RHB Magazine May/June 2024 - Dealing with the LTB

Dealing with the LTB RENTT:

By David Gargaro

Rental property owners across Canada have long had issues with their version of the Landlord and Tenant Board (LTB) (also referred to as the Residential Tenancy Branch (RTB) or Office of Residential Tenancies (ORT)). There are numerous issues, such as increased delays in hearing times, more tenants (and tenant groups) taking advantage of the system, and unfavourable regulations.

In this month’s issue, we asked our esteemed RENTT (Rental Executives National Think Tank) panellists, who are leaders of rental housing associations across Canada, to comment on the issues their members are having at the LTB. They discussed current backlogs for appointments or hearings, challenging regulations, how the LTB could improve its regulations, and (where applicable) the impact on the use of above guideline increases (AGIs).

RENTT experts:

RHB: What type of backlog are you facing for appointments or hearings at the LTB?

Cameron Choquette: The most impactful backlog we are facing at ORT in Saskatchewan is related to decisions being rendered in a timely manner for more complex decisions, such as monetary and tenant breach claims. These decisions are often rendered four to seven months after the hearing, which leaves both tenants and rental housing providers in limbo and is not industry best practice.

David Hutniak: From our perspective, we need to see continuous improvement on the RTB timelines and dispute resolution process, public information and public education, internal policies/rules of procedure, and compliance and enforcement measures. We would especially like to see improvement in the compliance and enforcement measures for the bad actors, both tenants and landlords, who are responsible for creating the majority of the problems in the rental market.

David Hutniak, CEO, LandlordBC

Tony Irwin, President and CEO, FRPO (and Interim President, CFAA)

Cameron Choquette, CEO, SKLA

Kevin Russell, Executive Director, IPOANS

Kevin Russell: Nova Scotia’s Residential Tenancies process is flawed. Applicants must navigate through two tribunal hearings— Residential Tenancy and Small Claims Court appeals—just to obtain a final resolution. However, except for vacant possession orders, there is no enforcement of orders for other RTA Statutory Conditions breaches such as non-payment of rent or unit and property damages.

Tony Irwin: We have heard from some of our members that new applications seem to be prioritized over older ones, so we hope resources can be allocated to those older applications so they can be adjudicated and cleared. We also hear that applications to expedite a hearing, often for resident behaviour, aren’t being prioritized in a timely manner and applications regarding unauthorized occupancies are also taking a long time to process. Both of these applications appear to be on the rise post-pandemic, so this is something we are watching.

RHB: How has the situation improved or worsened over the last year?

Cameron Choquette: Over the past three to five months, the decision timelines have not improved. However, we are very pleased with the timelines to review and schedule hearings as they have improved significantly in 2024.

Tony Irwin: L1 applications are generally receiving a hearing after approximately four months, which is primarily due to the hiring of a significant number of new adjudicators. This is a significant improvement that FRPO has been advocating for with government for some time, but we would like to see this timeline reduced even further so we continue to work with the Ministry of the Attorney General and Ministry of Municipal Affairs & Housing, who are also committed to this as well.

David Hutniak: The RTB has significantly improved access to justice over the past year or so for both landlords and tenants largely due to the province’s $15 million funding boost. For example, the RTB has recently made improvements, such as expanding the direct request process and hiring additional staff to help bring down wait times, that are intended in part to ensure disputes involving problem tenants are resolved more quickly. They acknowledge that there’s more work to be done.

Kevin Russell: Final resolutions can take up to six to nine months, depending on hearing wait times and rescheduling.

RHB: What aspects of the LTB regulations are challenging or burdensome for landlords?

Cameron Choquette: ORT’s new online system is proving to be cumbersome for some members, but we remain committed to providing recommendations for improvement and walking our members through how best to use the system.

David Hutniak: In our experience, particularly in light of the improvement we’ve seen in access to arbitrators, for landlords who understand their rights and responsibilities and come into a hearing properly prepared, the system is largely working for them. In any tribunal system like the RTB, there will be occasional challenges with arbitrators, but we’ve even seen improvement in that area too, as the RTB has instituted better training and oversight/quality control measures for arbitrators.

Tony Irwin: One area of concern we have is the increased activity at the municipal level to enact bylaws that FRPO believe encroach on provincial jurisdiction. We saw this recently when the City of Hamilton passed a bylaw regarding renovations that require vacant possession even though provincial rules already exist. This is an additional cost and administrative burden on rental housing providers during a time when operating costs far outpace legislated rent increases.

