VOL.9 NO.6 • JANUARY 2017
R E N TA L E X E C U T I V E S N AT I O N A L T H I N K TA N K
RENTT LOOKING BACK (& FORWARD)
AT ENERGY-SAVING INITIATIVES
BALANCING THE SCALES FOR SMALL LANDLORDS
FINANCING OPTIONS FOR ENERGY-EFFICIENT CAPITAL PROJECTS Canada’s #1, most widely read publication for Apartment Owners, Managers and Association Executives
From the Editor’s Desk
Co-founder, Director Juan Malvestitti email@example.com
’d like to take this opportunity to wish all RHB Magazine readers a happy and healthy new year. With all the negativity surrounding us, let’s try to bring some positive energy and feelings into the world. Say hello to your neighbours. ank a friend or family member for doing something nice. Pay a coﬀee forward. Pick up some trash for no reason other than making the world a cleaner place. e January issue of RHB Magazine features a RENTT panel that should be of great interest to landlords, particularly if you are planning to invest in energy-eﬃcient technology. Our panelists share their experiences with past energy-saving initiatives and projects, delving deep into their best (and worst) decisions in this realm. ey discuss the criteria that they would need to consider future purchases, the benefits of energy audits, the tenants’ experience and future plans. ere are some juicy details here, so make sure to give it a read. ere’s a lot of great content that will get you thinking this month. For example, this issue has an article on financing options for landlords who want to invest in energy-eﬃcient technology for their building. You can also learn about how to make the landlord-tenant relationship more equitable, particularly when dealing with the Landlord and Tenant Board. As always, have a read through CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. As you know, RHB Magazine is continually evolving and looking for ways to make the magazine even better for readers. For example, we are replacing “One Last ing” (this is its last issue) with a new feature called “e Final Spin.” Check out the details where you normally find “One Last ing” to get a taste of what’s to come. Of course, we always enjoy hearing from our readers, and we want to support two-way communication. If you have any comments or questions, send them to firstname.lastname@example.org. I look forward to hearing from you.
! e u s s i e h t y Enjo
Marc L. Côté email@example.com
Editorial David Gargaro firstname.lastname@example.org
Contributing Editor John Dickie, President, CFAA email@example.com
National Sales Executive Nishant Rai firstname.lastname@example.org
Design Maria Arangio
Oﬃce Manager Kayla Clark
Billing & Accounting 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 written permission from the publisher. P.O. Box 6967, Maple, ON L6A 1S7 416.236.7473 Produced in Canada
David Gargaro Senior Editor 4 | ja nuary 20 17
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VOL.9 NO.6 JANUARY 2017
the scales 26 Balancing for small landlords Small landlords need support from diﬀerent groups to level the playing field and create a more balanced landlord-tenant relationship.
On the cover:
options 30 Financing for energy-eﬃcient
Looking back (and forward) at energy-saving initiatives
capital projects ere are diﬀerent options to consider when financing energyeﬃciency projects, each with their own benefits and drawbacks.
35 National Outlook
Find out more about the CFAA Rental Housing Conference, the status and issues in marijuana legalization, the government's trial balloon about portable housing benefits, and what rental providers want in energy retrofit subsidies.
Regional Association Voice News and views from WRAMA, LPMA, HDAA and EOLO
One Last ing A summary of industry topics and headlines.
6 | january 2017
s this issue goes to press, rental providers are waiting eagerly to learn what programs will be included in the National Housing Strategy (NHS.) Will the NHS be more of what we have seen for years, or will it include transformative moves like a nation-wide portable housing benefit, or aﬀordable housing delivered by the private sector?
To promote the latter, CFAA took a leading role in the National Housing Collaborative (NHC.) e NHC is a group of associations representing for-profit and non-profit landlords, housing co-operatives, homebuilders, advocates for the homeless and charitable foundations. CFAA made sure the NHC, CMHC and key decision makers recognize that rental conditions are different in different provinces, and indeed within most provinces. Rents in large cities are often twice or three times as high as rents in New Brunswick or small town Quebec. That brings two consequences. New rental supply is needed in some areas but not others, and an equitable social assistance program, or poverty reduction program, needs to address those huge differences in rents (since rents consume a large part of the budget of low-income households). As a result, the NHC recommended the NHS include: • Developing a nation-wide broad-based, portable housing benefit for rental households. Housing benefits are a cost-eﬀective and equitable benefit that can be given quickly to low-income renters, and address the huge diﬀerences in market rents across Canada. • Maintaining the supply of rental housing that is aﬀordable, and increasing it through innovative equity or lending funds open to both social and for-profit housing providers, in the areas where new supply is needed. See the NHC’s open letter to Prime Minister Trudeau at nhc-cpl.ca. Most of the NHS is to be announced in Budget 2017, although some elements may follow in a national poverty reduction strategy next year. On another note, early bird registration is now open for CFAA Rental Housing Conference 2017, which is to take place at the Westin Prince Toronto on June 6, 7 and 8. June 6 will be the Building Innovations Tour, June 7 and 8 will be the education sessions, with the CFAA Awards Dinner on June 7, and Benjamin Tal’s economic update on June 8. RHC 2017 will feature keynote speakers, and more than 30 education sessions, covering rental investment, rental executive, marketing, leasing, human resources, employee management, IT and building science topics. Register now at www.CFAA-RHC.ca for early registration pricing!
