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Vol. 13 No. 5 Nov/Dec 2020

Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives

The official publication of:

2020 Taxation Report

Understanding the inequities in the taxation of multi-residential properties

How to supercharge property management with technology Automation can benefit your property management business in a number of ways.

Rental housing 101 for government Governments across Canada don’t do what is necessary to make housing more affordable.

New rental applications - how to avoid a bad tenant The traditional method of screening potential tenants is time consuming and challenging.


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EDITOR’S NOTES Let’s come together even if we’re apart We’re weeks away from the end of 2020, which most people will be happy to forget. Our current situation won’t get better once the clock hits midnight on December 31. But it will get better eventually. There’s a lot to be sad and upset about, and there’s also a lot to look forward to. We’ll get through it, as a family, as friends, as Canadians. If you can’t be there in person with loved ones, you can still call, email, text, and video chat to give them your Christmas and holiday wishes. And think of the time when you’ll be able to hug them again - it will feel that much sweeter. This issue of RHB Magazine features a taxation report on the multi-residential industry. It takes a look at the disparities in the treatment of rental properties and single-family properties with respect to property taxes, capital gains tax, and the taxes on imputed income. We examine the impact of these discriminatory tax practices, as well as what could be done. Make sure to read Spin Cycle, as John Dickie, President of the CFAA, talks about what associations can do to help even the tax playing field.

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Associate Publisher Nishant Rai

Editorial

David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

This issue covers traditional issues with verifying new rental applicants, and how rental property owners can use technology to overcome the various challenges with finding the right tenant for their building. We also take a hard look at how governments across Canada talk a good game about wanting housing to be more affordable, but their actions don’t match their words.

Creative Director / Designer

Make sure to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. And check out Suite Count for a look at pricing trends in the GTA, as well as Final Take Away for details on how to use technology to supercharge property management.

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As usual, we enjoy hearing from our readers and support twoway communication. If you have any comments or questions, send them to david@rentalhousingbusiness.ca. I look forward to hearing from you.

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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

Enjoy the issue! David Gargaro Senior Editor

4 | Nov/Dec 2020

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CONTENTS

VOL.13 NO.5 2020

Rental housing 101 for government: Walking the walk instead of talking the talk Governments across Canada are not doing what’s necessary to make housing more affordable.

RHB’s forum for rental housing associations to share news, events and industry information

2020 Taxation Report

Understanding the inequities in the taxation of multi-residential properties When it comes to paying taxes, owners of multi-residential properties in Canada have always been treated unfairly when compared to single-family property owners.

Hot Topics: EOLO reports on the arguments EOLO used in changing an Ottawa City Council motion calling for a provincial eviction moratorium to a call for provincial financial support to enable all tenants to pay their rents. pg. 45 HDAA provides information on the proposed amalgamated City of Hamilton secondary suite by-law that is to replace the separate by-laws of the former area municipalities within the former Region of Hamilton-Wentworth. pg. 49 LPMA offers suggestions for avoiding slip and fall claims, and other winter maintenance tips. pg. 53 WRAMA thanks its outgoing President, Andrew Macallum, and outgoing administrator, Sandy Knapp, as well as pointing out the new LTB Rules of Procedure, which came into effect on December 1. pg. 57

The Member Associations

Regional Association Voice Regional Association Voice features the latest industry news from four member associations.

New rental applications - how to avoid a bad tenant The traditional way of verifying new rental applications is time consuming and challenging, and does not adequately help rental property owners to find good tenants.

6 | Nov/Dec 2020

Final Take Away Use technology to supercharge your property management to find good tenants.


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PRESIDENT’S CORNER Finance Minister Freeland delivered the Fall Economic Statement of the Government of Canada on November 30. For rental housing, the best news is that the government did not announce any moves to review the capital gains tax, or to impose any interest deductibility limitation on businesses or rental housing. Those are moves that were being contemplated before COVID-19 struck. They are also still being advocated by the NDP. However, CFAA met key decision makers, and explained the negative impact either move would have on the rental supply and on housing affordability. Those moves appears to be off the table for now. The government also announced another $12B of loan support for new rental construction under the Rental Construction Financing Initiative (RCFI) over the next seven years. That is expected to support the construction of 28,500 additional rental units. CFAA applauds the expansion of the RCFI. Most of all, we applaud the signal the expansion sends, that the development of for-profit rental housing is still valued by the government, despite the lack of attention to for-profit rental housing in the Throne Speech, delivered in September. CFAA will be working on ways to improve the perception of for-profit rental housing providers. Among other actions, CFAA is establishing an Equity and Inclusion Committee to support rental housing providers in meeting the requirements of the Human Rights Codes, and today’s standards for promoting equity and inclusion. In October and November, CFAA held a series of six webinars, including Benjamin Tal’s Economic Update, and the Executive, Operations and Technology Roundtables.

8 | Nov/Dec 2020

Reports on five of the webinars are found in National Outlook, starting on page 35. The report on the webinar on CMHCinsured financing includes important steps rental providers need to take if they want to maximize their access to the favourable interest rates available through that product. The Platinum Webinar sponsors were Yardi, Wyse Meter Solutions and The Home Depot. CFAA thanks all the webinar sponsors, who are listed on page 44. The Home Depot offers rental providers repair products and services across Canada. Make sure The Home Depot knows you are a member of CFAA, either as a direct member, or by being a member of a CFAA-member association, when you join HOME DEPOT PRO at no cost. That provides you more benefits from The Home Depot, and increases support for CFAA to help us protect the rental housing industry at the federal level.

John Dickie, CFAA President John Dickie, CFAA President


rentalhousingbusiness.ca | 9


In this issue of... NATIONAL OUTLOOK 35. What steps are needed to maintain access to CMHC-insured mortgage funds? What are some of the other options?

37. What insights did Benjamin Tal provide about the Economy under COVID-19? How has COVID-19 affected real estate? Why are most residential rents being paid? Can we expect that to continue?

38. W  hat information about risks and opportunities did the Executive and Operations Roundtables offer rental housing providers?

CFAA Member Associations Eastern Ontario Landlord Organization (EOLO) www.eolo.ca P: 613-235-9792 Federation of Rental-housing Providers of Ontario (FRPO) www.frpo.org P: 416-385-1100, 1-877-688-1960 Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435 Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572 LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324

40. H  ow can rental housing providers best upgrade their technology to deal with COVID-19 issues, including rent collection, leasing, R&M management and payment, and two-way communications with tenants?

To subscribe to CFAA’s e-Newsletter, please send your email address to communication@cfaa-fcapi.org.

The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $525 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.

10 | Nov/Dec 2020

London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703


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2020 Taxation Understanding the inequities in the taxation of multi-residential properties When it comes to paying taxes, owners of multi-residential properties in Canada have always been treated unfairly when compared to single-family property owners. By every metric, rental property owners in different jurisdictions pay more than their fair share of property taxes, capital gains taxes, and income taxes. While all levels of government continue to look for ways to make rental housing more affordable for low-income people, higher taxes on rental properties mean higher rents for tenants. Balancing the tax rates and rules between single-family and multi-residential property owners would benefit both rental property owners and tenants. This article examines several ways in which rental property owners pay more than their fair share of the tax burden compared to singlefamily property owners. It also describes the impact of the tax disparity on both owners and tenants, and possible solutions to these issues.

14 | Nov/Dec 2020


Report By David Gargaro

Disparity between multi-residential and single-family property taxes across Canada In many cities across Canada, multi-residential properties pay higher property rates than single-family properties. In some cases, rental property owners pay more than double the property tax rate paid by single-family home owners. Table 1 lists 2020 property tax rates for multi-residential and single-family properties for a number of cities across Canada, and shows the percentage difference in the rates.

Table 1: Comparison of property tax rates across Canada City

Multi-res tax rate

Single-family/ condo tax rate

% more for multi-res

Fredericton, NB

2.554

1.431

178%

Moncton, NB

2.773

1.650

168%

Saint John, NB

2.908

1.785

163%

Halifax, NS

1.206

1.206

-

St. John’s, NF

0.770

0.770

-

Charlottetown, PEI

1.910

1.670

114%

Montreal, PQ

0.641

0.637

101%

Toronto, ON

1.093

0.600

182%

Ottawa, ON

1.446

1.085

133%

Hamilton, ON

2.729

1.189

230%

Saskatoon, SK

0.912

0.912

-

Calgary, AB

0.752

0.752

-

Edmonton, AB

1.035

0.933

111%

Vancouver, BC

0.293

0.293

-

Victoria, BC

0.504

0.504

-

What do these numbers mean? • Multi-residential properties in New Brunswick are taxed, on average, at a rate that is 69 per cent higher than owner-occupied properties, 89 per cent higher than other Atlantic provinces, and 212 per cent higher than those in other provinces across Canada.

