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Hot Topics: EOLO explains its recent submission to the City of Ottawa on the proposal for landlord licensing, including better alternatives to address the perceived problems driving the issue. pg. 45 HDAA reports on its meeting with Mayor Eisenberger, and presentations about planning law changes, cannabis, lending and living trusts, as well as how to simplify the life of a property manager. pg. 49 LPMA discusses its actions on recent proposed changes to the nuisance bylaw and the results so far, as well as the program supported by the annual LPMA golf tournament. pg.53 WRAMA explores the rental housing experience, from tenant to rental housing provider under the RTA, starting with the adventures of WRAMA President, Andrew Macallum. pg.57
The Member Associations
City of Ottawa studies landlord licensing By John Dickie, Chair, Eastern Ontario Landlord Organization As part of a broader review of the regulation of rental accommodations, the City of Ottawa has engaged a team of consultants to review the options for landlord licensing, for regulating Airbnb and similar platforms, and for continued or revised licensing for rooming houses. The consultants will report in August or September, and City staff will make recommendations for action by City Council in late 2019 or early 2020. EOLO is active in the consultation and in the consideration of landlord licensing, which we strenuously oppose. The following is a summary of the EOLO submission to the City’s consultant on rental housing regulations. In a nutshell, EOLO submits that landlord licensing would reduce the availability and affordability of rental accommodations, while having little, if any, positive effect on the quality of rental accommodations. EOLO’s submission began with a review of the effect of rooming house licensing. Then, we presented a detailed discussion of the arguments for licensing (expressed as the goals it seeks to achieve) and the counter-arguments (that licensing will not achieve those goals). We also presented alternative, better solutions to the perceived problems that proponents of landlord licensing seek to address.
Rooming houses – a case study in licensing Ottawa’s experience with licensing rental accommodations has largely been with the licensing of rooming houses. According to the consultant’s background report, the number of rooming houses has fallen from 400 in the 1990s to 192 in 2001, and to 91 today. Seemingly, the number of rooms has fallen by a similar amount. Since 2001, the main regulation issue has been licensing. Both the facts, and economic theory, strongly suggest that the fees, and other costs of licensing, have reduced rooming house supply.
The goal of licensing was to improve rooming house quality. The statistics on 311 service calls clearly show a few rooming houses with issues, and the bulk of licensed rooming houses with no significant issues (generally less than one service call per year). To quote the consultant, “The number of problematic rooming houses is in the minority compared to the total, and they continue to be problematic even once licensed.” The facts strongly suggest that rooming house licensing:
• Has reduced rooming house supply • Has not eliminated problems in the minority of rooming houses that are problematic
Based on those facts, EOLO submits that rooming house licensing should be reduced. To maintain the current rooming house supply, and to potentially increase that supply, rooming house licensing should be changed to a performance-based system, in which those rooming houses with minimal service calls are released from the licensing system.
Rental licensing According to its proponents, rental licensing has five goals. Each is addressed below.
Improving ineffective enforcement Licensing proponents believe that municipal landlord licensing is a way to address shortcomings in the existing municipal and governmental regulatory network. However, a licensing regime does not provide any substantive additional enforcement tools against noncompliance with by-laws. Will people who do not follow the existing bylaws follow a new licensing by-law? Since the best predictor of future behaviour is past behaviour, it is logical to assume that scofflaws who disregard the current by-laws will also disregard a new bylaw requiring licensing. In Ontario cities that have adopted landlord licensing, municipal staff reports indicate that apartment licensing has “evasion” rates of at least 35% and perhaps close to 50%. (Fenn, Residential Licensing Effectiveness Review, 2013, p. 10)
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A licensing regime does not provide any substantive additional enforcement tools to address noncompliance. Rather, a licensing regime creates new procedural offences, which would tend to take attention away from the substantive issues. Laws engender more respect and work better when they address what is bad in itself rather than what is bad because it is prohibited. Specifically, failing to do necessary repairs after appropriate notice is bad in itself, but operating without a license is only bad if it is prohibited. That means the courts will tend to impose only modest fines for operating without a license, and little moral blame attaches to such an offence. The real hammer in licensing is the threat to shut a rental operation down if the license is not granted or is withdrawn. However, in practice, the threat of shutting down rental accommodation, thus evicting innocent tenants for a landlord’s non-compliance with licensing requirements, would be difficult to carry through and would work against providing more and better rental housing, since the evicted tenants might well find themselves homeless. A more cost-effective solution, which does not bring with it the downsides of landlord licensing, would be more concerted action in addressing the limited number of problem addresses, up to and including prosecutions for substantive property standards violations. When the violations are the failure to repair properties after notice, then the City could have the work done, and add the cost to the property’s tax bill.