John Dickie CFAA President 8 | j anu ary 2017
WATER MATRIX AD
In this issue... What rental 39 energy providers want in retrofit incentives e federal government is considering energy retrofit incentive programs.To find out what landlords want, CFAA polled a number of major landlords. See page 39 for the results.
CFAA Rental Housing Conference 2017 — Register now! Early bird registration for CFAA RHC is now open. Turn to page 35 for an early announcement of some of RHC 2017’s speakers and topics.
Marijuana Update — Leaving no stone unturned Marijuana legalization is complex.What will it mean for rental housing providers? See page 37 to find out what it may mean for you.
Portable housing benefits trial balloon
Minister Duclos’ oﬃce issued a trial balloon to gauge public opinion on PHBs. e public and experts weighed-in. Turn to page 41 to find out what they said.
NATIONAL OUTLOOK – DIGITAL EDITION available at www.cfaa-fcapi.org
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
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Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572
Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560
LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604.733.9440 Victoria Office P: 250-382-6324
Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224
London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999
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
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 $480 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.
R E N TA L E X E C U T I V E S N AT I O N A L T H I N K TA N K
RENTT LOOKING BACK (& FORWARD)
AT ENERGY-SAVING INITIATIVES In this month’s issue, we asked our esteemed RENTT (Rental Executives National Think Tank) panelists to share their experiences with past energy-saving initiatives. They evaluated and ranked their best and worst investments in energy-saving technologies and projects, and discussed the benefits related to performing an energy audit, criteria required to make a future investment, the tenants’ experience, and future plans. The goal was to gain a better understanding of where you—the building owner or property manager—should invest your time and money to improve your buildings’ energy efficiency and get the best return on investment.
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Jason Ashdown Founder and Chief Operating Officer, Skyline Group of Companies
Leslie Bessey President and Chief Operating Officer, Gateway Property Management
Randy Daiter Vice President, Residential Properties, M&R Property Management
Dennis Kalish General Manager, H&R Property Management Ltd.
rentalhousi ngbusi ness. ca | 1 5| rentalhousingbusiness.ca
RHB: Welcome, everyone, to RHB Magazine’s RENTT panel. Thank you for taking the time to participate and share your insights and experience. We are sure that our readers will learn a lot from your responses. Today we’d like to take a look back (and forward) at energy-saving initiatives. To begin, what energy-saving initiatives and purchases have you made for your buildings over the last five years?
Randy Daiter: To lower our hydro costs, we’ve installed submeters, CO2 sensors and controls in parking garages, time controls and sensors for exterior lighting, variable frequency drives on fans and HVAC pumps, ramp heating controls, optimized our chillers and scheduled the locker room exhaust fans. To reduce natural gas usage, we’ve replaced the buildings’ boilers, installed radiator heat reflectors, installed variable frequency drives on make-up air units and air handling units, replaced single-pane windows and wood balcony doors, upgraded roof insulation and insulated bare pipes, reduced parking garage heating set-points, and lowered the domestic hot water primary water temperature. To reduce water usage, we’ve installed ultra-low-flow toilets and shower heads, installed automatic pool covers, purchased front-loading washers, moved to low water landscaping with less irrigation, and launched a water-saving marketing campaign.
RHB: Wow, that is quite impressive. How about the rest of you? Dennis Kalish: We’ve taken on a number of projects in our buildings, such as retrofitting older toilets with low-flow toilets, retrofitting existing lighting with LED bulbs, installing energyefficient heating and domestic hot water boilers, installing energy-efficient booster pumps, replacing single-pane windows with double-glazed windows, and installing in-suite heat deflectors. Jason Ashdown: We’ve replaced lowflush toilets with even lower flush toilets, switched from incandescent to CFL to LED lighting, upgraded thousands of windows, installed rooftop solar PV systems on 60 buildings, and replaced refrigerators. We’ve also invested in combined heat and power systems, which took more than two years of product research and trials. Leslie Bessey: We’ve replaced light fixtures with LED fixtures in common
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areas, parkades, emergency exit lights and exterior HPS lighting, and replaced shower heads and toilets with low-flow fixtures. We’ve also installed energy-efficient condensing boilers and heating systems.
RHB: I see a lot of overlap in the projects and technologies you’ve implemented in your buildings. In your opinion, what has been your best energysaving initiative or purchase? Randy Daiter: Replacing single-pane windows with doubleglazed, argon-filled, low-e, air-tight windows and balcony doors has produced a number of benefits. It has resulted in savings on ongoing plaster and window repairs, produced double-digit cost savings and ROI, electrical savings in portable heaters and simple payback in approximately ten years. It has produced a number of qualitative benefits, such as improving tenant comfort by eliminating cold drafts and excess noise, reducing the need for portable electric heaters, and improving interior and exterior aesthetics, which all help to support our marketing efforts. It has also produced significant environmental benefits. We save 226,826 cubic metres of natural gas per year for a 20-storey building, and reduce greenhouse gases by 429 metric tonnes per year.