• Multi-residential properties in Hamilton are taxed at a rate 2.3 times higher than singlefamily homes or condos, and bear a much higher property tax rate than either type of property in Toronto. • Some cities, particularly in Western Canada, tax multi-residential and single-family properties at the same rate.

rentalhousingbusiness.ca | 15


This last statement is important for understanding how owners of multi-residential properties are treated with respect to property taxes. It demonstrates that it is possible for multiresidential and single-family homes to pay the same property tax rates, which is also fair to both types of residential property owners and to tenants. Why is New Brunswick collecting much higher property tax rates for multi-residential properties than the rest of Atlantic Canada? Owneroccupied (i.e., single-family homes) and nonowner-occupied properties (including rentals) are taxed at both the municipal and provincial levels. However, owner-occupied homes receive a property tax credit, which eliminates the provincial property tax. In essence, they’re only taxed at the municipal level. “We have been lobbying the provincial government on correcting this double taxation for 16 years,” said Willy Scholten, President, New Brunswick Apartment Owners Association. “In the initial years, we had to educate government officials and politicians on the numbers and why it is inconsistent with the rest of the country. We have been successful in getting to a position where this is no longer questioned. The two issues that we face now are the province does not want to give up the revenue that they are getting and how to make the change to ensure the savings go to the tenants.” One of the key issues is that the Province of New Brunswick does not want to give up the revenue it’s getting from multi-residential properties. They also want to ensure that the savings from reducing the property tax rates go to tenants. However, property taxes in New Brunswick are equal to all other expenses combined for rental property owners. Property taxes are the key determining factor in rent, as all the expenses are passed along to tenants. The “double property tax” in New Brunswick increases rents and limits the supply of affordable housing. Since property tax rates are so high, property development is undertaken by only a few local developers. “Property taxes should not be different whether you own a home or rent a home,” said Scholten. “By eliminating that discrepancy, and bringing New Brunswick in line with the rest of the country, it will reduce cost pressures on landlords impacting rental rate decisions, help with the

16 | Nov/Dec 2020

extremely low vacancy rates by encouraging outside developers that are non-existent now to build in the province and encouraging existing developers to do more, and allow landlords to make improvements to their properties. All of these things will improve the quality of life for tenants in New Brunswick.” Many cities in Ontario (including Hamilton) have a similar problem with high property tax rates for multi-residential properties. Prior to 1998, when the Province of Ontario introduced Market Value Assessment (MVA), property tax assessments varied by municipality, which made it difficult to compare properties. At the time, there was no intention to dramatically change the property taxes paid by different classes of properties. The municipalities were allowed to set their own rates for multi-residential and single-family properties, which enabled them to obtain the same revenue from each property class as they did before MVA. However, bringing the differences in the tax rates into the open did not solve the problem. “We have a situation where the poorest members of our society are paying the highest property tax rates,” said Arun Pathak, President, Hamilton & District Apartment Association (HDAA). “Generally, income tax is a progressive tax, so the more you earn, the higher the tax rate. The incomes of renters are well below the incomes of homeowners; imposing a higher tax rate on lower income people causes the tax to be regressive. Low-income people are paying a higher tax rate, which is contrary to Canadian values of fairness.” According to provincial government guidelines, the multi-residential property tax rate should be between 1 and 1.1 times the single-family residential rate. New multi-residential properties are taxed at the single-family residential rate in most Ontario municipalities. If property taxes decrease by more than 2.49 per cent from one year to the next, the municipality must inform tenants of the reduction, including a calculation of the corresponding rent reduction, which takes place automatically (without any need for the rental property owner’s approval). For example, if Hamilton’s property rates were equalized, the decrease would equate to a 12 per cent reduction in rents. This rent reduction would be revenue neutral for owners of multi-residential properties, as taxes are included in the rent.


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“The benefits of an equalization of the rates would be an immediate reduction of rents for all tenants who don’t move,” said Pathak. “Competition at lower costs might very well keep rents down, but over time, even if property owners did increase the rent on turnover, they would have more funds for maintenance and improvement of their properties.”

For example, if you had a capital gain of $500,000 from selling a rental property, then half of that, or $250,000, would be taxable at your marginal tax rate. If you fall into the 33 per cent marginal tax rate (the top federal tax rate), then you would pay $82,500 in capital gains taxes to the federal government, and more to your provincial government.

The main issue for municipal politicians in Ontario is that they don’t want to equalize the property tax rates, as the increase in property taxes would mean single-family homeowners would pay more. Homeowners generally complain about an increase in their property taxes, and they tend to vote in greater numbers than tenants. Municipal politicians don’t want to come off as the “bad guys”; since many tenants are unaware of the inequity in property taxes, most politicians won’t put much effort into equalizing property tax rates.

Owners of a principal residence do not pay tax on their capital gains when they sell the property or it passes on through to an estate upon the owner’s death. Owners of multi-residential properties must pay a capital gains tax on 50 per cent of the gain when they sell the property. This also applies if someone receives the rental property through an inheritance. So, if a rental property owner passed along their apartment building to their children, tax is paid on the deemed disposition of the testator.

“Even if municipal politicians understand the unfairness of the different property tax rates, they often won’t do anything about it,” said Pathak. “Some municipalities have made a few small changes in the multi-residential property tax rate, but others have found excuses to block it wherever and whenever they could. Overall, they have taken small steps to prevent the situation from getting worse.”

Herein lies the main issue with the capital gains tax in Canada. When a family has owned multiresidential properties for years or decades, selling

Treatment of capital gains taxes In Canada, the Income Tax Act requires that a person pay taxes on capital gains when they sell capital property for more than what they paid for it. Capital property includes securities (e.g., shares, stocks, bonds, REIT units) and real estate investments (e.g., cottages, rental properties), but does not include principal residences. You would pay income tax on 50 per cent of your capital gains based on the following formula: Capital gain or loss = Proceeds of disposition – (Adjusted cost base + outlays and expenses) • Proceeds of disposition = how much you sold the price of capital • Adjusted cost base = how much you originally paid for the capital • Outlays and expenses = costs deemed necessary before selling (e.g., repairs, finders’ fees, commissions, brokers’ fees, surveyors’ fees, legal fees, transfer taxes)

18 | Nov/Dec 2020

“Even if municipal politicians understand the unfairness of the different property tax rates, they often won’t do anything about it...” the property or passing it along to children will result in significant capital gains taxes. Since capital is mobile, and investors compare after-tax returns, the capital gains tax on multi-residential property is effectively borne by tenants through the rents they pay over time. Homeowners do not have to pay that tax. Rents cost more directly because rental developers have to pay land prices determined in the market for condo developments. Higher costs result in less rental supply, which results in higher rents “Taxing capital gains upon the sale of a principal residence is the most logical way to equalize tax treatment if there is a societal goal to treat owners and rental properties the same,” said Frank A. Clayton, Ph.D., Senior Research Fellow, Centre for Urban Policy and Land Development, Ryerson University. “However, this would incur the wrath of homeowners at election time.” Another option for equalizing the situation is to exempt multi-residential property from capital continued on page 22


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It’s time to correct the unfair tax situation As the CFAA President, I am glad to see the feature on taxes in this issue of RHB Magazine. The level of federal taxes on rental housing has been a key issue for CFAA since its inception 25 years ago. There is no doubt that rental housing is more burdened with taxes than we were in 1970, before the capital gains tax was introduced. Equally, it is clear that many homeowners do not realize the enormous benefit they receive from the tax exemption given to principal residences --- their homes. Hardly any homeowner thinks to ask why they receive that benefit while renters end up paying capital gains tax on their homes through their rent, even though renters have much lower incomes on average. There are several problems. If they think about it all, many people just think of who pays the tax directly. They picture landlords paying the tax, not tenants. But landlords get the money to pay the tax through the rents they collect, and so their tenants ultimately pay the tax. Economists who study the question agree on that. Many people also picture all landlords as being wealthy. Some are, but many others are not. More than half of rental housing consists of singlefamily homes, doubles, and duplexes that don’t look like rental housing. Often the owner lives in one half, and rents out the other half, as my parents did while I grew up. Many landlords are people who lack a pension plan, and for them,

20 | Nov/Dec 2020

their one or two rental units are their “pension plan.” There are even fewer people who understand the imputed income issue. Both issues exist Canada-wide, and for both federal income tax and provincial income tax in all provinces. Finally, the property tax issue is a huge issue, but not in all provinces. It is also not uniform across each province. For example, in York Region just north of Toronto, rental housing is taxed at the same rate as single-family homes, but in Toronto, rental housing is taxed at 182 per cent of the rate that applies to homeowners. Even though lower taxes on rental properties would ultimately moderate rents, the change would also be good for landlords. They would operate in a lower cost environment and would be able to expand their rental holdings to serve a greater demand for rental housing. Correcting the unfairness will take action from many rental providers, tenants, and apartment owners associations. Support your associations to help the leadership address these and other key issues. Consider engaging your tenants with information to enlist them in the campaign for tax fairness, and overcome the decades-long tax inequity they’ve been subjected to by all levels of government. By John Dickie, President, CFAA


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gains tax. This would enable developers to compete for development land, and freeing them from the capital gains tax would draw out more rental supply, which would help moderate rents.

Inequity in treatment of imputed income The Canadian income tax system sometimes taxes imputed income. For example, if an employer provides a medical-dental-disability-life insurance package, some aspects of that package are reported as income, and taxed in the employee’s hand even though the employee never received any money; they received the financial benefit of their employer-provided benefit. Living rent free in owner-occupied housing is also a benefit, but it is not subject to income tax in Canada, even though it is taxed as imputed income in several European countries.

“Taxing capital gains upon the sale of a principal residence is the most logical way to equalize tax treatment if there is a societal goal to treat owners and rental properties the same...” The concept of imputed income can be difficult to understand. Suppose that an individual purchases rental property as an investment and rents it out. That individual is now a rental property owner who earns income through the monthly rent paid by the tenant. The property owner must pay taxes on the rental income, less any expenses. Now suppose the property owner decides to move into the home instead, thereby becoming an owner occupant. The property owner no longer receives rental payments, and is not earning taxable income. The owner of the home is in effect renting from himself, tax free. According to taxation theory, the non-cash benefit for the property owner in occupying the home instead of renting it out should be considered part of the owner’s net income. This income is imputed since no cash is changing hands, much like the benefits many employees receive from their employer. This imputed income (less applicable

22 | Nov/Dec 2020

expenses, such as mortgage interest, property taxes, utilities, etc.) should be taxed based on what the owner would have earned if the home was rented to a tenant. However, homeowners avoid this tax. “We have estimated that the subsidy to homeowners from the non-taxation of net imputed rental income is around $8 billion per year” said Clayton. “It provides a financial incentive for homeownership, which renters do not get.” There are two ways to eliminate the discrimination of imputed income – either remove the subsidy to homeowners by taxing the imputed income, or provide rental property owners with subsidies to balance out the difference. The former option is unlikely, as single-family property owners would balk at paying tax on something they’ve never paid tax on. Therefore, it would be more palatable to provide rental property owners with subsidies for providing residential rentals at any price point. From a policy perspective, a tax on imputed income could be imposed in a tax-neutral way. As a result, everyone’s income tax rates would go down by the amount that tax revenue would increase from the addition to the tax base. Economists are generally in favour of broader tax bases coupled with lower tax rates because they avoid economic distortions and maximize total income. That should be the case in this instance.