Gaining entry Some licensing proponents point to the challenges associated with gaining entry to rental units for the purpose of ensuring compliance with existing regulations. Licensing is suggested as a mechanism that would help to get around the existing restrictions on entry in statute law and common law. The underlying assumption is that access would be a precondition to licensing, where inspection is demanded or required. However, licensing would not alter the law governing access. It is only the need to have a license to continue to operate that leads to suggestions that voluntary compliance – by landlords, if not by tenants – would be easier to secure. Under the Residential Tenancies Act (RTA), a landlord can gain access to a rental unit by giving a 24 hour written notice of entry to determine the condition of the unit, and whether the unit complies with housing and maintenance standards. EOLO suggests that the City could enact a by-law requiring landlords to comply with a demand from a property standards officer (PSO) to give notice of entry and then to enter with the property standards inspector to determine the condition of the unit. Landlord licensing is not needed to obtain entry.
Financing more inspections Proponents of landlord licensing see it as a way of collecting money outside the property tax system to fund more property standards inspections. However, the experience of other Ontario municipalities suggests that with all-in costs, rental licensing is a break-even proposition at best, and then only if applied with high recurring fees, and light or very selective enforcement. (Fenn, p. 9)
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If indeed money is extracted from landlords to fund more property standards inspections, then that will tend to reduce rental supply and cause rents to rise to pay for those costs. That is the inevitable outcome of the economic forces that operate in a competitive market like rental housing. In fact, rents will rise more than the amount of the license and inspection fees. Rents will also rise because of the substantial internal costs of the work required to obtain the licenses, including collecting the paper required and the time and effort to schedule the licensing inspections.
Compensating for deficiencies in LTB enforcement Some tenant advocates have argued that the Landlord and Tenant Board (LTB) is ineffective in dealing with tenant complaints about maintenance, tenants’ rights, rent rebates, etc. They say the LTB is too expensive and complicated, and thus tenants cannot get the remedies they want or need. In fact, data from the LTB demonstrates that the LTB deals with a significant number of tenant-initiated cases relating to repair issues or complaints about landlord behaviour. In addition, licensing could lead to the building being shut down, forcing the tenants out, while denying them their recourse to rights under the RTA to remain as tenants. Consequently, tenants would be worse off with licensing. If there is a concern that some tenants do not know their rights under the RTA despite the LTB documentation and information services, then the cost-effective solution is to increase the City’s support for Action-Logement and Housing Help. If there is a concern that too many landlords do not know their obligations under the RTA, then the cost-effective solution is to support and encourage groups to provide more landlord education. EOLO already holds education meetings for our members. We are well placed to provide more education on landlord obligations (and also on tenant rights).
Helping fearful tenants enforce their rights Some tenant advocates say vulnerable and lowincome tenants are afraid to apply to the LTB
or to call property standards because they are afraid of retaliation from their landlord. However, the RTA gives tenants protections, and there are several support agencies for vulnerable or low-income tenants or for students. The experience of EOLO’s members and most other landlords is that tenants are not at all afraid to make requests and demands for repair work. Indeed, landlords find that numerous tenants make unreasonable requests with no fear at all. It is illogical to think that a tenant would fear the outcome of a maintenance complaint to property standards because the landlord could seek to evict the tenant at the LTB (despite the RTA protections), but the same tenant would not fear the outcome of a licensing investigation, which could lead to the building being shut down. A large part of what Action-Logement and Housing Help do with their current City funding is support vulnerable and low-income tenants. If there is concern that vulnerable tenants do not know their rights or are afraid of their landlords, the costeffective solution is for the City to provide (more) funding for Action-Logement and Housing Help, or to have those agencies direct more of their funding to address those perceived problems.
