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regional edition

LONDON

The regional market perspective for the London rental housing industry

2019


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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.

2 – theANNUAL London

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: 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

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

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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.

Co-Founder, Principal Marc Côté

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TABLE OF CONTENTS 2 – FOREWORD

STATE OF THE INDUSTRY – 8

15 – REALTY CHECK

ASSOCIATION REPORT – 21

4 – theANNUAL London


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TABLE OF CONTENTS

29 – NEIGHBOURHOOD TRENDS

TOP 10 – 35

47 – RENTAL LEGISLATION

5 THINGS YOU SHOULD KNOW – 55

6 – theANNUAL London


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Brooke, Warwick & Metcalfe*

Thames Central Middlesex Centre* AVR: 1.5% 2BR: $901

AVR: 1.5% 2BR: $901

4

3

2 8

1 6

5

AVR: 3.2% 2BR: $826

AVR: 2.3% 2BR: $1077

AVR: 1.5% 2BR: $773

London South Strathroy-Caradoc

Southwold* AVR: 1.5% 2BR: $901

London Zone Statistics

9

Central Elgin* AVR: 1.5% 2BR: $901

1. Downtown North: AVR: 1.8% 2BR: $1334 2. Northeast: AVR: 4.0% 2BR: $884 3. North London: AVR: 1.6% 2BR: $1221 4. Northwest London: AVR: 1.2% 2BR: $1196 5. Southwest London: AVR: 1.2% 2BR: $1099 6. Central South London: AVR: 2.5% 2BR: $1070 8. East London: AVR: 3.6% 2BR: $827 9. St. Thomas: AVR: 2.3% 2BR: $1006

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

*Average derived from calculating statistics of Brooke, Warick & Metcalfe, Middlesex Centre, Thames Central, Southwold and Central Elgin as a whole.

average rent in senior’s rental housing in 2017

AVERAGE RENT IN SENIOR’S RENTAL HOUSING (INCLUDING MEALS) IN 2018

8 – theANNUAL London

$3286

per month


64,980 rental households in London

45,193 apartment units in London

7,370 condominum units in London

FULL TIME EMPLOYMENT % CHANGE YTD 2017/16 BY AGE GROUP

15% 12% 9% 6%

$69,903

average household income after taxes

15-24

3% 0 -3%

25-44

Total

-6%

theANNUAL London theANNUAL London – 9– 9


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State of the Industry London (CMA)

LONDON’S Rental Market Universe 50000

40000

30000

20000

10000

0

45,193 – Apartments 3,880 – Townhouses 15,370 – Rented Houses, doubles, duplexes and accessory suites 2,090– Rented Condos

Student housing supply was up to 1242 beds

12,960

24.7%

London households include at least 1 senior

Immigrants landed in London between ‘11-’16

theANNUAL London – 11


State of the Industry Important things to know about London’s primary rental market

Important things to know about London’s secondary rental market

3,880 townhomes & 45,193 private apartment units as of October 2018

7403 condo units in 2017 and decreased to 7370 in 2018

21.8% of London’s condo units are in London South.

Most of the apartment buildings with 50-199 units are located in London Northwest.

15,370 rented houses, doubles, duplexes and accessory suites round out the secondary market.