Conclusion Homeowners of single-family properties and condos receive many more tax advantages than renters and rental property owners. Multiresidential property owners pay, on average, more in property taxes, and are disadvantaged from a capital gains tax perspective when they try to sell or transfer their properties. At the same time, owner-occupiers do not have to pay taxes on the imputed income from living in their homes. There are different ways to equalize these discrepancies that would benefit both tenants and rental housing providers. Such changes would require determination on the part of various levels of government, but they would also eliminate tax practices that discriminate against tenants and owners of multi-residential housing.


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New rental applications – how to avoid a bad tenant By David Gargaro

All owners want good, long-term tenants. The more you have tenants who pay their rent regularly, maintain long tenancies, and behave well, the better your business will be overall, and the better your rental community will be. It’s even more important when times are tough, such as when the government imposes rent freezes and a moratorium on evictions during a pandemic. When tenants leave for whatever reason, you will have to engage in the process of verifying new rental applicants. What does the process of verifying new rental applicants involve? It requires collecting information to authenticate their identity, determine their financial situation (i.e., ability to pay rent), and check their references, including current and past landlords, their employer (or other sources of income), and their rent history. The main goals of verifying new rental applicants are to reduce the likelihood of renting to high-risk tenants and to protect against the loss of rental income. While a certified standard rental application does not exist, it should be possible to find a proper, well scrutinized application that follows legal guidelines. As an industry, it is imperative for its members to not stick with the status quo, and to

find and implement a rental application for the purposes of conducting an accurate assessment of a prospective tenant

Verification is time consuming The traditional method of trying to screen new tenants for your rental property is a timeconsuming process. Even if you have a few rental units being vacated each month, you might have to go through numerous rental applications to narrow down the number of prospects. It can take several hours per application to verify the applicant’s information, including phone calls to references and past landlords. This is more difficult and time-consuming during a pandemic, as some prospective tenants cannot meet in person to provide paperwork, and other people are not at their usual phone numbers to provide verification. Even prior to COVID-19, some rental property owners would only request basic information through their website and allow prospective tenants to do a viewing before completing the application. “It has required greater investigation of some applications in verifying their documents based on the program information at the time of application,” said Sheena Reyes Keslick, VP Operations, Mainstreet Equity Corp. “Mainstreet performs the industry routine background checks, including landlord verification, identification verification, credit report, and personal references.” Technology has helped to smooth out the tenant application and verification processes. Many property owners have put tenant applications online, so prospective renters do the work

24 | Nov/Dec 2020

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continued from page 24

themselves of entering their information into online forms. Landlords don’t have to read through paper applications. There are also integrated systems to help with the verification process, including tenant registries, credit checks (e.g., Equifax or TransUnion), and application histories.

strength including bank balance, income and payroll history, history of past rent payments and bill payments, and current debt payments.,” said Chad Guziewicz, Co-founder, Rentify. “It takes less than five minutes for a prospective tenant to fill out, and uses a secure bank integration to verify the information.”

“We rely on Rentify to provide us with a list of preselected applicants, as it improves the selection process,” said Jamie Troke, Property Manager, Ekort Property Management. “It’s a quick, easy, and efficient way to verify rental applicants. We’ve made it part of the application process, and won’t rent to a tenant who does not go through the process. This reduces the amount of paperwork to be filled out. Most importantly, as a manager, it’s important to me that income verification, credit check, landlord history, and tenant identity gets done.”

Inaccuracies and lies are a concern

Challenges related to verifying financial information Credit checks and credit reports have traditionally been an essential part of verifying the financial assets and capabilities of new rental applicants. However, the costs of doing a large number of credit checks can add up, and they are not perfect. They can also provide a false sense of security, as some tenants could have a good credit history but a bad rental history (and vice versa). “We don’t want to eliminate a prospective tenant who does not look great right away because of their credit history,” said Troke. “Some people don’t have credit card history, while a credit bureau might give a false impression of good credit.” A novel way to ensure that a new rental applicant’s financial information is accurate is to verify it from their bank statements. Rental property owners can use the applicant’s bank statements to determine if the potential tenant is currently paying their rent when it is due. That can also be used to break out payroll income, government income, and other sources. Being able to access this information would allow the rental property owner to check key information, such as their closing balance, monthly debt payments, and overdraft percentage and frequency.

The time required to collect a rental applicant’s information is a challenge, but there is also the issue of verifying its accuracy. Some prospective tenants will inflate their incomes or savings to make their financial situations sound better than it actually is. They might also be reluctant to give their payroll information for personal reasons or privacy concerns. There are also fraudsters who are experienced in lying on rental applications for the purpose of gaming the system to live rentfree in units for months at a time. Without having accurate ways to verify a new rental applicant’s information, the industry is largely at the mercy of the applicant’s (dis)honesty. Other people who are part of the application process can also make it difficult to collect accurate information on rental applicants. Landlord references might give a false impression of the tenant to help them or to get them out of their current apartment. Employers might give incomplete information about their employees to help them find a place to live. In truth, many people will stretch the truth, while others will flat out lie just to get or help someone be approved. “We have had issues in the past obtaining proper landlord references and employee references,” said Keslick. “We have received forged and fake employment contracts and pay stubs verifying work and often landlord references are close friends or family.”

“Rentify uses a rapid tenant verification process that confirms the new rental applicant’s financial

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Trying to verify the accuracy of information from new rental applicants by yourself is a challenge. If a prospective tenant wants to lie about their information, then it’s difficult to determine what’s true and what’s not. A research study conducted by Forrester and commissioned by TransUnion, which interviewed 153 property management organizations, found that 73 per cent of property managers did not find evidence of fraud until after a tenant moved in. Working with third parties and technologies designed to verify a tenant’s banking information, employment status, and rental history will help rental property owners filter out potentially fraudulent tenants.

The legalities of collecting personal information “The only way to ensure information is accurate is to verify it from the bank statement of the applicant,” said Guziewicz. People have a legal right to protect their personal information. There are several pieces of legislation that regulate the sharing of personal information. Under the Personal Information Protection and Electronic Documents Act (PIPEDA), a landlord should not disclose personal information to another landlord about a tenant’s income and credit history, because the other landlord should get the tenant’s consent and obtain that information on its own. Information about a tenant’s conduct and payment history during a previous tenancy can be disclosed with the tenant’s consent. “Presumably, if the tenant is putting the landlord down as a reference, they would consent to such disclosure,” said Mark W. Melchers, Partner, Cohen Highley LLP. “Valid consent requires that the person can reasonably be expected to understand the nature, purpose, and consequences of the disclosure.” There is also a regulation under the Ontario Human Rights Code that confirms that a landlord can request credit references and/or rental history information from a prospective tenant, and can request authorization to conduct credit checks. However, a landlord is only allowed to consider income information to assess a prospective tenant, if it is considered in combination with credit information, employment information, and information about the applicant’s rental history. If necessary, a landlord can require guarantee for the rent.

28 | Nov/Dec 2020

“Before collecting personal information about a prospective tenant, the landlord should get the person’s consent in writing, and only collect information that it reasonably needs to assess whether to accept the person as a tenant,” said Melchers. “In addition to income and credit information, this can include information about payment and conduct history during a previous tenancy, but again, consent is required to collect and use this information.” Rental property owners cannot collect some types of information about the rental applicant without their consent. For example, the prospective tenant’s previous landlord cannot provide any information about them to another party (including the potentially new landlord) without the applicant’s permission. As a result, it can be difficult for the rental property owner to determine if the new rental applicant would make a good tenant for their building. “Rentify addresses the legality of collecting an individual’s personal information by requiring the applicant to check a permission box that allows verification of references and a credit check,” said Guziewicz. “All applicant data is deleted after 30 days, and it only captures the information related to the applicant’s income as needed for verification. We have a full legal review from one of Canada’s top law firms confirming this process is legal, and superior in many ways, including it does not require a birth date or SIN and makes no mark on the credit score.”

Conclusion Rental housing providers are consistently challenged to find good, long-term tenants, especially during difficult financial times. That’s why it’s important to properly verify new rental applicants. Traditional verification methods can be time consuming, as some applicants will not want to share their information and there are legal hurdles to overcome. Fraud is one of the most common things a property manager can encounter. When vetting an applicant, it is essential to thoroughly investigate all suspicious information and cross-reference all information received. Taking shortcuts can cost thousands of dollars, and can lead to the costly eviction of a poorly vetted tenant. It’s a challenge for any rental housing provider, but an effective verification process is essential to a rental housing provider’s bottom line.


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Greater Toronto Area – Pricing trends CBRE Capital Markets – National Apartment Group | David Montressor, Executive Vice President

Following any economic downturn, price discovery is often a primary consideration for active investors. With heightened uncertainty around investment fundamentals, underwriting assumptions across all real estate asset classes came under serious scrutiny and purchasers re-evaluated their risk tolerances and return requirements. By the end of 2020, it has become clear that the multifamily sector has re-established its positive risk-reward profile and successfully countered the broader market trends. While sell-side activity contracted during Q2, the second half of the year brought a surge of transactions to markets across Canada. Concerns regarding employment, rent growth, and policy changes have been balanced by consistent rent collections, occupancy, and favourable positioning post-recovery. Multifamily assets have demonstrated their resiliency through short-term cashflow impacts and their longevity through a very positive sector outlook. As a result, price expectations have not differed greatly from preCOVID levels. In fact, pricing is now even higher compared to the pre-pandemic market for select properties and geographies. Given the signs of strength from multifamily fundamentals thus far, it appears as though the resolve from early investors has translated into a first mover advantage in remaining active during uncertain times. While a conventional pre-pandemic viewpoint was that multifamily cap rates had likely hit a practical floor, especially in the nation’s major markets, the sector is poised to break through previously accepted yield thresholds. The combined impact of favourable market conditions and new lows in borrowing costs suggests the sector could see further cap rate compression in the year ahead. Further insights on rents, vacancies, turnover, tenant preferences, transaction data, and pricing trends can be found in CBRE’s 2020 Multifamily Report. For access to the report, please reach out to any member of CBRE’s National Apartment Group.