Other arguments against licensing EOLO also made the following arguments against landlord licensing:
• Licensing would reduce rental supply • Licensing would increase rents • The City would have liability exposure if a licensing regime is imposed
• Licensing misdirects attention from the real issues
See www.eolo.ca for the complete EOLO submission.
Conclusion EOLO submits that licensing should be relaxed on rooming houses, and that licensing should not be imposed on long-term rentals, since the concerns that are driving the demand for licensing can be addressed through less problematic and less expensive alternate approaches that do not risk reduced rental supply and higher rents. EOLO is in contact with the consultants, key City staff, the Mayor and City Council to oppose landlord licensing.
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President’s message HDAA has been busy working behind the scenes to build a stronger relationship with the City of Hamilton and reinforce the need to have rental housing providers and tenants work together to address housing issues. In a recent meeting with Mayor Fred Eisenberger, HDAA stressed the importance of consulting and working with rental housing providers when making decisions that affect the industry. A trial landlord licensing program is being looked at in September and some Councillors are pushing hard to implement it. Mayor Eisenberger said he will be asking staff about a more detailed review of how licensing is working in other cities, as well as how the recently implemented proactive enforcement regime is working in Hamilton. He is not 100% convinced that licensing will solve the real issues of unsafe housing but is not dismissing the idea outright. When we talked about the solution of supply, Mayor Eisenberger said the City is in the process of increasing supply with laneway housing, granny suites, and other programs to make it easier to create more units. We briefly talked about the need for a change of attitude toward rental housing providers and that a solution that works with them will be a longer lasting, more economically viable solution. We pointed out that it is counterproductive to have Councillors openly demonize rental housing providers. - Arun Pathak, President
Recent events May 8: Dinner meeting - Two guest speakers Edward John, Director of Housing Services for the City of Hamilton, discussed Hamilton’s approach to growth. He talked about the missing middle housing and Hamilton’s approach to creating more affordable housing. Hamilton is implementing a clear vision through providing missing form, affordability, and choice through “pre-zoning.” This strategy includes commercial mixed use, nodes and corridors, transit-oriented design – LRT, downtown secondary plan, laneway & secondary suites. The City wants commercial and mixed-use zones (CMUs) and transit-oriented corridor zones (TOCs) to be flexible, address climate change, be business friendly, and be economically resilient.
Important changes to zoning regulations include Reduction in Parking Requirements, Mid-rise and Tall Building, Built Form Regulations, New Permitted Uses, Microbrewery, Amusement Arcades, Local Commercial Uses, Amenity Area Requirements, and Incentives for Green Roofs. The development of laneway housing permits a secondary dwelling unit within a stand-alone building on a lot adjoining a laneway with a limited height and size requirement and restricted locations for windows and doors above the first floor, but eliminates parking requirements for the unit. Greg Maitinsky, Chief Executive Officer for Go Beyond Collection Agency, talked about cannabis legislation and a landlord’s ability to collect on damages related to growth and use. For those unaware of the legislation, tenants can carry up to 30 grams, cannot share with people under 18, can use in some public places, and can grow four plants per dwelling. It is legal to purchase online or from a licensed retail store, and all medical pot is protected by the Human Rights Code. The effect of cannabis on your pre- and post-move-out collections can be mold due to growing pot, disposal of plants and growth equipment left behind, and possible need for hazmat protection. Greg pointed out some great strategies a rental housing provider can follow to help reduce the impact of cannabis gone wrong. His pre-collection strategies include proper screening, superintendent training, awareness of tenant activities, and proper insurance.
June 18: Golf tournament It was another great day on the green for the annual golf tournament. Congratulations to all the winners and thanks to our sponsors for supporting this event. 50/50 putting contest winner: Liam Fleet – with a perfect score of 300! Best hole sponsor contest winner: Skyview Realty Closest to the hole • Male: Robert Fleet • Female: Karri-Lee Grant Longest drive • Male: Michael Huber • Female: Karri-Lee Grant
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Winning team: Diresco • Bill Norris • James Hill • Charles Koch • Todd Cadenhead
WINE CELLAR DRAW WINNER: Michael Holden with 66 bottles of wine!