RHB: That’s quite impressive. Leslie, what about you?
Leslie Bessey: Several of the LED fixture replacements were very successful because the capital cost was largely covered by Hydro rebates and the electricity savings we realized immediately. LED lighting does not require maintenance and it has 100,000 hours of life expectancy. I am also very content with free installation of the low-flow shower heads, as it was an incentive from BC Hydro/Fortis BC.
Jason Ashdown: Lighting is simply a no brainer. Reducing the amount of kWh makes the math very simple. The paybacks are generally very short term so even if the technology changes quickly – which it does – there is little risk. Unless someone believes energy cost will be going down in the next two years.
Leslie Bessey: Several of the LED fixture replacements were very successful because the capital cost was largely covered by Hydro rebates and the electricity savings we realized immediately. LED lighting does not require maintenance and it has 100,000 hours of life expectancy. I am also very content with free installation of the low-flow shower heads, as it was an incentive from BC Hydro/Fortis BC. Dennis Kalish: The LED lighting retrofits were easy to install, reasonably priced and the savings are instant.
RHB: It sounds like you’ve had some success with your energysaving initiatives. Which project do you wish you would have done differently, or not at all, and why?
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Jason Ashdown: Well, I have been sold some snake oil in the past and that is why we always walk before we run – and pilot projects are a must to remove the risk of making a major mistake. But to answer the question, I would say gas line magnets, probably over 12 years ago, but someone actually successfully sold me on gas line magnets to align molecules of natural gas or something like that. I didn’t buy many, but I did buy some… ouch.
RHB: Wow, that is unfortunate. Dennis? Dennis Kalish: I’d say boiler retrofits. They are expensive, not as durable as the older boilers and I’m not so sure about the energy efficiency. I’d prefer installing the in-suite heat deflectors
Randy Daiter: The CO controls in the parking garage require ongoing maintenance of equipment and recertification. Also, unless the total roof area represents a significant portion of the building envelope, payback on extra insulation when replacing the roof is difficult to rationalize.
RENTT Panel Poll RHB Magazine surveyed the RENTT panel on how they would rate their energy-saving initiatives and purchases. We used a non-scientific method to assign points to each participantâ€™s answers and calculated a score out of 20.
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Leslie Bessey: Installing condensing boilers for the domestic hot water system, as it didn’t work as promised for the large multi-residential building. Installation of the kitchen faucet aerators gave us some trouble, as there were many complains from the tenants of not enough water flow required to wash their dishes, aerators getting plugged more often and more pressure on the tap’s control valves.
coloured refrigerators. The technology industry moves very fast and you have to keep up to the speed of ever changing technology. You must weed through the snake oil and make solid, fundamental choices with partners you can trust and rely on.
RHB: It sounds like you’ve all learned from experience about what works and what doesn’t. Let’s move on to energy audits. I believe that you’ve all had them done. After performing an energy audit, what initial benefits did you experience, or what results or information surprised you?
Randy Daiter: As utility costs continue to rise, simple payback of energy initiatives accelerates. We are still monitoring the results of radiator heat reflectors, which can produce 28 to 33 per cent savings.
Leslie Bessey: The definite benefit is saving in consumption, especially with replacing old style incandescent light exit signs with new LED exit signs. One surprise was that in all the calculations I had so far, window replacement did not have significant enough return on investment to proceed with project.
Dennis Kalish: We’ve been proactive when it comes to energy saving initiatives, but the suggestion to replace the booster pumps with energy efficient booster pumps surprised me.
Jason Ashdown: Most of our energy audits have been done internally around specific initiatives. The one item that continues to surprise me is the speed of technology and how quickly new technologies can emerge. Energy efficiency is something you have to constantly keep an eye on, and you can’t wait around for the next best thing, or you would still be using 60 watt light bulbs and avocado-
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RHB: That’s a good point.
RHB: All of you have experience with good and bad energy-saving initiatives. For future energy-saving initiatives or purchases, what would you need to see or receive to go ahead with it?
Leslie Bessey: The savings need to be significant and immediate. A change to a high efficiency boiler, for example, should only be considered if a boiler replacement is required. Also I am told the R&M on the high efficiency boilers is more over time and perhaps the most efficient is not the most cost effective.
Randy Daiter: Generally, attractive business fundamentals, such as simple payback, ROI and cash-flow implications, qualitative benefits, such as improved aesthetics, tenant comfort and/or marketing advantages, and environmental benefits, such as lower carbon footprint, are all taken into consideration.
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RHB: Good points. What about you, Jason? Dennis? Jason Ashdown: Conduct a pilot project or receive data and real-time information from one of my industry peers that I trust. Dennis Kalish: I’d want to see some form of incentive or rebate from the utility companies.