The remainder of the London CMA

Middlesex Centre

Thames Central

Info

Central Elgin

Bachelor

1 Bedroom

Brooke, Warwick & Metcalfe 2 Bedroom

Southwold

3 Bedrooms +

Survey Date

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

1.3%

1.5%

Average Rent

$885

$901

12 – theANNUAL London


Info Downtown London

Survey Date

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

N/A

1.7%

1.5%

2.6%

2.1%

N/A

N/A

Average Rent

$613

$651

$926

$944

$1,364

$1,334

N/A

$1,269

Survey Date

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

N/A

N/A

3.3%

3.2%

3.6%

4.0%

0.0%

0.0%

Average Rent

$529

$577

$716

$742

$809

$827

$791

$872

Survey Date

StrathroyCaradoc

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

2.1%

4.0%

3.0%

3.9%

N/A

N/A

Average Rent

$589

$656

$731

$770

$842

$884

$1,029

$1,054

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Survey Date

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

1.2%

1.8%

1.1%

1.4%

0.9%

1.0%

0.9%

N/A

Average Rent

$800

$760

$917

$977

$1,108

$1,196

$1,243

$1,382

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

2.5%

3.1%

1.2%

1.4%

N/A

3.0%

Average Rent

$646

$656

$783

$799

$1,074

$1,070

$1,300

$1,363

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

1.3%

1.9%

2.0%

2.2%

N/A

5.5%

Average Rent

$682

$732

$811

$842

$1,057

$1,077

$1,127

$1,295

Bachelor

1 Bedroom

Survey Date

Oct-17

Oct-18

Average Vacancy

2.2%

0.0%

1.3%

1.0%

Average Rent

$667

$693

$858

$896

Bachelor

Oct-17

Oct-18

1 Bedroom

Survey Date

Oct-17

Oct-18

Average Vacancy

3.2%

0.0%

1.1%

1.8%

Average Rent

$739

$774

$917

$958

Info St. Thomas

3 Bedrooms +

Oct-18

Info North London

2 Bedroom

Oct-17

Info London Southwest

1 Bedroom

Oct-18

Info London South

Bachelor Oct-17

Info London South Central

3 Bedrooms +

Oct-18

Info London Northwest

2 Bedroom

Oct-17

Info London Northeast

1 Bedroom

Oct-18

Info London East

Bachelor Oct-17

Bachelor

Survey Date

Oct-17

Average Vacancy Average Rent

Info

Oct-17

Oct-18

1 Bedroom

Oct-18

Oct-17

Oct-18

0.0%

N/A

0.9%

3.8%

$484

$513

$687

$694

Bachelor

1 Bedroom

2 Bedroom

3 Bedrooms +

Oct-17

Oct-18

Oct-17

1.1%

1.3%

1.6%

$1,043 $1,099 $1,102

2 Bedroom Oct-18

Oct-17

1.4%

1.6&

1.9%

$1,174 $1,221 $1,539

Oct-17

1.5% $1,137

3 Bedrooms +

Oct-17

2 Bedroom

Oct-18

Oct-18

N/A $1,641

3 Bedrooms +

Oct-18

Oct-17

Oct-18

1.7%

1.8%

N/A

0.0%

$855

$1,006

N/A

N/A

2 Bedroom

3 Bedrooms +

Survey Date

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Oct-17

Oct-18

Average Vacancy

9.7%

N/A

N/A

N/A

2.3%

N/A

N/A

N/A

Average Rent

$579

N/A

$755

$781

$982

$826

$894

N/A

theANNUAL London – 13


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Realty Check

The transactions of note in:

London

London Surrounding areas Brooke, Warwick, Metcalfe Strathroy-Caradoc Middlesex Centre Thames Central Southwold St. Thomas Central Elgin

theANNUAL London – 15


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Ville St-Laurent, Quebec

Halifax, Nova Scotia


London

Realty Check Demand for multifamily assets remains strong in London and Southwestern Ontario, with the average price per suite up $3,000 year-over-year from 2017. With an increase in price per suite, cap rates have continued to compress, however, not as steeply as the 2014-2017 declines. As the desire for a buyer remains high to secure a relatively safe, cash flowing investment property, we believe cap rates will continue to compress in 2019. The majority of multifamily transactions in Southwestern Ontario were of buildings 12 suites or less, and roughly 1/3 of assets over 20 suites were transacted as part of a portfolio. According to the Fall 2018 CMHC

report, within the City of London, the overall vacancy rate increased 2.1% in 2018 and the average rent rose to $1,005 (up 5.3% from 2017). While “value-add” opportunities for investors have become harder to source, demand for stabilized, income producing properties continues to surge – leading to several new build properties seeing completion in London and Southwestern Ontario in 2018. Lisa Lansink Broker National Apartment Team Colliers International