May 23: Education seminar - Estate Planning Carmen Costa, The Costa Group, focused her presentation on the mortgage impacts since the stress test was implemented in 2018. For uninsured home buyers (anyone who qualifies with a down payment of 20% or more), the minimum qualifying rate is based on either the Bank of Canada’s five-year benchmark rate (5.14% at the time of writing) or the rate offered by your lender plus 2% – whichever is higher. Buyers with default insured mortgages (i.e., anyone who makes a down payment of less than 20%) must qualify using either the Bank of Canada five-year benchmark rate, or the rate offered by your lender (without adding the extra 2%) – whichever is higher. The stress test has limited the ability of traditional lenders to grow their mortgage books, with growth in residential mortgages at its slowest pace in 17 years. In late 2017, some buyers kicked into overdrive as they searched for a home, in an effort to avoid having to pass the mortgage stress test at the beginning of 2018. In fact, the Canadian Real Estate Association reported more than 46,000 homes sold throughout Canada in December 2017. The following month, after stress tests were put in place, housing transactions dropped by 14%. Carmen talked about how to overcome the stress test by using B lenders, which are large Canadian institutions that offer a variety of lending mortgage products. Clients that fall into the B category would be missing one of the major components that the banks and other A lenders require, such as income or good credit. The other option is private money, which involves borrowing money from a private individual or organization. While banks are traditional sources of financing for real estate and other purposes, private money is offered by individuals or organizations and may have non-traditional qualifying guidelines. Travis Dolinski & Mike Veldhuizen, MNP, LLP, talked about living trusts, whether they were good or bad, and how they relate to rental properties. Travis and Mike explained some of the best options available for passing along properties after death. They covered tax deductions for rental properties and when it makes the most sense to own a property through a corporation. The main takeaway from their presentation was the MNP LLP ExitSMART TM approach. This is a four-phased approach where the client retains control and makes all decisions; the focus is on what the client wants, not what the advisors suggest. They take into account all of the stakeholders – owners, management and family, following the “3 Circle Model” principles, which include a collaborative approach – working with other advisors and helping to provide discipline, to ensure progress toward a comprehensive result, but with flexibility to meet each client’s unique needs.
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Simplifying the life of a property manager
flow that saves time and energy and encourages on-time payments.
For many property managers, time management is one of the most important, yet most difficult, skills to master. With every acquired property comes a new set of challenges, and you want to be mentally and physically present to tackle them. That’s hard when you’re also reviewing applications, tracking payments, handling maintenance requests, and booking amenities for your residents.
Do you think you’ll miss chasing down those chronically late-paying residents? No, I didn’t think so.
The best way to free up time for you and your staff is to go paperless. I’ll show you how much simpler property management can be when you do. Best of all, anyone with a basic knowledge of computers and the Internet can do this.
Online applications Prospects crave an easy application process, and online applications are the best way to do it. This way, prospective renters can submit applications, even at 1 a.m. when your offices are closed. Not only do online applications make it easier for prospects to apply, more people than ever expect to be able to complete the entire leasing process online. Most Canadians are using electronic lease signatures these days. If you’re not supporting that majority, you risk losing the attention of qualified prospects. To take it a step further, your online application system should work great on a desktop computer—and be optimized for mobile. Many renters, especially millennials, prefer to use their smartphones to apply online. This is a great upgrade to your business because mobile grows in popularity every year.
Online payments Online payments are easy to set up and more secure and trackable than exchanging cash by hand. They save time by eliminating the need for human interaction. No more being bombarded by cheques and puffy envelopes stuffed with small bills, so no more making trips to the bank to deposit rent payments. The online method of collecting rent is so time efficient that millennials, who grew up in the Internet age, essentially see it as a requirement. But don’t look at that as selfish! Online payments are beneficial for both residents and property managers. There is an ease of cash
Online maintenance requests It’s inevitable that every unit is going to require maintenance at some point. The more units you manage, the more it may seem like life is a series of things needing repair or replacement. You can reduce that stress and personal involvement when you take advantage of an online maintenance management system. With an online system, a resident’s maintenance request uploads automatically to the maintenance tracker in your online portal. This prevents your inbox from being cluttered by requests and eliminates the chance of a request getting lost in your email. It also puts an end to time-consuming phone calls from disgruntled residents. Enabling residents to submit maintenance requests online lets them track the upkeep of their rental units in real time. For maintenance staff, an online and mobile maintenance management system means the freedom to schedule, manage, track, and close maintenance requests in the field without having to report into the office, saving significant time and hassle. What better way for your residents and staff to work together to make sure your properties are maintained effectively? A win-win!