RHB: You know how investing in energy efficiency benefits your buildings and the bottom line. How have you observed tenants benefitting from an energy-saving initiative or purchase? Jason Ashdown: Tenants don’t necessarily benefit from all initiatives. I won’t say a tenant has a better shower with a lowflow shower head – but the planet benefits. Residents do however enjoy new refrigerators and windows very much. There are also many things a resident should appreciate but may not realize. That money saved on wasted energy can in many ways be reinvested back into the property. Money that literally goes out the window cannot and is no good to anyone. Randy Daiter: Overall, the upgrades have resulted in better tenant comfort and interior aesthetics.
Leslie Bessey: We need more public education in low-flow faucets and especially shower heads, as there is resistance with tenants for installation of these products. Anything that directly affects them is received with resistance. Energy efficient boilers are not noticed as the effect for tenants are not visible.
RHB: Are you looking at new technologies or conservation strategies for your portfolio over the next few years? If so, what are they? Randy Daiter: Future and emerging technology include cogeneration, geothermal, wind turbines, grey water and solar for exterior lighting and walkways or polemounted lighting. Leslie Bessey: We plan to continue using condensing boilers when existing boilers are due for replacement. Continue replacing common lights where existing are due for replacement. Use energy efficient/low-flow fixtures and low-flush toilets when they are due for replacement. Any other programs need to have some benefits for the landlord such as strong incentives and savings if we want to get clientsâ€™ approval.
Jason Ashdown: Skyline is working diligently to find cost-effective ways to reduce energy consumption and improve on-site energy creation. We have been working with both CHP and solar for several years and have aspirations to take an apartment building completely of grid, at least from a hydro point of view. This is not a simple task; we are working with our partner Anvil Crawler to make this happen. RHB: Thank you all for your insight and experience. rentalhousingbusiness.ca | 25
Where you own rental property in Canada can greatly affect your ability to make a living. Landlords in different provinces and municipalities have to deal with radically different markets and legislative environments. Many small landlords feel that the legal system (i.e., provincial Residential Tenancies Acts, Landlord and Tenant Board hearings) greatly favours tenants, which has made it difficult for them to succeed in the rental housing industry. Unlike large corporate rental property owners and managers, small landlords do not have the resources or knowledge to stay on top of legal issues, hire representation for LTB hearings or take on tenants who have learned to take advantage of the system. Some would rather sell their properties or take them off the market rather than continue fighting what they perceive to be an uphill battle. This will put an even greater strain on a difficult rental market, and reduce the pool of affordable accommodations. Small landlords need support from different groups to level the playing field and create a more balanced landlord-tenant relationship. 26 | januar y 201 7
Provincial legislators Every province has its own version of the Residential Tenancies Act (RTA), which outlines the rights and responsibilities of most landlords and tenants. Legislation covers issues such as ending the tenancy agreement, security deposits, inspections, health and safety standards, dealing with problems, and collecting arrears of rent. The RTA establishes the foundation for every aspect of the landlord-tenant relationship, so it should be as detailed, balanced and fair as possible. Determining whether provincial legislation is fair is relatively subjective, but some provinces (e.g., British Columbia, Alberta) do a better job of considering both landlords and tenants. For example, BCâ€™s Residential Tenancy Act and Manufactured Home Park Tenancy Act are viewed as relatively close in balancing both tenantsâ€™ and landlordsâ€™ rights and responsibilities. The primary reason is that BC landlord and tenant organizations spent more than three years in consulting with the provincial government in developing the legislation.
Then you have Ontario, where many landlords and landlord associations believe the RTA and the Ontario Landlord and Tenant Board (OLTB) both favour tenants. For example, rent increases are controlled for tenants who live in buildings that were built prior to 1991. Damage deposits are not allowed, so a landlord must deal with small claims court to collect for damages after a tenant has vacated the unit. The eviction process due to non-payment of rent is much slower and drawn out than in other provinces, which makes it a costly endeavour for landlords. “Landlords have limited rights in dealing with pets in Ontario,” said Larry Smith, Director, Waterloo Regional Apartment Management Association (WRAMA). “While the rental application allows asking if the tenant has a pet, there is limited control to remove a pet once the tenant has taken possession of the unit. Collection for damages from pets is also limited.”