Summary Table Weighted Avg $/Unit

Highest $/Unit

Lowest $/Unit

Highrise Cap Rate Range

2018 Vacancy Rate

$169,958

$271,429

$80,000

4.0-4.75%

2.10%

*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

1-9 Grosvenor St / 291-295 St George Purchaser: Homestead Land Holdings Ltd Stories: 3,8,14 Units: 375 Price/Unit: $228,042

Sold at

$85,515,800

theANNUAL London – 17


Realty Check 105-109 Grand Ave

Purchaser: Amiraco Properties Stories: 3 Units: 100 Price/Unit: $102,500

Sold at

$10,250,000

59 Ridout St S

Purchaser: Medallion Corp Stories: 3.5 Units: 76 Price/Unit: $111,842

160 Emery St W

Purchaser: 2606445 Ontario Inc Stories: 7 Units: 54 Price/Unit: $85,185

$4,600,000

Purchaser: 869797 Ontario Ltd Stories: 3.5 Units: 27 Price/Unit: $111,111

Purchaser: Regent Properties Stories: 3.5 Units: 23 Price/Unit: $108,000

18 – theANNUAL London

$8,500,000

Sold at

69 Grand Ave

324 Wortley Rd

Sold at

Sold at

$2,484,000

Sold at

$3,000,000


Recent Realty Transactions 129 John St

Purchaser: 129 John St Inc Stories: 2 Units: 19 Price/Unit: $123,684

196 Bruce St Purchaser: 196 Bruce St (London) Inc Stories: 2.5 Units: 7 Price/Unit: $271,429

$1,900,000

Purchaser: London Rental Suites Ltd Stories: 2.5 Units: 17 Price/Unit: $81,176

Purchaser: KNH Properties Ltd Stories: 2.5 Units: 15 Price/Unit: $80.000

$2,350,000

Sold at

390 Grey St

1284 Gramercy Park Pl

Sold at

Sold at

$1,380,000

Sold at

$1,200,000

theANNUAL London – 19


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Association Report

theANNUAL London – 21


Association Report

Introduction: LPMA is a non-profit organization that has been offering reliable information and mentoring to landlords since 1967. We educate our members and advocate on behalf of large and small landlords at the municipal and provincial levels on issues that affect the rental housing industry. While many of LPMA’s 600-plus members are large landlords, more than 70 per cent own and manage 10 or fewer residential units.

Our board is comprised of 16 volunteer directors and one full-time administrator who contribute a great deal of time individually and as a team to our members and to continually improving our organization. Other landlord associations view LPMA as a model and have asked us to lend our expertise to improve the way they operate. LPMA is one of the longest standing landlord associations not only in Ontario, but also in Canada. The organization was formed when LPMA’s founding members came together to share ideas and information on the price of electrical work and other services. As a result, large and small landlords learned about operating costs, dealing with tenants and

22 – theANNUAL London

addressing common issues in running their buildings. That sense of co-operation and desire to help other members continues to this day. LPMA member benefits: One of LPMA’s strengths is the willingness of our members to work together and share ideas. We hold monthly meetings from October to May in which we discuss important issues that arise at municipal meetings, alert members to changes that affect their businesses, and present guest speakers who address areas of interest to rental housing providers. Topics at recent meetings have included: the mandatory “standard lease” and what it means to members, fire code changes and how to deal with bedbugs. Members also benefit from access on our website to a list of tradespeople and service providers who are LPMA associate members, and they can find a wide range of other helpful information through links on our website. In addition, we are able to accept online payments for event registrations and for our legal forms. Education: LPMA’s strength lies in our mix of small and large landlords, and the exchange of information between the two — all for the price of a membership. There is an education component as part of each monthly meeting to foster best industry practices and risk