Online booking of amenities Ensure a consistent, friendly user experience by offering online amenities booking via a resident portal. Residents can instantly view and reserve available common spaces on a calendar. This is yet another way to free up time and eliminate phone calls. Online systems also prevent accidental double-booking, and they are completely fair and transparent. With online services, property managers can achieve a nearly paperless office while delivering seamless customer service at every point during the renter experience. We highly recommend using a property management software solution to help you do this—just make sure it has all the capabilities described here. Peter Altobelli – Yardi Canada
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President’s message Teeing off into another LPMA season I would like to sincerely thank our board members, as well as our landlord and associate members, for their continued support. LPMA’s board of directors has recently voted me back in as president. In this issue, we have a story that outlines the proposed amendments to London’s nuisance bylaw. This is an important topic for landlords. The May meeting was well attended and included an Ask the Experts panel discussion featuring representatives from various areas of expertise. The annual golf tournament will be held on September 9, the second year in support of Merrymount Family Support and Crisis Centre. The golf registration was sent to members the last week in June and sold out in seven days, a sign of the enormous popularity of the event. Dinner/general meetings start in October. Wishing everyone a safe and enjoyable summer, - Shirley Criger, President
Proposed bylaw changes face revisions after LPMA raises concerns LPMA achieved a recent win by having proposed changes to the City’s public nuisance bylaw temporarily shelved — changes that could have resulted in landlords being fined up to $10,000 if their tenants held unsanctioned street parties. Despite this success, experts say the broader issue centres on the necessity of landlord groups monitoring policies that inform legislation before it’s passed, taking with it all chances of implementing changes. Objecting after the fact is futile, said London lawyer Joe Hoffer. “Municipalities are very sophisticated at coming up with policy initiatives and bylaw changes, and then implementing them without meaningful public input. That’s the bottom line and that’s common with municipalities right across the province,” added Hoffer. The City of London is proposing bylaw changes to curb the unsanctioned street parties, known as Fake Homecoming, that occur each fall at Western University. The City wants to recover increasing costs to fire and police services, and bylaw enforcement. Last September, 20,000 people attended the celebrations, and policing costs alone exceeded $100,000. According to the initial draft of the bylaw changes, property owners or landlords would have been responsible for tenants’ parties. If a party went
out of control, landlords would have to prevent it, or prove they tried to prevent it, or they could be fined $10,000. The most recent draft recommended increasing fines to $25,000. Hoffer said the initial issue for landlords centred on the municipality’s attempt to impose a liability on them. If landlords were in breach of the regulation, they could be charged for the cost of having police, fire and bylaw enforcement officers summoned to a nuisance party. “The landlord has to pay those costs; if they don’t, those costs go on their tax bill and eventually they’ll lose the property,” he said. “For landlords, that was simply untenable.” The changes would also require landlords to contravene the Residential Tenancies Act (RTA) by going on the property they leased to tenants — and to which they gave exclusive possession — without giving them the requisite 24 hours’ written notice. The RTA states that landlords can’t go on a property without notice unless there is an emergency. “It’s not an emergency if a tenant has people on their property,” Hoffer said. If landlords characterize a street party as an emergency, they will be a target for the anger of tenants and guests, he added. The uniforms of police, firefighters and bylaw enforcement officers offer them some protection. The correct way for landlords to respond to a nuisance party is to do it after the fact since, under the RTA, they have no control over whether events such as a party occur, Hoffer explained. They can serve a tenant with an N5 notice of termination, giving them seven days to correct the behaviour. If the tenant complies, the notice is void. LPMA’s Lisa Smith was alerted to the proposed bylaw changes by the City’s chief bylaw officer, Orest Katolyk. In March, Hoffer made a submission to the community and protective services (CAPS) committee at a public meeting, advising members to obtain legal advice and take the RTA provisions into account when re-drafting the bylaw changes. Hoffer told the committee the issue could be dealt with through an addendum to the lease that cautioned tenants about the consequences of hosting nuisance parties. This would entail imposing fines or charging tenants for the costs of summoning municipal employees. A second addendum to the guarantor form would require parents, who are guaranteeing the terms of the lease, to acknowledge that they would be equally liable for fines incurred by the tenant as a result of a breach of the bylaw.