Landlord Association (SKLA). “One of the common phrases I hear when I go to the Office of Residential Tenancies with concerns about favouritism is that a landlord is a professional and should know how to act in a hearing, know what to do in a hearing and be prepared, and they are held to a higher level than a tenant. Perhaps this is correct, we are a business, but many landlords never go to the ORT and have been landlords for many years so they do not know all they need to know.” Landlords have many issues with the LTB, such as lengthy delays in obtaining a hearing, process delays from tenants raising maintenance issues at the last minute without notice,
There are many ways the provincial government can make the RTA more equitable for all parties. For example, the government can tighten the laws to reduce the amount of leeway for different situations, such as the long time limits given to tenants in breach of the rental obligations. It can also make the eviction process more efficient by reducing the number of days from when the tenant is first late with their rental payments. Time delays in removing problem tenants causes difficulties for the landlord, as well as the other tenants. “Typically, the landlord ends up being three to four months in rent payment arrears and eviction allows the pain to cease with limited chance to collect large amounts owing,” added Smith. Landlord and Tenant Board The LTB serves to resolve disputes between landlords and tenants through mediation or adjudication. It also provides tenants and landlords with information about their rights under the RTA. Since the LTB operates under the rules of the RTA, there is some variance in its perceived effectiveness and fairness with respect to both parties. “Tenants state that provincial rental legislation favours landlords and landlords say it favours tenants,” said Chanda Lockhart, Saskatchewan
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extra time given to tenants in arrears to move out, disqualified applications for minor errors and more. Tenants also have access to free duty counsel service at hearings, so landlords without legal representation have to go up against taxpayerfunded lawyers. “BC operates on a single arbitrator basis, and there are about 30 arbitrators who hear about 18,000 cases a year,” said Al Kemp, Executive Director, Manufactured Home Park Owners Alliance of BC (MHPOA BC). “There needs to be more arbitrators, so that hearing wait times can be reduced. Currently it takes five to eight weeks to schedule a timesensitive hearing and six to eight months for a monetary or non-time-sensitive hearing.” Some LTBs need to find ways to streamline the entire process. For example, in Ontario, an eviction order cannot be sent to the sheriff for 11 days, and there can be delays with the sheriff. Having the order sent to the sheriff immediately, and holding enforcement until the 11 days have passed, is one way to reduce the amount of time spent on evictions. Landlords should also be able to use private bailiffs to enforce eviction orders, as is the case in BC and Alberta. Municipalities There is significant variance between how municipalities in different provinces (and within the same province) deal with tenants and landlords, and different aspects of the rental housing industry. For example, some cities ban secondary suites, while others permit secondary rentals with minimal to no regulation beyond building codes and fire prevention. “Similarly, attitudes toward tenants vary, primarily based on the political leanings of the municipal government,” said Kemp. “For example, Vancouver’s Council is decidedly left wing and devotes significant effort and money to the homeless, low income renters, etc. In contrast, Langford, one of Greater Victoria’s municipalities, is decidedly right wing and takes a much more balanced view of the housing spectrum.” Consider the issue of residential rental licensing. The City of Waterloo implemented a full regime of residential rental licensing for small landlords with three or fewer units. They excluded larger buildings because Ontario’s fire code is more stringent and covers guidelines. The City imposed fees of $300 to $500 per unit to fund and administer the program. It also used municipal tax funding to legally deal with private landlords that tried to fight the program. However, the municipalities of Kitchener, Guelph and Cambridge accepted that LTB guidelines are acceptable, and did not pursue rental licensing for small landlords.
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“The provincial culture has led to municipalities creating bylaws that attach fines or unpaid bills to property tax bills,” said Andrew McCallum, President, WRAMA. “For example, in Barrie, Ontario, an unpaid water bill is moved from being in the name of the tenant to the tax roll of the property owner left unpaid.” Landlord associations Landlord associations promote, educate and represent members of the residential rental housing industry. They do a lot of good things for their membership, such as lobby the government for positive changes, provide landlords with ongoing education through meetings, seminars and education sessions, and work with the LTB to make positive change. They’ve given the members a voice and have helped to bring about significant legislative change. “Landlord associations cannot educate the world but we start by informing our members of the issues, the way they need to be presented, and from the tenants’ point of view,” said Arun Pathak, President, Hamilton and District Apartment Association (HDAA). “Once our members are informed, we move on to politicians and community leaders. We also need to ensure that landlords are not doing stupid things that show us in a bad light.” Although landlord associations do a lot for the residential rental housing industry and their members, small (non-member) landlords don’t benefit as much. They have to represent themselves in front of the LTB, and often don’t have the knowledge or resources to adequately represent themselves. They are often overwhelmed and intimidated by the hearing process, especially since provincial legal aid clinics often provide free legal representation to tenants at the LTB. “A large corporate landlord can look after itself,” says Robert Gentile, President, QRLA. “But it’s an entirely different reality for small self-represented landlords who may not be able to afford legal help.” The Quinte Region Landlords Association (QRLA) has launched an innovative pilot project to address this inequity. In 2016, the association sent volunteers to staff an information table at a number of hearings, which were hosted by the Belleville Travelodge. They gave small landlords who were going into hearings free handouts that educated them about the process, answered their procedural questions, referred them to legal counsel, and offered moral support. “The success of this pilot project was beyond our expectations,” said Gentile. “Many landlords found it beneficial and thanked us for being there. The board adjudicator came
out to greet us on two occasions, welcomed us as part of the process, and invited us to observe the hearings.” Landlords Small landlords hold their fate in their own hands. They do have to deal with a degree of legislative unfairness, as well as a lack of resources. However, they can do more to level the playing field and give themselves a better chance at running a profitable business, overcome any legal issues and get a fair ruling at the LTB.
