to think about include buildings insurance, contents insurance, emergency assistance and accidental damage insurance.


Best practices for on-site interaction with property managers and residents – By Wyse Meter Solutions 1 Know your audience: Each property site has a different management style, and may have varying social environments. You might be entering a new building with calm tenants, or an existing building with some historical challenges. Whichever the case, your presence there is meant to be an informative source, acting as a facilitator for both management and tenants. The ability to remain calm and diplomatic will be very beneficial in this role.

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2 Know your stats: It is a valuable practice to study and make note of all billing, deposits, account numbers and management information before meeting with respective on-site staff and residents. Being prepared for all meetings and any potential inquires that might arise will assure your customers of your thorough knowledge base and expertise. Your confidence in handling all situations will also hinge upon knowing these statistics inside and out. Contact your head office billing team if you are missing any vital statistics or information.

3 Always be prompt and reliable: Respect goes both ways. The best way to create a positive first impression and develop a mutually respectful ongoing relationship is to be punctual and reliable. Always arrive on time and assure the on-site staff is expecting you. Particularly for utility suppliers, billing and utilities are not the on-site staff’s expertise, so management will be happy to have your assistance with what can often be timeconsuming administrative tasks.

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5 things you should know Best practices for on-site interaction with property managers and residents – By Wyse Meter Solutions 4 Ask for help:

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Don’t be afraid to ask questions, particularly if you are entering a new client relationship or environment. The property management staff will know information about the building you may not. (Such as the number of suites, beds, turnover rate etc.) Asking these questions shows your genuine attention and care for their specific building needs.

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Follow-up: Just as you would after any sales meeting or interview, show your care and respect with a follow up email the day of or the following day thanking clients and residents for their time and providing a general recap of your meeting. This ensures that the valuable information you’ve provided has been received both verbally and in writing. It also ensures that all parties have your contact information should they have follow-up questions or the need to schedule another on-site visit.

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Profile for Juan  Malvestitti

theANNUAL Hamilton 2019  

theANNUAL, theANNUAL Hamilton, Hamilton, HDAA

theANNUAL Hamilton 2019  

theANNUAL, theANNUAL Hamilton, Hamilton, HDAA

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