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“I know people complain about kids these days, but I think they would respect their parents’ interests. Regardless, you have a way of penalizing somebody and collecting money when fines are levied,” Hoffer said. After Hoffer’s submission, the CAPS committee recommended that City staff review the changes. However, the second draft, presented in mid-April, did not reflect LPMA’s recommendations and continued to assume that a landlord had some legal basis to prevent tenants and their lawful guests from engaging in nuisance conduct. In addition, LPMA believed the City gave barely enough time to allow Hoffer to create a submission and meet the deadline to appear before the next CAPS committee and public meeting on May 28. After that meeting, committee members met in camera with legal advisors and, with no public debate, directed staff to bring back an amended bylaw. It will be presented in mid-August at a public meeting. In an interview, Katolyk said a task force was struck last November to consider options, including cost recovery. Its members decided to accomplish that goal by amending the nuisance bylaw to focus on preventing, ending and cleaning up after a nuisance party. He said the City engaged the town and gown committee, of which LPMA is a member, held a neighbourhood meeting and posted a survey on the City’s website requesting the public’s opinions on street parties and how to resolve them. Katolyk disputed LPMA’s contention that not enough time was given for the association to respond to the second draft of the bylaw. “The time was set by council so it wasn’t something that was debatable,” he said. “We’re aware of LPMA’s comments and we’re giving them regard in our next revision.” Hoffer believes landlord associations need to be vigilant within the urban areas in which their members operate. He advises them to monitor the online reports that go to specific committees and then create a strategy to support or contest a proposal. Tony Irwin, president of the Federation of Rental-housing Providers of Ontario (FRPO), said it’s not uncommon for industry stakeholders not to be consulted, although the provincial government has a greater capacity than municipal governments to contact stakeholders. “They don’t have the same budgets or the same staffing and perhaps they don’t have the same capabilities. It really is important to use every method you can to try to find information.” Even as the head of a provincial association, Irwin has often accidentally discovered important information through the media. For that reason, regional associations should ask members to update them if they learn of valuable news. Although information is accessible by reading committee or council meeting agendas on municipal websites, it’s better to find out earlier so an association can make a submission or arrange a meeting with the appropriate department.
“You want as many opportunities for contact that you can and you hope that you find out and act accordingly,” Irwin noted.
However, it’s wise for associations to have a plan in case they need to respond quickly to an issue; FRPO can also help.
“Their knowledge and their contacts coupled with our experience can make that work well together,” Irwin said.
LPMA golf tournament celebrates 20 years of supporting local charities When members hit the links for the annual LPMA golf tournament on September 9, they will be celebrating 20 years of raising money for London charities.