Kevin Russell: A concerning trend is emerging. More tenants are seeking legal aid lawyers to represent them in residential tenancies hearings. This has transformed hearings from simple adjudications by third-party adjudicators to complex proceedings where lawyers employ legal tactics typically reserved for Supreme Court hearings. This prolongs tenancies, even in simple cases for non-payment of rent, at the expense of rental housing providers to endure months of lost revenue and property damages. Nova Scotia has witnessed an uptick in rental housing providers resorting to the Supreme Court of Nova Scotia at a great expense to have Residential Tenancies and Small Claims Court orders overturned.

RHB: What could the LTB be doing (or what regulations could they change) to improve the balances between protecting tenants’ rights and ensuring landlords’ interests?

Cameron Choquette: It would be appreciated if tenants were held to the same conduct and evidence standards that rental housing providers are so that we can ensure fair hearings are taking place and that tenants have sufficient evidence for their claims, just like rental housing providers do. We would recommend that hearings be recorded so that appeal judges could have fulsome transcripts to rely on when rendering

their decisions and to ensure accountability for hearing officers. Reducing the period that rental housing providers need to wait to serve an immediate notice to vacate and notice of arrears is our primary recommendation. Currently the waiting period is 15 days. We recommend a waiting period of seven to ten days, after which point the notice can be served and legal proceedings can commence to ensure that chronic non-paying tenants are not skipping out on more than one month’s rent.

David Hutniak: The RTB is essentially an agent for the government responsible for administering the Residential Tenancy Act. In that role that means providing information, resources, and dispute resolution services. In that sense, it’s the government, not the RTB, that’s responsible for protecting tenants’ rights and ensuring landlords’ interests. In simple terms, the government needs to ensure that they create and maintain a legislative environment that is conducive to the successful operation of rental housing while encouraging robust growth of new supply. That means ensuring that in their desire to help tenants, they don’t keep harming landlords, which isn’t always the case in BC. Ironically, the unintended consequences are such that more often than not their policies are ultimately harming renters.

Tony Irwin: Last year, FRPO was successful in advocating for additional funds for the LTB when the government announced $6.5 million in annual funding to hire 40 additional full-time adjudicators and five back office staff. This is the single largest investment since the inception of the LTB and members tell us they are seeing an improvement in service times, which is encouraging. It is critical that both residents and rental housing providers have timely access to justice, so FRPO continues to call for the LTB meets its own service standards by streamlining decisions through tools such as Default Orders and continuing to address resourcing constraints.

Kevin Russell: Nova Scotia lacks a Compliance and Enforcement program to enforce orders, something IPOANS has been advocating for years.

RHV: How do LTB regulations support or hinder the use of AGIs?

David Hutniak: In BC, the process is called Additional Rent Increase (ARI) and the process is relatively new. It’s not utilized very broadly by the sector, even though it is structured in a rather straightforward manner and the turnaround times for hearings to have applications approved is quite reasonable. There were certainly issues at the beginning but notable improvements in the past year. LandlordBC continues to work with the

RTB to further refine processes, and we are doing more education for our members to help them take advantage of the ARI process.

Tony Irwin: Annual rent increases are determined by the Ministry of Municipal Affairs & Housing, and are subject to a 2.5 per cent cap. AGIs are the rules and regulations determined by the government that apply to major capital improvements and provide a process for rental housing owners to recover a portion of the expenditure through a rent increase above the annual guideline. To qualify, the rental property owner must have completed and paid for the work that is structural in nature for things like balcony or undergrounding parking garages, HVAC systems or energy retrofits that promote conservation. AGIs are capped at 3 per cent per year over three years and must be approved by the LTB.

RHB: Why is it necessary to increase rents via AGIs?

David Hutniak: Up until September 2018, the maximum allowable annual increase formula in BC was 2 per cent + CPI. This in our view was an intelligent approach to providing landlords with revenue certainty for capex and operational costs. Unfortunately, for what in our view was strictly a political decision by the BC NDP at the time, despite our strong objections and efforts to demonstrate the folly of their thinking, they decided to move to CPI only for the maximum allowable annual increase. Subsequently, they decided to work with LandlordBC to implement the ARI process, which took over three years because of initial delays at their end, and then the pandemic. So this is why we need ARIs.

Tony Irwin: Ontario’s rental housing stock is old with over 80 per cent of it built before 1980. These buildings are at a stage where significant capital investment is needed to modernize and bring them up to 21st century standards. This is the most affordable rental stock we have, so it is critical that these units be preserved so they can continue to be safe places to call home for many decades to come. Annual rent increases aren’t keeping pace with rising property taxes, utilities, maintenance or insurance costs let alone major structural investments, so rental housing providers apply for an above guideline rent increase to recover a portion of these costs.

RHB: Thank you for your time.