and the LTB can make the hearing process more equitable. However, landlord associations can also get more involved in helping the more vulnerable members of the residential rental housing industry, and landlords can do more to help themselves. By David Gargaro, in collaboration with Al Kemp, Chanda Lockhart, Andrew McCallum, Larry Smith, Arun Pathak and Robert Gentile
Landlord associations are available across the country, as well as online. Landlords can join or visit their local landlord association, and get the support they need. Access to information and legal advice is just a call or click away. As a business owner, it is the landlord’s responsibility to familiarize themselves with the RTA, as well as the documentation and procedures required to run their business, engage in legal proceedings, evict tenants and so on. Knowledge of the system in which they operate is one of the best approaches to being a successful landlord, particularly if the municipality or province is “tenantbiased.” “Education is key, so take workshops and courses, and read online,” said Lockhart. “Take the time to educate yourself about being a landlord, as it is not just about rent collection and maintenance.” It is also the landlord’s responsibility to positively represent the rental housing industry, and avoid situations that put them (and the industry) in a negative light. This means operating ethically and responsibly, providing a safe and clean living environment, abiding by tenancy legislation and operating their business like a business – which is the business of providing people with homes. Conclusion Small landlords have to deal with a lot of challenges in running their business. When dealing with problem tenants, they face obstacles at the provincial and municipal level, as well as when they are in front of the LTB. Provincial and municipal legislators can do more to level the landlord-tenant playing field,
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It makes a lot of financial sense to upgrade your buildings with energy-efficient technologies and systems. They reduce your utility costs over the short and long term, improve your environmental footprint, and help with attracting and retaining tenants. However, as with any capital expenditure or equipment upgrade, there can be significant upfront costs. Even when you plan for these types of projects, you might not have access to the necessary funds to cover all the expenses.
That’s where external sources of financing can help with bridging the gap between planning and reality. There are different options to consider when financing energy-efficiency projects, each with their own benefits and drawbacks. It’s best to understand your options before investing in the next big building upgrade. Government incentives Government incentives are available in some jurisdictions, and can also be blended with private financing. You can apply for government incentives to fund a portion of your energy efficiency capital expenditures. Many utilities offer incentives to cover different aspects of your project, such as performing the energy audit, purchasing equipment and materials (e.g., LED bulbs, low-flow toilets), and doing the actual work. Contact your local distribution company to determine what incentives are available. “There are government grants and incentives available for most energy-efficient projects and technologies,” said John Robinson, Partner, R.H. Shergold and Associates. “Make sure to apply for funding before starting any project to determine if you qualify. I would recommend that you get independent 30 | jan uary 2017
advice from third-party companies or peers to find the best options when developing an overall energy plan.” The only real downside to some government incentives for your energy-efficient projects stems from the guidelines and limitations associated with qualifying for those incentives. The government programs focus on energy savings achieved (such as kilowatt-hours saved) rather than your return on investment. As a result, there can be times when you are a good fit for the new technology, but a poor candidate for the incentive. For example, there are great government incentives for cogeneration projects, but other energy-efficient technologies might provide shorter ROI. Debt financing Banks and other financial lending institutions have traditionally served as the first option for building owners who want to fund their capital projects, including energy-efficient upgrades and technologies. Basically, you would take out a loan to finance your purchases, and pay off the principal and interest over an agreed upon period.
Given today’s continued low interest rates, taking out a loan is an inexpensive financing option. However, the loan sits on your balance sheet and reduces your ability to borrow when the situation arises (as you’ve already borrowed money).
“A traditional loan is the cheapest financing option but transaction costs can be high and there is no performance guarantee,” said Allison Annesley, Vice President, Energy Solutions, Efficiency Capital Corp. “The focus is your ability to pay, rather than whether your project is successful.”
protects your reserves and borrowing power, thereby enabling you to access capital and financing when necessary. Much like leasing, you get the tax advantage of equipment depreciation. “The primary focus with performance contracting is achieving maximum energy savings,” said Annesley. “Our contracts include third party insurance for the expected savings, which acts as a performance guarantee. When targets are met or exceeded, it’s a successful project for everyone. Your
Equipment leasing Equipment leasing is an alternative to buying the equipment outright. It allows you to make your building more energy efficient without having to tie up capital and invest in purchasing the equipment. In essence, you can try before you buy, and it provides tax advantages from equipment expense depreciation. When hiring a company to do capital upgrades, or when purchasing any type of equipment, your focus should include finding reputable equipment manufacturers and installers, as well as ensuring that the equipment will meet your needs.
“However, if your project fails to achieve energy savings performance targets, you’ll still be on the hook for those regular payments with a lease,” said Annesley. “You also have to ensure that the payments over the financing term are less than your expected energy savings.” Performance contracting Performance contracting is a non-debt, off-balance sheet financing option. This method enables you to pay for energyefficient building upgrades through future utility volume savings. There are no upfront capital requirements, which rental hous ingbusine ss.c a | 31
payments never exceed your verified utility volume savings and the engineers we work with are financially liable for meeting the savings targets they set.” Performance contracting typically requires minimum spending thresholds, as well as minimum energy savings. Therefore, your project or building might not qualify. Also, because you don’t technically own the equipment, you share the energy savings with the company. There are fewer problems with not owning the equipment, but there are also fewer overall financial benefits over the long term. Conclusion As you can see, there are several options available to finance the purchase of your energy efficient projects and equipment. There is no “one-size-fits-all” solution for every building or project. Financing comes in different forms, and different situations require different solutions. Government incentives and rebates should almost always be part of your overall energy plan. Before taking any steps, make sure to do your research to identify the benefits and drawbacks of any particular financing plan for your specific needs.