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“We’ve always tried to find grassroots organizations to support,” said golf tournament chair Brenda Trineer. “It’s something we are very proud of.” Funds raised at this year’s tournament will mark the second of a two-year commitment in support of the Crisis Residential/Respite Program at Merrymount Family Support and Crisis Centre. Last year’s event raised $20,000. “Merrymount is a natural fit for our members,” Trineer said. “It’s a fantastic charity that provides a refuge for children who require a safe bed to sleep in.” Founded as an orphanage in 1874, it is the only centre in Canada to provide emergency overnight shelter for children whose parents are in crisis. The average stay is three or four nights. The tournament is a much-anticipated opportunity for LPMA members and associate members to get to know each other in an informal setting, said Trineer, who will be stepping down as tournament chair after this year’s event. “I’m proud of the fact that registration continues to sell out within a week to 10 days. It’s been an amazing 20 years, but I felt this anniversary would be a good time to pass the torch on to somebody else.” Merrymount executive director Paul Howarth said the funds raised this year and last will make a real
difference in the lives of children and families who turn to Merrymount in times of crisis. “A multi-year commitment allows us to plan our budget and to know that we’ll be able to provide help to children coming into our residential respite program for another year.” In 2018, the program provided a temporary home to 4,500 children from birth to age 13. That’s a significant increase over 2017 when just under 3,000 children were served. Of the centre’s 18 residential beds, only four are supported through government funding. “Each bed costs around $85,000 a year to keep open,” Howarth noted. Children enter the program for many reasons, including families that are struggling with addiction issues, child or parent mental health challenges, a tumultuous divorce, or a sudden illness. If family or friends can’t help with childcare during these difficult times, Merrymount can step in. “Knowing that their children are in a safe place allows parents to deal with whatever crisis they are facing so they can build a better future for their family,” said Howarth. “We are so pleased to be the recipient of the funds from this golf tournament, and to have the opportunity to strengthen our relationship with London rental housing providers.”
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President’s message WRAMA continues its dynamic event series through the fall. Featuring guest speakers who support the provision of private residential rental accommodation, our events are timely and informative. With a federal election scheduled for October 21, the importance of being informed on party platforms cannot be understated. Please join us! Event dates below with more details available at www.wrama.com. Wednesday, September 11, 2019 Expert Panel Event Hosted by AM 570 Kitchener Today’s Brian Bourke Tannery Event Centre, 151 Charles St. West, Kitchener, ON Wednesday, October 9, 2019 Professional Industry Event Guest Speaker TBA Golf’s Steak House, 598 Lancaster St. W, Kitchener, ON Wednesday, November 13, 2019 Canadian Federation of Apartment Associations National Rental Housing Outlook Guest Speaker John Dickie, President, CFAA Tannery Event Centre, 151 Charles St. West, Kitchener Looking forward to seeing you at an event! - Andrew Macallum, President
Understanding the rental-housing provider experience In her article published July 13, 2019 in The Globe and Mail, Jennifer Keesmaat, chief executive of the Keesmaat Group and former chief planner of Toronto, provokes readers to rethink the way in which we confront housing issues. Suggestions range from renting out rooms, including ones vacated by grown children, to repurposing basements and building secondary suites to help address the housing crisis. There is a disconnect between our idea of property ownership and rights – owning versus renting and expectations about living in Canada.
I remember vividly, in 1999, starting my adventure into my career and adulthood in downtown Toronto. Having completed my tour of different universities in southern Ontario, I secured a job at Bloor and Spadina. That was the easy part. Trying to find a place to live, in a city which I was unfamiliar with while balancing my wants (budget, transportation) and needs (safe and secure) led to meeting a spectrum of humanity offering shared accommodation. From the group of male students renting out the enclosed balcony of their rented condo to the middle-aged single woman renting out a bedroom in her centrally located home, I eventually turned to a school friend who connected me with her parents’ acquaintances who rented me the top floor, semi-private bedroom in their annex-area Victorian home. I have many great memories from living in that house – an adjustment for the providers, who were empty nesters, and me, a single 25-year-old male. They were kind, gracious, and generous. Friendship and humour were found in our differences. Among the many conversations was explaining that the cheese I would bake on pizza was as startling to their noses as the unfamiliar preparation of kimchi was to mine. Our relationship was respectful and trusting. I learned to love kimchi, a traditional side dish of salted and fermented vegetables and a staple in Korean cuisine. Over the years since starting out in the Annex, I have lived in different housing situations and have gained experience as a renter, homeowner, and rental housing provider. There are many considerations in offering housing of any kind for rent. For those who own a home in the City of Toronto, you may be in a position to take advantage of a proposed draft zoning framework that responds to provincial changes in the Planning Act. The changes in the Act are intended to support secondary suites across the province and seek to simplify the creation of secondary suites. According to the City of Toronto website, a secondary suite is defined as a “self-contained living accommodation for an additional person or persons living together as a separate single housekeeping unit, in which both food preparation and sanitary facilities are provided for the exclusive use of the occupants of the suite, located 1 in and subordinate to a dwelling unit.”