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Rental housing 101 for government: Walking the walk instead of talking the talk

By David Lyman, Dickie & Lyman Lawyers LLP

Governments across Canada talk a good talk about wanting housing to be more affordable. But they don’t walk the walk. Rental housing is the most affordable housing, which houses most people with the lowest incomes. (Each year, about 1/3 of lowincome renters live in community housing, and 2/3 of them live in for-profit rental housing.) In recent years, there has been a growth in the number of renters with higher incomes, mostly in Toronto and Vancouver, where house prices are out of reach for most people. However, even including the latest renters in the income averages, the average renter household has an annual after-tax income of $52,200, whereas the average homeowner household has an annual aftertax income of $93,800. The 2020 Taxation Report spells out the three main ways in which most governments in Canada tax rental housing more than owneroccupied housing. Those tax rules mean that, through their rents, the lowest income people pay the highest rates of tax, or in fact, pay taxes that homeowners don’t pay at all. Government taxes and charges are a big factor explaining why rents are as high as they are. Governments happily load taxes and charges onto residential landlords, as if landlords have any revenue source to pay those taxes other than tenants. As a result, tenants ultimately pay the taxes and charges imposed on landlords and on rental housing properties.

32 | Nov/Dec 2020

Substantial development charges have been imposed for years, driving up the price of new housing. Community benefit charges are the latest new ploy to extract money that home buyers and tenants end up paying. On the rental side, COVID-19 has brought new cost burdens and revenue restrictions onto landlords. In Ontario and BC, rents have been frozen, while costs like property David Lyman, Partner, taxes and insurance Dickie & Lyman Lawyers, LLP roll ever upward. Landlords are required to provide enhanced cleaning, PPE, and hand sanitizer, and other maintenance costs increase, but rents are frozen. In many cases, rents could not and cannot be collected because of moratoriums on evictions, and badly targeted government support programs. CERB paid all eligible renters the same $2,000 every four weeks regardless of whether the person’s rent was $450 or $2,000. In Ontario, the Landlord and Tenant Board suffered from ridiculous backlogs even before COVID-19 struck, and its backlogs are still appalling. Some tenants, who are willing to abuse the system, have avoided paying $10,000 or


$12,000 of rent since March. Other tenants suffered from the poor targeting of CERB and other financial supports and could not pay their rents. Either way, landlords are carrying tenants, which means providing rental housing is less attractive as an investment. In my law practice, I have heard from many small landlords who say that when COVID-19 is over, they will sell their rental properties and never be a landlord again. I am sure that many other potential rental investors have decided that rental housing is not for them. That will mean fewer rental units are available and rents will be higher. Rental housing developers will face the same issue in raising capital from investors. The more governments impose tax and other burdens on rental housing providers, and the more progressive politicians criticize rental housing providers, the less willing investors will be to invest in rental housing assets. Less investment means less supply, which means higher market rents.

“Ah, but we can stop rents from going up with tighter rent control,� say the progressives. What a crock! Over the last four decades, Ontario, BC, and Quebec have seen what tight rent control really does: lower maintenance, low vacancy rates, low investment in major repairs and new rental development, and a deteriorating rental stock. Gunnar Myrdal, a famous progressive Swedish economist and Nobel Prize winner, said that, apart from bombing, the best way to destroy a city is through rent control. Governments need to straighten out their badly targeted, counter-productive and detrimental policies. They need to support rental housing, and facilitate rental investment and development, instead of criticizing rental housing providers for responding to market demand, and instead of taxing rental housing more than owneroccupied housing. Then they would be walking the walk on housing affordability, and on support for low-income people in Canada.

rentalhousingbusiness.ca | 33


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NOV/DEC 2020

How to maintain your access to CMHCinsured mortgage funds By John Dickie, CFAA President

As a result of CMHC’s mortgage insurance changes announced on May 28, rental housing providers need to take new steps if they want to maintain maximum access to CMHC insured funds. That key observation comes from the recent CFAA Mortgage Webinar which featured panelists Glenn Furlong, CMHC; Dan Dixon, The Minto Group; Evan Pawliuk, First National Financial LP; and mortgage brokers, Derek Townsend, Citifund Capital Corporation; and Rena Malkah, CYR Funding Inc. Dan Dixon led off by clarifying what it means to take equity out of rental housing. For CMHC, Glenn Furlong added more context saying, “… we routinely monitor and evaluate our insurance offerings and adjust, as needed … for example, because of changes in our operating environment or risks or trends in our portfolio. The use and purpose of insured financing has continuously evolved … since mortgage loan insurance was first introduced back in 1954.”

The new rule Glenn Furlong went on to state the new rule that CMHC insurance can no longer be used to insure funds which will be used to take equity out of rental housing, except for the first insured financing for a newly constructed rental building. Generally, insured funds must be used for permitted purposes, which include the purchase of rental housing, capital repairs to rental housing, and construction of new rental housing. In each case, the rental housing must be of two units or more, and located in Canada. A few other uses can be approved on a case by case basis.

Key implications The new rules have implications if rental housing providers want to retain the greatest possible access to insured funds, which come with a lower interest rate than uninsured (“conventional”) funds.

INSIDE THIS ISSUE Benjamin Tal’s Insights into the Economy Executive Roundtable

Operations Roundtable Evan Pawliuk explained that capital expenditure Technology Updates for financing needs to be planned and managed more COVID-19 and Beyond, carefully. You can no longer pay for capex with an equity injection, and then take that equity out at a later and award-winning time with insured funds. Instead if you want to include technology to improve your operations funding for capex in a CMHC-insured upward refinancing (or new loan) you need to: 1) do the capex first, and then borrow the money to pay for it; 2) take out the money and hold it to pay for capex over the next three years; or 3) borrow conventional funds and then replace that borrowing with insured funds. Derek Townsend explained a second key implication. On purchase, equity cannot be injected (to close the deal, or do renovations, for example), and later be taken out. Either bridge financing or conventional financing needs to be used if the funds in question are ever to be replaced with insured funds.

rentalhousingbusiness.ca | 35


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NATIONAL OUTLOOK Rena Malkah pointed out that conventional funds are always an option, either to fund a whole deal or to add a second mortgage. She noted that current interest rates are very low, and the interest rate differential is partly offset by saving the CMHC mortgage insurance fee. As well, the 75% loan to market value ratio available with conventional funds often works out to be a similar amount as CMHC’s 85% of lending value. In other cases, equity takes-outs cannot be done with insured funds. Those will interfere with the redeployment of funds from one Limited Partnership to another for new construction, or for portfolio expansion by overlapping but non-identical groups of owners. CFAA would like CMHC to provide more flexibility in the new rules in order to avoid that and other unintended consequences of the new rule. Please let CFAA know if you are blocked from accessing CMHCinsured funds due to the use of funds rules. E-mail admin@cfaa-fcapi.org, and CFAA will connect with you.

Benjamin Tal’s Insights into the Economy under COVID-19 This year, COVID-19 has presented rental housing providers with many challenges. It will present us with many more. What follows are key insights Benjamin Tal provided, as he led off CFAA’s Fall 2020 Webinar series, which replaced CFAA-Rental Housing Conference 2020. Benjamin Tal is Deputy Chief Economist at CIBC Capital Markets, a noted commentator on the Canadian real estate markets, and a big believer in purpose-built rental housing. Here are some of the highlights Benjamin provided. In dealing with COVID-19, the US has prioritized livelihoods, whereas Canada and Europe have prioritized lives. However, the fear factor was and is present in the US too. Minnesota and Wisconsin shut down at the same time, but one reopened a month later than the other. Despite that, consumer spending was practically identical in the two states for that month. Restaurants and bars were open in the one state, but hardly anyone went out. A key question is whether the fear factor will come back to COVID-19 hot spots in Ontario and elsewhere in Canada. In March and April, economists debated whether the recovery would be V shaped or L shaped. The verdict is in. For two-thirds of the economy the recovery has been V-shaped. Homes are selling, furniture is selling, and goods of all kinds are selling like hot cakes. But personal services, hospitality and travel are way down and show little sign of coming back up. For the services economy, the recovery is L-shaped. COVID-19 is also affecting high-income and low-income earners differently. Total consumer spending among high income people is down 10.5%, while for low-income people it is only down 3.5%. How is that spending being sustained among low-income earners (many of whom work in the personal service sector)? The answer is easy: CERB. This is the first recession in history in which total personal disposable income has gone up. And it has gone up a lot. Many people did not lose their jobs or their incomes, and many other people received more on CERB than Figure 1. Growth in Real Disposable Income - a Record high they had earned in the labour force! See Figure 1. The Canada Recovery Benefit (CRB) , which is replacing CERB, will continue that strong support for total disposable income for several more months, but at some point, that stimulus spending must be reduced. In the meantime, however, this has been the most real estate friendly recession in history. Real estate company shares and REIT units are down in the markets, but not asset prices. Apartment building prices and house prices are up, not down.

Source: Statistics Canada, CIBC

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NOV/DEC 2020

Every crisis is a trend accelerator. COVID-19 is no different in that respect. What trends is COVID-19 accelerating? Benjamin told us at his talk. If you want to find out, purchase access to the recordings!

Executive Roundtable: What opportunities do major rental housing providers see today? Rental housing providers currently face many risks and challenges, as well as having various opportunities. What follows are key insights provided at the Executive Roundtable held as part of CFAA’s Fall 2020 webinar series. The panelists on the Executive Roundtable were: Philip Fraser, President & Chief Executive Officer at Killam REIT; Anthony Lanni, Executive Vice President, Residential, at QuadReal; David Horwood, Vice President at The Effort Trust Company; and Glen MacMullin, Chief Investment Officer at Minto. As to risks, the panelists saw political risks as the most important. The office and industrial sectors are not subject to political risks, but rental housing certainly is. Will a new government make rent control tighter? Critically, in Ontario, will a government take away vacancy decontrol/recontrol? What about the costs and delays in bringing new rental supply to market? How are the panelists mitigating these risks? Three of the four operate across multiple provinces. All operate across different municipalities. That means negative rule changes do not affect their whole portfolio all at once. All of the four emphasized the need for rental providers to work with CFAA and the various provincial apartment associations to catch the ear of government, and protect the rental housing industry. As to opportunities, the panelists saw several. Anthony Lanni focused on providing better and more costeffective service through new technology, and on raising rents through providing better service. Anthony noted that in many US rental markets, purpose-built, professionally managed rental units command a premium rent over condo rentals. David Horwood saw opportunity in renting to households who choose to rent, rather than households who need to rent. On the other hand, Philip Fraser saw opportunities in reducing expenses. He cited geo-thermal energy and solar panels as new energy technologies which will cut costs, and increase the bottom line. All the panelists saw opportunities in intensifying rental sites. Sometimes, excess land can be had for practically nothing, along with high priced existing rental units, allowing new units to be added to existing rental complexes.