management. Special seminars are presented to members when major legislative changes, such as the introduction of the Rental Fairness Act and the Standard Lease Form, are introduced by the province. We also help support small landlords or those purchasing their first income property by staging Property Management 101 and 201, a series of informative seminars, in the fall. Speakers cover topics such as leasing, customer service, rent rules, and methods of dealing with problem tenants. Legal forms: LPMA has always led the industry in the development of rental applications, tenancy agreements and related leasing documents. Documents produced by LPMA have been used by large landlords and organizations such as the Federation of Rental-housing Providers of Ontario (FRPO), the Greater Toronto Apartment Association, and the Waterloo Landlord Association, and are particularly valuable for small landlords. Even though LPMA is a non-profit organization, we generate income from the sale and licensing of the legal forms to cover the cost of creating and producing the forms and administering their use by the industry. Editorial projects: LPMA’s goals include educating and informing small landlords. We wrote and published our own 16-page newsletters for more than 10 years and we currently contribute regularly to RHB Magazine’s Rental Association Voice. Through RHB, we are able to shine a light on our organization across the province. Trade show: LPMA hosts an annual trade show in April. It features 60 to 70 exhibitors who have information and services that are beneficial to the rental housing industry. Charitable activities: Our annual golf tournament, held in September, is our main fundraiser. Recipients of our donations have traditionally been housing-related and include St. Paul’s Social Services, My Sisters’ Place, Ronald McDonald House

Charities Southwestern Ontario, and Merrymount Family Support and Crisis Centre. At our annual Christmas party, we ask that members bring a toy for the Salvation Army’s toy drive. We also contribute to the province-wide Spring Hope Food Drive, held annually in April in apartment buildings across Ontario. Lobbying: As a powerful voice in London for rental housing, we have good working relationships with city officials, and fire and police services. We lobby the city over issues, such as landlord licensing, that affect small landlords. We also attend council meetings where new policies or bylaws that may adversely affect our members are on the agenda. Our goal is to watch for issues that may have an impact on landlords and how to represent their best interests. We are also an active member of FRPO and the Canadian Federation of Apartment Associations, and we support those organizations during policy discussions and decision-making.

LPMA’s Mission Statement LPMA’s purpose is to provide education that helps landlords operate their businesses professionally, mitigate risk, and attract and retain good tenants. Our membership rates are affordable and they include monthly meetings where landlords learn from expert speakers, share ideas and obtain advice from others in the industry. We offer useful tools, such as access to legal forms and credit checks through our website, as well as mentoring and advocacy by representing the interests of property owners and managers at the municipal, provincial and federal level. Our membership culture is inclusive and welcoming, and we encourage members to be open to tenants from all backgrounds. Above all, we aim to help members compete successfully in London’s highly competitive rental housing market.

Milestones Legislative input LPMA is known as an advocate for its members and for Ontario landlords. Lawyer Joe Hoffer was part of a legislative committee, along with fellow LPMA members Paul Cappa and Brenda Trineer, that made

theANNUAL London – 23


Association Report “LPMA lobbied for a change and as a result of that effort, the government put a freeze on the disparity between the residential and multi-residential rates.”

recommendations to the provincial government for two years in Toronto while the Tenant Protection Act was being drafted. They provided the government with the industry’s position and pointed out the practical implications of the implementation of the government’s policy.

put a freeze on the disparity between the residential and multi-residential rates. The freeze went into effect in 2001, which prevented municipalities from shifting the tax burden to multi-residential tenants.