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Homeowners who plan to venture into the business of rental housing provision are likely considering the risks and benefits that will confront them along the way. Questions about addressing a community need, influencing the value of a home and impact on personal routine, family life, and neighbourhood, are sure to be at the top of the list. Other considerations of building and renting out a secondary suite should include policy and regulation from every level of government. When you become a rental-housing provider, you are subject to the expectations of the Residential Tenancies Act, 2006 (RTA) and its enforcement through the Landlord Tenant Board (LTB), a quasi-judicial arm of Social Justice Tribunals Ontario (SJTO). Tenants in Ontario are provided free legal counsel, while rental-housing providers are not. As a result of the shortage of adjudicators, the provincial government has endeavoured on a hiring initiative. If you find yourself seeking support from the LTB, be prepared for a hearing date that is assigned months from the application date and an accumulation of legal costs. To illustrate the vast quantity of people taking the effort to seek support from the LTB via phone, there were 272,719 calls handled with an average time per call of 4 minutes and 57 seconds during this time 2 period. According to the SJTO 2017-2018 Annual Report (the latest available), there were 47,595 applications from rental-housing providers to Terminate & Evict for Non-Payment of Rent, which account for just under 66 per cent of the total number of 3 applications made. In Toronto, 32,633 landlord/tenant applications to the LTB were made, accounting for about 40 per cent of the 4 total 80,249 applications made from around the province. The RTA does not apply if the tenant shares a kitchen or bathroom with the landlord. Renting out your child’s bedroom after they have left home would be considered boarding. Renovating the basement complete with a private entrance would be considered a tenancy. As a landlord, you must use the Residential Tenancy Agreement form. If you do not provide the tenant with the standard lease form, the tenant can demand that the landlord do so. The “provincial lease,” as it is commonly known, is 14 pages long. Legal addendums in the “industry lease,” including items on damage from growing plants as well as the condition and care of the secondary suite, bring the total number of pages to 28. If the property address falls within a municipality that requires the satisfaction of a residential rental housing licensing by-law, there will be additional regulations, requirements, and costs. In the City of Waterloo (my present home), the cost varies (up to and beyond $70 per month, per unit) and the licensing fees and mandatory charges levied by the City of Waterloo have been declared “municipal charges and taxes” as determined by the Landlord and Tenant Board, and affirmed by Divisional Court. Among the documents required for a rental license in the City of Waterloo is a police criminal record check. If taking advantage of an incentive to build a secondary suite, the maximum amount of rent that a tenant is charged may be determined by the municipality and strictly controlled by the province,
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with increases in rent permitted once a year and capped at 2.5 per cent. The allowable increase for 2019 is 1.8 per cent. As a rental-housing provider, you cannot force a tenant to leave the secondary suite if you change your mind about being a rental-housing provider. Additionally, the tenant can dictate whether or not they vacate the secondary suite if you decide to sell your home. Issues like this, as well as those surrounding pets, number of occupants (guests vs. partners vs. weekend parenting obligations), smoking (tobacco and marijuana, for example), and noise are all important and, in some cases, lifestyle-altering considerations. The rent charged is generated income and reportable to the CRA. Your applicable marginal tax rate impacts the amount of income taxed. Rental-housing provision and becoming a landlord is not for the faint of heart. The way in which rental-housing providers are viewed is changing, as the need for affordable private rental supply has become a viable part of the solution to Canada’s housing crisis. However, the need to understand the rental-housing landscape is
imperative for those hoping to enter the market and take advantage of the City of Toronto’s Secondary Suite Initiative or others offered by municipalities across Ontario. It took a sense of adventure to navigate my way through shared accommodation. It satisfied a need in my life at the time as owning a home does now. For every person I speak with about the benefits of owning a home, I hear an equally appealing reason for renting. Whether to offer unused space as a viable home for another person is a deeply personal decision that can provide many positive outcomes. It is the unintended consequences of not knowing and understanding the impact of layers of multi-tiered government regulation that can result in both tenants and landlords being dissatisfied with the experience. By Andrew Macallum, President, WRAMA, and Principal, Management First Professional Property Management 1
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