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“Before starting any large undertaking, reach out to get advice from industry contacts who have done the same work,” said Robinson. “Get independent advice so that you can maximize the money you spend on your energy efficiency projects to get the best return on investment.”
By David Gargaro, in collaboration with Allison Annesley of Efficiency Capital Corp. and John Robinson of R.H. Shergold & Associates
CFAA Rental Housing Conference 2017 – Register now! CFAA will present Rental Housing Conference 2017 on June 6, 7 and 8 at the Westin Prince Hotel in Toronto. Again this year, the Conference will address the current issues of most concern to rental housing providers of all sizes, with speakers from the leading companies and REITs, and experts from professional firms and industry suppliers. New this year will be sessions on: • Airbnb issues for small and large landlords • Marketing automation • The connected landlord: apps for success • Rental development: what’s new? • How cities see us? Can we improve their perception? • Steps to success: crucial learning from industry veterans. Streams and round tables will address: • Rental marketing • Rental Operations • Information Technology • Human Resources Other streams will cover: • Investment topics • Executive development • Leasing • Building Science
Benjamin Tal will speak on June 8 to give his economic update, 6 months into the Trump Presidency. Other prominent speakers will include: • Kris Boyce, Greenwin • Ruth Buckle, Killam REIT • Alf Hendry, Homestead • Jeremy Jackson, Killam REIT • Mark Kenney, CAPREIT • Trish MacPherson, CAPREIT • Amanda Mitchell, Minto • Matthew Organ, Skyline • Jose Rivera, CAPREIT • BJ Santavy, Skyline • Scott Topping, Homestead CFAA Awards Program CFAA is presenting its Rental Housing Awards as part of the conference. Pre-register to receive the Awards Application package by emailing email@example.com, or watch cfaafcapi.org for details.
For the best pricing, register now at www.CFAA-RHC.ca
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Marijuana Update – leaving no stone unturned Rental providers are concerned about the upcoming reforms Canada’s marijuana laws. Will tenants be allowed to smoke weed anywhere anytime regardless of whether it interferes with other tenants? Will tenants be allowed to grow marijuana triggering remediation obligations for property owners? What impact will the new laws have on property insurance? Who will decide those issues? This report sets out the background to the marijuana legalization issue, what the federal government’s Task Force has recommended and landlords’ concerns. The sidebar provides deep background on the legalization issues, and why they are complex. Background and Task Force recommendations In the 2015 federal election campaign, the Liberals promised to legalize the consumption of marijuana for recreational purposes. (The use of medical marijuana was already legal by various court decisions under the Charter of Rights.) The government appointed a Task Force on Marijuana Legalization and Regulation (the “Task Force”) which has just released its report. Among other measures, the report calls for: • Measures to enhance public education about the harms and risks of marijuana consumption • Measures to limit youth access to marijuana • Establishment of a strict, well-regulated system for the production and distribution of marijuana, thereby addressing concerns about the quality, safety and potency of marijuana legally available, and the control of access for those eligible to possess it. • Cultivation for personal use in residences (both owneroccupied and rented), limited to four plants of not more than one meter in height. (This is to parallel the current rules permitting the home brewing of alcohol, and home growing of limited amounts of tobacco, for personal use) • A prohibition on dangerous manufacturing processes in homes, such as the manufacture of concentrates using volatile solvents or chemicals. • Continued enforcement of laws and sanctions against possession, production, and distribution of marijuana outside the regulated legal framework.