HOW TO FIND OUT MORE If you want to find out more details about the information covered in any of CFAA’s recent webinars, go to https://cfaa-fcapi.org/events-awards/webinars/ to purchase access to the recordings. CFAA Direct and Affiliate Members who want their preferred pricing need to email events@cfaa-fcapi.org before completing their registration, to obtain their discount code. Affiliate Members are members of CFAAmember associations.

Glen MacMullin cited unused parking stalls as a related opportunity. In some rental complexes, so much extra parking is available that no parking needs to be built for hundreds of new rentals units, thus saving up to $60,000 in construction costs per door. On the subject of net cap rates, the panelists were united. Low as cap rates are, all four panelists see them moving even lower, albeit only by 25 or 50 basis points (0.25% or 0.5%). What are the properties that have attracted the interest of major rental housing providers as buyers? The panelists told us at the Executive Roundtable. If you want to find out, purchase access to the recordings!

38 | Nov/Dec 2020


NATIONAL OUTLOOK Operations Roundtable: A tale of two cities within each city As a result of COVID-19, rental demand has followed two different paths. Rental demand is down for high-end apartments in the core of Canada’s major centres; whereas, so far, it is largely stable in suburban markets and in secondary and tertiary markets, except for those markets dependent on universities which have not returned to live instruction. Those observations come from the Operations Roundtable held as part of CFAA’s Fall 2020 webinar series. The panelists were Ruth Buckle, Senior Vice President, Property Management, at Killam REIT; John Loubser, Vice President, Operations at Timbercreek; Jonathan Brimmell, Director, Multi-Residential at Oxford Properties; and Kris Figurski, Regional Director for Canada East (Saskatchewan and Manitoba), at Weidner Apartment Homes. The panelists reported that rental demand is down significantly in the central areas of Halifax, Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver. Apart from high-end apartments, such as those aimed at empty nesters, rental demand is fairly solid in the suburbs of those cities, and in Winnipeg, Kelowna, Kamloops and many other secondary and tertiary markets. The markets in Regina and Saskatoon are fairly stable and consistent with the pre-COVID situation. Ruth Buckle reported that most of the universities in Atlantic Canada besides those in St John’s, NL, and in Halifax, had reopened for in-person instruction, which sustained student rental demand in many smaller markets. Besides commenting on the various rental markets, the panelists addressed operational risks facing rental housing providers. Not surprisingly, keeping employees and tenants safe is high on their lists. Kris Figurski shared the US experience in which some rental complexes have seen the entire operating staff and site office staff struck down by COVID-19. Various companies have now split their work forces to try to keep two halves separate to avoid that problem. To combat “COVID-19 fatigue” among tenants in problem buildings, John Loubser reported bringing in public health speakers (and even the Red Cross), and setting up tables in the lobbies, to give tenants the message that they have to wear masks and practice physical distancing. According to Jonathan Brimmell, Oxford Properties sees the economic slowdown as a chance to hire good people for the future. All the panelists see opportunity for the future in continuing to work remotely and to travel less, and in harnessing the power of technology to show and rent apartments remotely. If you want to find out more from the Operations Roundtable, purchase access to the recordings!

WANT TO STAY UP TO DATE WITH NATIONAL OUTLOOK? Sign-up for CFAA’s National Outlook e-newsletter to receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email communication@cfaa-fcapi.org to start receiving CFAA’s e-Newsletter today!

rentalhousingbusiness.ca | 39

rentalhousingbusiness.ca | |39 39 rentalhousingbusiness.ca


NOV/DEC 2020 Technology Updates for COVID-19 and beyond CFAA recently hosted a panel addressing technology updates, presenting different perspectives under the moderation of Darren Henry, of National Efficiency Systems. Dean Holmes from QuadReal represents a large owner-manager. Paul Smith from DMS is a fee manager with 60 separate clients, who have different tastes in reporting and technology use. Heather Brady from Yardi brought the perspective of a leading technology supplier. The initial COVID-19 lockdowns were a shock. Everyone had to make quick decisions every day to keep residents and employees safe, and their businesses operating. Rental providers were very open to sharing their thinking with one another, which helped the speedy adoption of best practices. At the beginning of the lock downs, rental housing providers all fretted about rent collection, but Dean found leasing to be the biggest pain point. At first, QuadReal stopped leasing apartments, but then they had their leasing people walk through vacant suites, showing them to prospects via Facetime. Or QuadReal gave a “poor man’s tour” by leaving the keys for a prospect to walk through a vacant suite themselves. Yardi, Property Vista and other suppliers offer automated and remote leasing packages, which can include sophisticated virtual tours. Many rental providers moved in that direction. QuadReal’s tenant portal was a lifesaver for them, despite the mixed tech fluency of residents and employees. The general fear of poor adoption at seniors’ buildings did not happen. Heather reported that Yardi found the biggest demand was for electronic rent payment, and dealing with and paying suppliers, without being at the office. The adoption of Client Relationship Management (CRM) products also took off, along with remote training tools. For Paul, a key adoption was a mobile app that allowed for two-way communication with tenants. He uses Yardi for the core accounting functions, but adds Property Vista modules to effect leasing, work order management and rent collection. Paul looked at the tools DMS already had in use at some properties, to expand their use to more properties. Even in these times, Paul’s view is that for new solutions, one needs to research the competing solutions carefully. For many applications, allowing three months of researching and deciding, and three months for implementation and training is still a realistic time frame. Everything takes longer than you think it will. In making choices, ensuring that the products provide adequate data security is important, along with compliance with the privacy legislation, PIPEDA [or its equivalent in BC, AB and QC], and CASL, Canada’s Anti-Spam Legislation. Another key for successful adoptions is good communication both up and down. QuadReal uses a panel of community managers to Beta test products, and advise on issues as they are adopted. The panel is composed of managers who are not the best at tech and not the weakest. DMS also has a few specific people designated to explore each new app. The panelists also discussed the use of all the data which the systems can generate. All agreed that the ideal output is a one-page report with one or two key graphics. However, though most rental providers want to employ IT people who can extract that information, the rental housing industry does not offer a career path for these specialists.

Here are the parting suggestions from the panelists: Paul: Search for the best products for your company and operation. Heather: Believe in yourself, and be good to yourself. Dean: You can’t do everything at once. Focus on a few things at a time.

40 | Nov/Dec 2020


NATIONAL OUTLOOK CFAA Rental Housing Awards for new ways to deal with COVID-19

CFAA announced the winners and finalists of all the CFAA Rental Housing Awards 2020 in June. This is a reminder of the winner and finalists for “New Product or Service of the Year”.

New Product or Service of the Year - Winner: Suite Turnover & Property Operations Software. COVID-19 Prevention Package by SuiteSpot Technology SuiteSpot’s Suite Turnover & Property Operations Software is designed for property managers who are constantly on the move, allowing them to access all the needed information at any time from any device. SuiteSpot’s recently released COVID-19 Prevention package builds on and enhances on existing features by aiding users in observing social distancing and other COVID-19 safety precautions.

New Product or Service of the Year - Finalists: ChatManaging by National Efficiency Systems ChatManaging is a Chatbot which uses artificial intelligence to engage in conversations with prospective tenants online, allowing for a 24/7 experience. The Chatbot gives prospective tenants instant answers at no cost in staff time, and then sends prequalified leads directly to a property’s inbox, simplifying the leasing process. Contactless Parcel Lockers by Snaile Snaile’s Contactless Parcel Lockers automate the process of receiving packages in mulit-residential buildings, without requiring any face-to-face contact with another person. The parcel lockers accept deliveries via a QR code scan, which generates a pickup notification that is sent to the resident either through text message or email. No human concierge is needed.

CFAA Rental Housing Compensation Survey 2019-2020 The only Canadian survey of rental housing employee compensation and benefits. Find out market compensation for all key positions in the sector, at the city or provincial level. To purchase the survey, e-mail admin@cfaafcapi.org. MOBILE FRIENDLY

Visit www.cfaa-fcapi.org for more information.

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RHB’s forum for rental housing associations to share news, events and industry information

Hot Topics: EOLO reports on the arguments EOLO used in changing an Ottawa City Council motion calling for a provincial eviction moratorium to a call for provincial financial support to enable all tenants to pay their rents. pg. 45 HDAA provides information on the proposed amalgamated City of Hamilton secondary suite by-law that is to replace the separate by-laws of the former area municipalities within the former Region of Hamilton-Wentworth. pg. 49 LPMA offers suggestions for avoiding slip and fall claims, and other winter maintenance tips. pg. 53 WRAMA thanks its outgoing President, Andrew Macallum, and outgoing administrator, Sandy Knapp, as well as pointing out the new LTB Rules of Procedure, which came into effect on December 1. pg. 57

The Member Associations


Canadian Federation of Apartment Associations Canada’s voice for the rental housing industry at the federal level

Join Canada’s leading rental housing providers, suppliers and industry associations.

Become a direct member of CFAA today!

Your support will help ensure our industry can achieve better tax and regulatory environment, increase in professionalism, and continue to grow for years to come.