Recent political issues Rent control Introduced in 1975, the legislation united LPMA members and encouraged them to work together. Because there was no provincial rental housing association at the time, LPMA helped to unite other associations in lobbying the government to make the laws fairer for all Ontario landlords. The current vacancy decontrol/recontrol system has been influenced by years of intensive lobbying and support by organizations such as LPMA. It allows landlords to set rents on vacant suites based on what the market will bear which, in turn, permits landlords to upgrade their suites and command higher rents for them. Even today, LPMA continues to educate its members about rent control legislation and to lobby the government on making it more equitable. Property tax LPMA was involved in trying to ease the gap in the property tax rate for single-family property owners and owners of multi-residential properties; the disparity was particularly unfair to London tenants who were being taxed at twice the rate of private homeowners. Because the government made it illegal for landlords to pass the increase to tenants as a separate charge, tenants had no idea their rent was climbing as a result of municipalities shifting more of the tax burden to them. LPMA lobbied for a change and, as a result of that effort, the government

24 – theANNUAL London

Standard lease When the province drafted its standard lease, LPMA suggested changes to streamline it and make it easier for landlords to complete while decreasing their chances of committing errors that could lead to more disagreements with tenants at the Landlord and Tenant Board. LPMA, through a 20-person committee, made four submissions in response to the drafts the province released. As a result of our recommendations, the province streamlined the document significantly and included details that assisted landlords. LPMA also pressed the province to allow landlords to include additional terms and conditions to reflect their specific operations and clientele. An LPMA committee compared the standard lease to its own lease, which lawyer Joe Hoffer originally drafted in the early 1990s, and created the permitted additional terms and conditions which incorporated crucial provisions that are not in the province’s standard lease. To further help landlords, LPMA retained IT specialists to make the standard lease and the terms and conditions available as a pdf or electronically. Tenants can sign the lease from their smart phones or tablets. LPMA licenses the standard lease and the terms and conditions as part of a 27-page package to other landlord associations for their members’ use. The documents that can be signed and completed electronically include the


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Association Report assignment and sublet forms, amended rental application, guarantee form and a two-page notice that landlords must give to tenants.

• London’s 2.1 per cent rental vacancy rate, according to Canada Mortgage and Housing Corp. (CMHC), is actually much lower for affordable units;

Landlord licensing

• An average home price of $415,000 is unattainable to those who seek affordable housing;

LPMA fought the attempt by some city council members to impose licensing fees on all rental properties. In challenging the issue, lawyer Joe Hoffer worked with legal counsel for the City of London, focusing on what the bylaw would mean to landlords who were required to pay a licensing fee to operate a rental property. The Residential Rental Units Licensing Bylaw was passed in 2009 but, because LPMA fought so hard, the city restricted the fees to properties with four or fewer units and converted dwellings. Unlike other municipalities, the city has kept the licence fee at a moderate level. Affordable housing London is experiencing a critical, worsening shortage of affordable housing, according to the 2018 Shareholder Update and Strategic Plan 2019-2023 that was presented to city council in late June by the Housing Development Corporation (HDC), an instrument of council. The HDC works with private developers, nonprofit housing organizations and others to create more affordable housing to address local needs. The plan outlines several interesting facts: • 40 per cent of Londoners rent and new rental stock is primarily higher-priced;

• The average available one-bedroom unit costs about $1,100 a month, whereas for someone in a retail/sales job earning $29,000 annually, affordable shelter costs would need to be less than $750 a month. According to CMHC, housing is considered affordable if it costs less than 30 per cent of a household’s before-tax income. Those adversely affected by the shortage of affordable housing include people who are employed in low- to moderate-income jobs; those who experience housing as a barrier to finding work; people who would like to move to London; those living in vulnerable situations without housing; and people who, without support, risk losing their homes. The city needs 3,000 new affordable housing units and, without them, more people will face rising housing costs and a lack of availability, waitlists for social housing will continue to grow, the local labour market will be adversely affected, and London’s housing affordability gap will continue to expand. “Creating 300 new units per year will help to close this gap,” the plan states.

• 14 per cent of Londoners are in core housing need, the fourth highest rate of housing need for CMAs across Canada;

Conclusion: One of LPMA’s strengths is to provide small and medium-sized landlords with the guidance of some of the best and most knowledgeable business leaders in the industry. We’ve never lost sight of the smaller landlord, even though the industry is driven by multi-residential high-rises. Because property management techniques are skills that individuals learn on their own, membership in an organization such as LPMA is vital to filling in the gaps in information and ensuring the professional management of operations.