Find out more about the benefits and costs of a CFAA membership. www.CFAA-FCAPI.org | admin@cfaa-fcapi.org


The debate about a renewed eviction ban By John Dickie, EOLO Chair In March, the Courts of Ontario shut down the eviction process. The Landlord and Tenant Board (LTB) also shut down its processes for most cases that could lead to a tenant eviction. While understandable from the perspective of the safety of enforcement officers and tenants, those decisions imposed considerable hardship on some rental housing providers. Particularly hard hit were landlords of one or two rental units whose tenants did not pay their rent, and the occasional larger landlord whose tenants went on a rent strike. While most renters continue to pay their rent, a number of tenants find themselves with significant arrears that continue to grow each month. In July, the courts moved to re-open the eviction process. However, tenant advocates opposed that move in court. The Federation of Rental-housing Providers of Ontario (FRPO) successfully argued in court that the eviction process should re-open, and it did re-open in August.

Tenant advocates’ arguments for a renewed eviction moratorium Since August, tenant advocates have argued for a renewed eviction moratorium. They argue as follows: • The Province of Ontario is currently experiencing a sharp increase in the number of COVID-19 cases with the onset of a second wave of the pandemic. • Tenants have experienced unprecedented job losses and loss of income due to continued challenges as a result of the COVID-19 crisis. • Housing stability is a critical tool to manage the pandemic. • In Ottawa, 2.5 per cent of rental households (approximately 3,200) have not been able to pay their rent over the past six months as a result of the economic shutdown and are at risk of eviction.

• There are 36,000 renter households in Ottawa who spend in excess of 30 per cent of their income on rent, and are at risk of losing their housing.

Arguments that the eviction process needs to continue to work In fact, the federal government income support programs have been so generous that total disposable income has gone up during the COVID-19 shutdown/recession, whereas it has gone down in every other recession in history. (For more on that point, see page 37 in National Outlook.) Recognizing that some low-income households may have missed out on those generous financial supports, the arguments that the eviction process needs to continue to work are the following. Landlords terminate tenancies for many reasons other than non-payment of rent, such as tenant behaviour which: • Seriously disturbs other tenants (such as failure to prepare for pest treatments, or excessive noise) • Harasses other tenants (including vulnerable tenants) • Constitutes an illegal act (such as drug offences, and theft of other tenants’ belongings or assaults on the premises) • Endangers the safety of other tenants (such as physically assaulting other tenants or the landlord, or disabling smoke alarms) Unlike the law of some other provinces and many other countries, Ontario law limits the ability of a property owner to end a tenancy. Ontario law does leave property owners with the right to occupy their property for their own use. As a result, other reasons for needing eviction orders are:

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• Enforcing agreements to terminate • Obtaining possession for personal use for a purchaser or continuing owner A non-trivial number of tenants are not paying their rent, not because they are unable to pay, but because they are refusing to pay. Some tenants are not paying because: • They have not had to, due to the emergency eviction ban and the slowness of the LTB in resuming hearings for eviction applications • They are saving their money to decide whether to walk out on their tenancy or to pay • They are hoping their landlord will be forced to “take a haircut” • They are contemplating moving away, and hope to keep the cash they have saved up, and avoid a judgment or order to pay • They expect to negotiate a deal because their landlord is desperate • They are politically motivated to force their landlord to behave right (i.e., give free rent) to tenants (who are oppressed) Is a rent strike helpful for poor tenants? In fact, for landlords to receive less rent from tenants who can pay makes it harder to accommodate tenants in genuine financial need, while maintaining the building and the necessary added services to reduce the spread of COVID-19 (such as extra cleaning Do tenants who have not paid and sanitizing, PPE, extra have the ability to pay? screening of employees and contractors, and hand We do not have as clear a situation sanitizer). in Ottawa to report, but one major landlord in London had this Not imposing an eviction experience. Thirty non-payment moratorium will not result of rent cases were called by the in many evictions. Instead, LTB for virtual hearings. Of the 30, not imposing a renewed 27 tenants paid their rent before moratorium will mostly the hearing, two paid after the result in the payment of hearing, and only one is going to the agreed rent by those the eviction process. Of the 30, refusing to pay. Landlords 97 per cent could pay, but weren’t do not want to evict tenants, paying. Only 3 per cent of tenants but landlords need the (one out of 30) may not have been realistic threat of eviction to able to pay. get refusing tenants to pay.

Arguments against an eviction moratorium in favour of people who “cannot pay” The Residential Tenancies Act already includes provisions that make an eviction moratorium unnecessary. The LTB orders for termination for non-payment always include provision for a tenant to pay and stay. The LTB encourages tenants and landlords to agree to payment plans to allow for arrears of rent to be made up over time. If a tenant and a landlord do not agree on a payment plan, the LTB will often impose a payment plan, which the LTB thinks the tenant should be able to follow. The Province has provided funding to the municipalities to support tenants who have no financial resources to pay their rent, and will otherwise see their tenancies terminated. The City of Ottawa has ample money to enable tenants in need to pay their rent. EOLO has provided notices that landlord can give their tenants about how to apply for that money. Government support is there for tenants. An eviction moratorium would be unfair to landlords. People who cannot pay are not allowed to walk out of a grocery store without paying for their groceries. People with a car loan are not allowed to keep their car and drive it without making payments. An eviction moratorium would mean people can use and benefit from the housing they occupy without paying. There is

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no logical or moral reason to force landlords to provide free housing, even temporarily, but that is what an eviction moratorium would amount to. For more details of the arguments against a renewed eviction moratorium, see the EOLO submission to Ottawa City Councillors available at www.EOLO.ca.

City of Ottawa motions On October 22, the City of Ottawa’s Community and Protective Services Committee (CPSC) considered a report on measures responding to COVID-19. Councillor McKenney introduced a motion calling on the Province to ban all residential rental evictions, except in case of threats to public safety, until the COVID-19 pandemic is effectively contained. The CPSC adopted that motion without hearing or considering the counter-arguments. EOLO learned of the motion and went to work. As a result, a revised motion was passed at City Council on October 28. It calls on the Province to: a) ensure tenants have the money to pay their rents; b) hold off on a social assistance clawback; and c) failing a) and b), bring in an eviction moratorium for tenants who lack the ability to pay their rent. The change that EOLO achieved in the motion puts the focus on government help to make sure low-income tenants can pay their rent. The change also means that if the motion were actually acted on (which is unlikely), then evictions could still continue for: • Bad behaviour

Effect of a City of Ottawa motion On its own, a City motion would not actually do anything because the eviction rules are within the Province’s jurisdiction, and the Province likely realizes the folly of reimposing an eviction ban. That is probably a major reason why there was no debate at CPSC about the wisdom of the motion. However, for landlords, it is important to stop or minimize such municipal motions to reduce the pressure on the Province to bring in a renewed eviction moratorium, across Ontario. Tenants who have failed to pay could present evidence to the LTB that they lack the ability to pay, but at least landlords could take them to the LTB. That would not be ideal, but it would be much better than not having any of those eviction grounds to work with.

Conclusion The likelihood of the Province of Ontario acting on the tenant advocates’ calls for a renewed eviction moratorium is low. EOLO understands that Steve Clark, Minister of Municipal Affairs and Housing, is dead set against any renewed eviction moratorium. EOLO and the landlord community hope that he and the Provincial Government will stay that course. At the same time, EOLO and the landlord community hope that the governments continue to provide financial support so tenants have the means to pay their rents, even if renewed lockdowns reduce their incomes.

• Agreements to terminate • Tenant notices of termination • Demolitions, conversions, and major repairs • Personal use • Refusal to pay

BECOME AN EOLO MEMBER NOW! EOLO invites Ottawa area landlords to join the organization. Have your interests and concerns heard, and benefit from EOLO’s support. As an EOLO member, you will be able to: • Receive

prompt emails of relevant City rule changes

• Attend

two networking receptions a year

• Attend

two free education events a year

Receive all 6 annual issues of RHB Magazine with current developments, City and provincial funding programs, and landlord-tenant laws.

To apply for membership, go to www.eolo.ca, download the membership application form and send it to us at the contact info on that website.

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PRESIDENT’S MESSAGE Contrary to our most optimistic hopes, it seems the pandemic is not losing any steam, and we are now in the midst of a streak that is showing our highest COVID-19 numbers to date. These record-breaking numbers are not what we would like to see coming into our coldest months. However, it seems the Province of Ontario is at the very least more hesitant to put in the same restrictions we had seen in March. A new colour-coded system has been introduced, and a regional approach will be taken to any closures and restrictions, which hopefully will see much less of an impact on our local economy. Unfortunately, Hamilton has seen some increases in our COVID-19 numbers; as of the time of writing, we have just been placed in the red zone. Our numbers are fortunately not as high as those reported in other regions of the province, such as Toronto, Peel, York and Ottawa, so we hope that we as a City can quickly get control of our increasing numbers and be taken out of the red zone. Further restrictions will severely hurt local businesses many of which have not been able to recover from the initial lockdown. There has been some good news about the development of an effective vaccine but it will be several months before we see anything hit the market. In the meantime, we will need to continue to hunker down and hope we can gain control over the numbers once again. - Arun Pathak, President

Zoning by-law amalgamation and secondary dwellings In 2001, the Hamilton-Wentworth Region amalgamated with the City of Hamilton, Stoney Creek, Ancaster, Dundas, Glanbrook, and Flamborough. Each of these areas came with their own by-laws causing there to be many discrepancies between the municipalities. Nineteen years later, these by-laws, have still not been unified. However, the City of Hamilton is finally preparing a new zoning by-law for the entire City, which would replace the zoning by-laws of the former municipalities. The last major component of this process is the Residential Zone project, which focuses on the urban area of Hamilton and is split into three stages. Stage 1 focuses on low density, Stage 2 on high density, and Stage 3 on medium density. The City is currently in the first phase of Stage 1, which deals with secondary dwellings.