26 – theANNUAL London


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Neighbourhood Trends The latest information in London’s many neighbourhoods

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Neighbourhood Trends

494,069 London’s total population 30 – theANNUAL London

206,450 total private households

74,280 rental households


Tenant Income distribution (before taxes) Less than $20,000 before taxes – 17,930 Less than $20 K bef ore t axe s $20K to $3 9,999 K be fore tax es $40K to $ 59,99 9K b efo re tax es $60K to $79, 999 Kb efo re ta xe s

$20,000 to $39,999 before taxes – 21,755 $40,000 to $59,999 before taxes – 12,820 $60,000 to $79,999 before taxes – 6,145 $80,000 to $99,999 before taxes – 3,295 $100,000 and over before taxes – 3,040

40.3% of rental households include at least 1 person with activity limitations

The age cohort most likely to rent is age

25-34

London population – by immigration status Immigrant demographic Includes:

Immigrant Non-permanent resident

22.1%

19.5%

1.6%

Non-immigrant

78.9%

of private rental households have at least 1 child under 18

theANNUAL London – 31


Neighbourhood Trends NEIGHBOURHOODS NEIGHBOURHOODS

32 – theANNUAL London

NEIGHBOURHOODS

STARTS (ACTUAL) COMPLETION

UNDER CONSTRUCTION

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

Byron & Riverbend

Hyde Park

Byron & Riverbend

East London

Strathroy-Caradoc

West London


TOTALS

Stoney Creek, Stoneybrook & Upland

Byron & Riverbend

38 row houses 115 apartments

Hyde Park

33 row houses

Stoney Creek, Stoneybrook & Upland

18 row houses 5 apartments

TOTALS

Stoney Creek, Stoneybrook & Upland

West London

Byron & Riverbend

61 row houses* 243 apartments*

Stoney Creek, Stoneybrook & Upland

144 row houses* 437 apartments*

East London

117 apartments*

West London

142 row houses* 182 apartments*

TOTALS Strathroy-Caradoc

Stoney Creek, Stoneybrook & Upland

Stoney Creek, Stoneybrook & Upland West London

13 row houses 31 apartments

44 row houses 61 apartments

42 row houses 165 apartments

theANNUAL London – 33


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Top 10

Owners, Managers & REITs

Drewlo Holdings

Category:

Owner

Number of suites

Website:

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4114

Homestead

36 – theANNUAL London

Category:

Owner

Number of suites

Website:

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2979


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Top 10

Owners, Managers & REITs

The Minto Group Category:

Owner

Number of suites

Website:

minto.com

2326

Boardwalk REIT

38 – theANNUAL London

Category:

REIT

Number of suites

Website:

bwalk.com

2210


“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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Top 10

Owners, Managers & REITs

CAPREIT

Category:

REIT

Number of suites

Website:

caprent.com

2102

Sifton Properties

Category:

Owner

Number of suites

Website:

sifton.com

1600

Timbercreek Asset Management

40 – theANNUAL London

Category:

REIT

Number of suites

Website:

timbercreek.com

1541


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Top 10

Owners, Managers & REITs

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Owner

Number of suites

Website:

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1513

Norquay PM

Category:

Manager

Number of suites

Website:

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1000

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Category:

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950


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Honourable Mentions

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Northview REIT

CLV

Berkshire

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Bradel Properties Ltd.

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Q Residential

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Rental Legislation

theANNUAL London – 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 London

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 London – 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 London

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 London

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 London – 53


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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

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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:

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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.

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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!

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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.

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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.

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

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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.

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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 Marc Cote

theANNUAL London 2019  

theANNUAL, theANNUAL London, London, LPMA

theANNUAL London 2019  

theANNUAL, theANNUAL London, London, LPMA

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