One issue with the lack of amalgamation of the bylaws is that they did not coincide with the provincial guidelines with regard to secondary dwellings. When the Planning Act was amended through Bill 108, it came with the requirement to permit

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secondary dwellings. With the City amalgamating the by-laws and focusing on secondary dwellings in this current phase, hopefully this will bring the City more in line with provincial guidelines. The proposed zoning regulations would also expand the area of the City in which secondary dwellings would be allowed, which is a positive move. The City had held consultations and public meetings about this phase HDAA was able to get involved in some consultations where we learned about some of the requirements the City is hoping to impose on secondary dwellings. On a basic level, a secondary dwelling should contain its own bathroom, kitchen, and living area and be on the same lot as the main dwelling; it should also have its own entrance. Effectively, it should be a selfcontained and independent unit located on the same lot as the main dwelling. The City is proposing that secondary dwellings have a maximum unit size of 50 square metres. We know from other municipalities that this is likely to be too small, so we hope the City will revisit and increase and increases the size maximum. There will also be parking requirements with each secondary dwelling, and the City is currently not allowing tandem parking. This may pose issues in Hamilton, as many homes only have tandem parking or, in many cases in the downtown core, no parking at all. Fortunately, the City is aware of this problem and may impose different parking requirements for lower Hamilton. There will also be fire safety requirements, which include minimum setbacks and having unobstructed access to the secondary dwelling. There will also be restrictions on where you can build an entrance to a secondary dwelling. For example, you would not be able to build an additional entrance to the front of the existing home. Lower Hamilton may see a variance to this requirement. There are also guidelines on what types of structures can be converted to secondary dwellings, such as garages and larger sheds, as well as guidelines on building additions to the main dwelling to create a secondary dwelling.

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The City had their second virtual meeting on November 16 and will be closing their public survey on November 30. Thereafter, the City will be reviewing all comments and suggestions received, compiling a staff report to the Planning Committee, and preparing the final secondary dwelling regulations. At HDAA, we look forward to seeing what the City comes up with; hopefully they incorporate the suggestions and comments from involved parties. We have yet to see how this will be tied to the ongoing secondary suites pilot project or to licensing, but we hope to hear more news on both issues in the coming months.

Past Events October 7 – Bill 184 Webinar The HDAA welcomed back Mark Melchers from Cohen Highley for a webinar on Bill 184. Mark spoke to the legislative changes arising from Bill 184 and how they will affect housing providers and property managers. Changes of note include tenants’ needing to provide written notice to the LTB before raising concerns at an arrears hearing, the ability to collect arrears and other costs from a tenant after they move out of a unit, higher penalties for bad faith evictions, and the need to compensate tenants for more types of evictions.

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Mark also briefly spoke on the rent freeze for 2021 and what situations would not fall under this scenario, such as certain AGIs, as well as which units would be exempt from the rent freeze, such as homes for special care. Units that fell under the November 15, 2018 exemption are included in the rent freeze for 2021.

Upcoming events November 24 – Technology Solutions for a Pandemic The HDAA is excited to host a free member-only webinar on technology solutions for housing providers that will help them conduct their business virtually under our current pandemic climate. This webinar will discuss what software solutions are on the market, as well as how to go about marketing and advertising available units. December 8 – Latest Developments in Tenant Screening The HDAA is also excited to be hosting another free member-only webinar on the latest developments in tenant screening. Hear about some exciting new tenant screening products.

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PRESIDENT’S MESSAGE If you haven’t started preparing your properties for winter, it’s not too late. Here are a few tips for preventing damage: • Test smoke alarms and carbon monoxide detectors to confirm they’re working properly. Ensure furnace and dryer vents are kept clear of snow. • Winterize exterior faucets to prevent water from freezing in the line, which could lead to flooding when the ice begins to thaw. • Inspect roofs, soffits, and building exteriors to stay up to date on any issues. • Clean downspouts and eavestroughs of leaves, and clear leaves from the grounds. • Order salt in larger quantities so you won’t have a shortage later in the winter. • Keep sidewalks and roadways clear of snow and salted or sanded, and remove icicles where possible. Maintaining properties reduces emergency calls and protects investments. Being proactive also makes landlords’ lives easier in the winter and throughout the year.

- Shirley Criger, LPMA President

COMMONSENSE PRACTICES H E L P L A N D L O R D S AVO I D S L I P AND FALL CLAIMS With treacherous winter weather fast approaching, property owners will be reviewing their protocols to keep tenants safe from falls. Most owners have procedures to deal with the aftermath, but experts agree that prevention — coupled with insurance coverage — helps to decrease their liability. London lawyer Joe Hoffer says it’s important for landlords to have protocols that adhere to acceptable industry standards, such as ensuring that sidewalks, walkways, and driveways are properly cleared and salted, and that uneven sidewalks have been repaired. “All of those things are primarily the landlord’s responsibility, not the tenant’s,” Hoffer says.

M U LT I - R E S I D E N T I A L BUILDINGS Large landlords delegate the responsibility for outdoor maintenance to snow removal contractors. Once the snow is a specific depth, the contractor removes it and then salts and sands the surfaces. As proof of compliance, landlords need to inspect their properties regularly and keep a record of their inspections as well as any action they took to rectify problems, Hoffer says. Landlords should also verify that contractors have insurance and

that they keep a log book, provide a copy of it regularly to landlords, and follow accepted standards of care in how they carry out their responsibilities. If an individual slips and falls, that person will sue anyone who has insurance coverage, Hoffer says. The risk is spread beyond the landlord if the contractor has coverage.

Joe Hoffer

“It’s the combination of insurance and meeting those protocols where a landlord typically won’t be found liable for negligence if there is a slip and fall,” Hoffer says. For their part, tenants are obligated under the standard tenancy agreement, such as the one used by LPMA, to notify landlords of anything that requires maintenance and repair, including an uneven sidewalk. If a tenant makes a claim against a landlord, there could be a contributing negligence factor resulting from the tenant’s failure to notify the landlord, Hoffer says.

VIDEO EVIDENCE It’s beneficial for landlords to have video surveillance of common areas, including walkways and entries and exits, to capture an alleged slip and fall. What appears to be a straightforward

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incident could actually be the result of a tenant’s mobility problems or alcohol consumption. And even if it’s evident that the surface posed a hazard, a video record with clear evidence allows the parties to resolve the matter quickly, Hoffer says, and is unlikely to result in a lengthy legal battle over the true condition of the surface. Video evidence can also benefit property owners when their insurers are fighting to win or keep settlements to a minimum. “Video evidence plays a crucial role in helping insurance adjusters determine and argue against liability on behalf of the building owner or landlord,” says Josh Fentin, a commercial relationship manager with A.P. Reid Insurance.

PREVENTING INCIDENTS Fentin advises property owners to focus on prevention, create a training manual, train employees, and provide employees with incident report forms. Owners should also designate a trusted staff member, such as the building manager, to complete the incident report. The report should indicate where an employee was mopping, for example, the time of day, and where the safety signs were positioned. The report should also include photos depicting the scene. “Document the circumstances so that it does not allow for a ‘he said, she said’ situation down the road,” Fentin says. The incident report will be more consistent and verifiable if there is a procedure in place requiring staff members, every time they mop, to complete a log of when and where it was done and where the warning signs were placed. The same is true if site staff clear the entrance and smaller walkways of snow and disperse salt and sand, Fentin adds.

SLIP AND FALL CHRONOLOGY Following a slip and fall, the injured person should be taken care of medically, Fentin says. It’s helpful if he or she is willing to share details of what happened with the building manager, but a subjective viewpoint is less valuable than hard facts. It’s also important for the building manager not to admit to fault. The courts are more inclined to side with an injured person instead of the property owner, Fentin says, “so the more they can do to protect themselves and show what they’ve done to mitigate the risk, the better it will be in the long run.” The incident report should keep the information as simple as possible, including what the conditions were like at the time of the incident, whether it occurred on an incline or in a shaded area that ices over quickly, and if it was snowing or sunny. The report should also indicate when the snow removal contractors most recently removed snow, and salted and sanded the relevant areas, Fentin says. “Make sure that dates, times, and conditions are all noted on the incident report and make sure that’s filed away and kept indefinitely. And then notify the insurance agent or broker about the incident,” he advises. If an ambulance transported the injured person to hospital, the incident report should include the hospital records with the patient’s diagnosis and prognosis. Hoffer says that allows the insurers to determine liability and the amount of damages the individual may be entitled to as a result of the injury. Other mitigating circumstances will be taken into account, such as the individual’s alcohol consumption. The building manager should also photograph the area where the incident happened and recover the video immediately, Hoffer says. “Quite often, the video record, under privacy legislation and so on, is disposed of in a matter of days. It depends on the policy of the individual landlord so it’s key to gather as much of that information in real time and at the time because generally that sort of record will be looked on as much more reliable than people’s recall days or sometimes months or years later,” Hoffer says.

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Josh Fentin

Falls may not be reported for up to two years after the incident when the landlord receives a letter from the individual’s lawyer. Once landlords have been notified, they need to report it to their own insurer and the snow removal contractors so they can contact their insurer, Hoffer says.

SMALL LANDLORDS It’s common for tenants in a townhouse, duplex or single-family home to offer to shovel the snow, but a landlord could be found liable if the tenant didn’t shovel an icy sidewalk and slipped and fell, Hoffer says. That’s because landlords can’t contract out of their obligations. Under the Residential Tenancies Act (RTA), landlords are responsible for maintenance and repairs, and for complying with housing and safety standards. Small landlords can protect themselves by entering into a contract with tenants that is separate from the lease. The contract specifies that the tenant, as an independent contractor and not as an employee, agrees to remove the snow and that the landlord will pay the tenant. The tenant must also have liability insurance.

“Most small landlords do not enter into that type of an agreement but in order for a landlord to legally delegate those responsibilities to the tenant, they have to have that kind of an agreement in place,” Hoffer says. Landlords can further protect themselves by ensuring that tenants have tenant insurance. It will cover the landlord and the tenant if they’re sued by a third party who falls and claims to be injured. Tenant insurance will also protect landlords from steadily rising insurance costs, Hoffer says. Small landlords should also be able to demonstrate that they have joined a landlord association, such as LPMA, and learned the basics of property management.

I N S U R A N C E C O N S I D E R AT I O N S Fentin says property owners’ comfort level determines the amount of insurance they should buy. He suggests a minimum of $2 million for liability purposes, but stresses that owners should discuss the amount with their insurance broker. Overall, he recommends that property owners mitigate risk where possible and avoid making themselves the target of a lawsuit. “The frequency (of claims) is rising. These things come in waves and I would say the slip and fall claim and the cyber attack claim are two of the biggest threats that we see as an industry right now,” Fentin says.

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2020 Taxation Report

Understanding the inequities in the taxation of multi-residential properties


P R E S I D E N T ’ S M E S S A G E & WRAMA Board of Directors elections The WRAMA Board of Directors’ elections took place on Wednesday, November 11, 2020. The Board of Directors consists of volunteers who commit to serving the membership through WRAMA’s mission to support best practices in private residential rental provision.

WRAMA Board of Directors & Staff 2021 Thank you and Best Wishes to Sandy Knapp! The WRAMA Board of Directors wishes Sandy Knapp, WRAMA’s longtime administrator and membership coordinator, all the best as she takes on a new adventure in early 2021. Sandy has seen many, many changes with WRAMA over the years, from events and dinners held at the infamous Golf’s Steak House, to seeing different directors arrive and say goodbye, and to challenges faced by members ranging from tenant issues to property challenges. Sandy has offered to stay in her current role and help with the transition of responsibilities.

Sandy Knapp

Sandy, our members and directors are truly grateful for the efforts you have put in over the years to keep the association on track. Our sincerest thanks to you and all the best in 2021!

Administration - Sandy Knapp (to help with transition to new staff) Marketing Manager - Conner Godin Director - John Lawrence President - Vacant Director - Kirstin McCutcheon Past President - Lars Sterne Director - Peter Miller Vice President - James Craig Director - Veronika Mitchell Treasurer - George Dube Director - Julie Popesku Secretary - Darlene Rehman Director - Larry Smith The new Board of Directors will take effect on January 1, 2021.

Outgoing president’s message Andrew Macallum is completing his third and final term as president of the Waterloo Regional Apartment Management Association, representing rental housing providers and property managers across southwestern Ontario in Kitchener, Waterloo, Cambridge, Guelph, and the surrounding townships. Since 1989, WRAMA has provided a credible voice on issues impacting rental housing provision at a municipal level including City of Waterloo rental licensing, City of Cambridge water billing, Region of Waterloo property tax ratio fairness, student housing, and affordable housing initiatives, to name a few. He is principal at Management First Professional Property Management and yields over 18 years of experience as a rental housing owner and provider.

Andrew Macallum

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After serving as WRAMA president for the past three years, it is time to move on. I am proud of the work our Board of Directors has done during my term. I know that the WRAMA membership Catherine Fife, MPP Berry Vrbanovic, Mayor, can depend Waterloo City of Kitchener on them to continue being the credible voice for residential rental provision in and around the Waterloo Region.

Steve Clark, Ministry of Municipal Affairs and Housing

Advocacy is important, and we have been fortunate to sit at the table with local leadership, including the mayors of Kitchener, Cambridge, and Waterloo. We are grateful for having local councillors attend WRAMA Katryn McGarry, Mayor, CIty of Cambridge events and engage with our members. Asquith Allen, FRPO Director WRAMA continues to keep our community Policy & Regulatory Affairs informed to address challenges that impact residential rental provision, including the City of Waterloo licensing scheme, Region of Waterloo property tax ratios, and City of Cambridge water billing. I am committed to a peaceful transition of power and wish our Board of Directors all the best! I look forward to seeing you at WRAMA events in the future, but this time as a member.

Membership information Already a member? Membership renewal WRAMA members will receive a membership renewal notice via email as their membership anniversary date approaches. Please make sure to confirm your membership details and make payment when the notice is received. Want to become a member? Regular Membership: Regular Memberships are available to individuals or organizations who own or manage a residential property, or properties of any size. Associate Membership: Associate Memberships are available for industryrelated businesses that want to share WRAMA’s benefits and services. Associate Members enjoy all of our regular benefits and more. Visit www.wrama.com for more information. Need some help visit www.wrama.com/contact-us/.

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Impact of new legislation from the RTA & LTB By Darlene Rehman Regulation from Queen’s Park impacts smaller rental housing providers across Ontario disproportionally to larger REITs and rental housing. Here are some changes that add to the helplessness felt by “mom and pop” landlords in smaller population centres. 1.  Rules of Procedure: With new procedures come new rules, so take the time to familiarize yourselves on the LTB website. Here’s one change that the law firm Cohen Highley has pointed out: the email address for filing an application through the portal has changed (4.2): www.sjto.gov.ca/ltb/e-file. 2.  Guide to the RTA: This guide provides a brief overview for both landlords and tenants and takes the place of having to provide a brochure to each new tenant. 3. Practice Direction on Case Management Hearings: This video, phone or written hearing, to be used as a mediation before a hearing, is facilitated by an LTB Officer who is trained in dispute resolution. Attendance is required and both parties are expected to provide their evidence to each other and the LTB. The goal is for both parties to agree to a settlement. 4. Practice Direction on Evidence: To highlight one new rule: documentary evidence or photos are to be sent by the applicant to the respondent and to the Landlord and Tenant Board at least seven days of the hearing with the subject line: “EVIDENCE”, the file number and the hearing date. Respondents need to send and submit their documents and photos at least 5 days before the hearing. 5.  Guideline 1: Adjourning and Rescheduling Hearings: Rule 19.4 (sections 82 (1) and 87 (2) states that a tenant must provide a detailed description of each issue the tenant intends to raise during a landlord’s application regarding rent arrears and copies of pictures, documents

or other evidence must be received by the landlord and the LTB at least seven days before the hearing. However, a Board member could accept the tenant’s issues without evidence, although the landlord could request an adjournment. Allowing this loophole means a tenant could still use this strategy to delay proceedings, forcing undue hardship on the landlord. 6. Guideline 7: Relief from Eviction – Refusing or Delaying an Eviction: This mandate gives adjudicators not only the right to deny legal evictions to law abiding landlords but that they must not evict. In summary, this mandate prevents lawbreaking tenants from being evicted and facilitates delays for earned valid evictions. Here are just some of the qualifiers to refuse legal evictions: it would be unfair, price point, no one to assist them in seeking other accommodations, medical condition, tenant requires a five bedroom and none available, it would mean homelessness, municipal overcrowding legislation is a just minor violation. 7.  Guideline 11: Eviction for Failure to Pay Rent: Refusing or delaying eviction is at the discretion of the adjudicator in some cases. In other cases refusing or delaying eviction is mandatory. The tenant however will still be ordered to pay any arrears to the landlord. A payment schedule for the arrears may be imposed under section 204 as a condition of their continued tenancy. 8. Guideline 12: Eviction for Personal Use, Demolition, Repairs and Conversion: Changes to N12 & N13 applications are coming. For an eviction in bad faith, tenants must express their desire to re-occupy the unit in writing and must keep the landlord informed of their contact information during that time and must receive one month’s compensation plus they can end their tenancy with 10 days’ notice. Tenants have one year to file a complaint.

Discover the benefits of being a member of our association The mission of the Waterloo Regional Apartment Association is to actively and positively develop and sustain the integrity of its members’ business – the provision of private residential rental accommodation – in Waterloo , Kitchener, Cambridge, Guelph and surrounding areas. To view the full range of valuable property managment resources we offer to our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-748-0703.

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Final Take Away

Brought to you by Yardi Canada Ltd

How to supercharge property management with technology Peter Altobelli, Vice President, Yardi Canada LTD.

Waves of transformation are occurring in every aspect of our lives since the onset of the pandemic. Technology has played a key role in helping businesses through this challenging time. If you are currently running your property management business on an integrated cloud-based solution, then you are well under way to supercharging your business. But how do you know if you are maximizing the value that technology can bring to your company? Here are five ways to realize greater benefits with automation: • Get in the cloud • Augment your digital brand presence • Streamline leasing to a seamless experience • Maintain service level with portals • Strengthen your accounting

Get in the cloud Partner with a trusted cloud provider to power your software platform and allow you and your staff to work from anywhere, safely and securely. You can connect staff with a centralized database equipped to authorize remote users for real-time access via the Internet. They’ll be able to post real-time transactions, access up-to-the-minute reporting, and share files securely. And even better, you can stop worrying about system management and IT maintenance costs.

Augment your digital brand presence Let’s start with your company’s first impression on prospective renters. The 2020 Informa Canada Multi-Res Tenant Survey found that 74% of renters look at property management company websites when apartment hunting. The pandemic has amplified the importance of a digital presence as people turn to the web for alternative options to connect. A corporate website is a great way to get your property management business noticed by renters, as well as investors, property owners, and prospective employees. If your website is mobile-friendly, you’re even more likely to attract all of the above. Here are a few tips for increasing the effectiveness of your corporate website: • Show off your portfolio • Create and manage your landing pages • Make customizable calls to action and contact buttons • Pull in your property listings and map(s) of your properties • Set up portal login pages for residents and applicants

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Streamline leasing Online leasing has been gaining in popularity with the pandemic and is predicted to become a standard in the industry. From the time your prospects discover your properties online, it is crucial to convert that digital journey to a simplified and seamless end-to-end leasing experience. Online leasing with electronic signatures is faster and easier than printing documents and bringing prospects into the office. Good real estate software should include comprehensive online resident screening to find the most reliable renters, quickly and easily. Online leasing is a great way to gather more applications, including future renters who live out of town.

Maintain service levels with portals Once your new resident is moved in, it’s important to give them access to online portals to pay rent, request maintenance, and communicate with your office. Portals allow you to manage properties remotely and make payments and communication easy for you and your residents. Bear in mind CASL regulations; any good technology provider with a strong presence and knowledge of the Canadian market will provide solutions that will help you adhere to these laws.

Strengthen your accounting Automating AR/AP processes will allow your staff to accomplish the more perfunctory tasks with ease and fewer errors. From managing your payables, receivables, and general ledger to streamlining your invoice process with paperless processing, digitizing the accounting process can make a significant difference to your company in time and money savings.

Technology as a business strategy Innovation, especially during this time, is crucial to support and help fuel the economy. Technology has been the facilitator and backbone for every organization successfully navigating the pandemic. By weaving tech into your corporate strategy, you will be investing in an empowered team, streamlined operations, and greater visibility to make more strategic decisions.


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RHB Magazine Nov 2020  

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