Why marijuana legalization is complex • Marijuana is classified as a narcotic, subject to international restrictions • Marijuana has both medical and recreational uses • The rules around smoking tobacco in rental property are unsettled and changing • The marijuana issues involve all three orders of government - The federal parliament makes criminal law - The provincial legislatures make landlord-tenant law, insurance law, and human rights law, and can ban smoking tobacco - The municipalities regulate land use, enforces building codes, mandate MGO remediation and can ban smoking tobacco • The courts are engaged under the Canadian Charter of Rights and Freedoms - The courts have already struck down two federal attempts to regulate marijuana for medical purposes • The recreational use and distribution of marijuana has been treated as a crime for 85 years - Many officials are deeply biased against permitting free use of marijuana - Many people have trouble distinguishing between the effects of marijuana production when it is illegal (and brings in organized crime and criminal violence), and marijuana production when it is legal (or even protected as a medical item) • Landlord-tenant rules are normally matters of provincial jurisdiction (and somewhat different rules apply in different provinces). Provincial rules regulate - the requirement and ability of landlords to prevent interference by tenants with other tenants’ reasonable enjoyment - rules for preventing property damage by tenants, or recovering the cost of repairing damage - rules for evicting tenants for illegal acts - rules for evicting tenants for violating leases • There are numerous municipal by-laws which apply to property use and the remediation of marijuana grow-ops (MGOs) • The provincial Human Rights Codes apply to accommodation of persons with disabilities, and people who need marijuana for medical purposes often fall within the category of disabled person, who need to be accommodated
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electrical outlets for safety sake and will also increase power consumption (which may be paid by the landlord.) 4. The impact of marijuana smoke on tenants in adjacent units, especially if the landlord is trying to provide a smoke-free building. The federal Task Force notes that most of the concerns arise from the experience with large-scale illegal marijuana grow operations. As to the impact of marijuana smoke, tobacco smoke also impacts neighbouring tenants, and landlords have significant ability to deal with that even though smoking tobacco is generally legal. The Task Force recommends that smoking marijuana be banned wherever smoking tobacco is banned. Rental housing provider preferences Many landlords would prefer: Concerns of rental housing providers Rental housing providers are concerned about the impact of marijuana production and consumption on their buildings, for the following reasons: 1. Marijuana plants produce seven to 10 times as much moisture as ordinary houseplants. For medical uses the courts see adding “point source ventilation” as an issue that “can be handled without undue difficulty or complexity” (Allard v. Canada, 2016 FC 236, p. 43.) Damage to buildings can easily occur due to mold, and building owners are required to remediate under municipal bylaws about marijuana grow operations (MGOs). 2. Insurance may not cover damage due to marijuana production, since many (more economical) property insurance policies do not cover damage due to illegal activity. This issue will be mitigated in that if limited marijuana production for personal or medical use is made legal, then the policy exclusions about illegal acts will not apply unless there are violations of valid municipal bylaws, and perhaps not even then. 3. Enhanced marijuana plant growth in Canada benefits from additional light sources, which may require additional
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1. No home growing of marijuana, or at least no home-growing inside any rental building. 2. If home-growing in rental units is allowed, then no homegrowing without the landlord’s consent, or at least the landlord’s knowledge. 3. The ability to terminate tenancies to prevent and stop interference by marijuana smokers or producers with the reasonable enjoyment of other tenants. Issues 1 and 2 are largely federal, but may involve the provinces and municipalities. Issue 3 is largely a question of the provincial laws on landlordtenant rights; and for medical users, the interaction of landlord-tenant law and the Human Rights Codes (which protect and shelter people with disabilities, such as diseases for which marijuana is a prescribed medication.) CFAA will make a submission to the agencies of the federal government which are charged with responding to the Report of the Task Force by creating new federal legislation. Those agencies are the Health Department, the Attorney General of Canada and the Ministry of Public Safety. CFAA may also take further steps to lobby about the legislation to be introduced in about April 2017. (Continued on next page)
Since many issues which will be governed by the residential tenancy law of each province, or by city bylaws, CFAA will seek to assist each member association to provide the best provincial and municipal input with the least effort, while encouraging common positions. CFAA may also be able to advance the interests of rental providers through interaction with other national associations such as the Federation of Canadian Municipalities and the Insurance Bureau of Canada. Please feel free to send your views on marijuana issues to CFAA by e-mailing firstname.lastname@example.org.
What rental providers want in energy retrofit incentives The federal government is considering energy retrofit incentive programs to achieve greenhouse gas reductions and energy savings for rental providers and tenants. In order to make our submission to the government, CFAA polled a number of major landlords to find out what they want to see in energy retrofit incentive programs. Many of the suggestions would also be important for small scale landlords. Here is what we heard. Overall issues • Rebates work best when distributors and contractors can handle the entire process and use the rebates as added value in their offerings. • Processes should be as easy and streamlined as possible to minimize the demand on applicants. • Avoid frequent program turnover, and programs which end unexpectedly or don’t look far enough ahead. Communications • Clear, timely communication is important. (We often hear
about programs – new programs, changes to programs, end dates for programs - from industry contacts rather than through program providers.) • Clear communication of program details is required to optimize program use. Projects which could have benefited from a program may fail to go ahead if project managers are not aware of the full benefit available. • Alternate pathways are useful, especially if they are communicated well. Timing issues • Whenever possible use one-time (single) application, rather than multi-stage application process. • Retroactive applications accepted, rather than being paced by pre-approval process. • Minimal lead time for application approval • Quick funding payout • Commit to turnaround times and meet the time commitments. Quantum issues • Avoid incentives that are too low or have too many program restrictions. • The easiest programs to participate in often provide lower incentives. The larger incentives usually have a more rigorous application process to ensure incentive programs are not being abused. Many rental providers do not want programs to be simplified at the expense of the amount of the incentive. • Programs with no upfront cost allow for quick adoption. Flexibility and alternate pathways • Flexibility to select an appropriate product avoids concerns about the quality of the product or its suitability for the property. Where a program prescribes specific products, provisions should be in place to allow other products which will perform the same or better to be accepted. • Offer both prescriptive (quick and easy) programs, and
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custom programs based on performance requirements (to support other - possibly newer – technologies which can also meet the program objectives). • Provide alternate pathways. For example: - Sometimes removal and disposal records are not available. Program designers should be aware of this point and provide an alternative such as a letter template which can be signed and provided in place of a formal disposal record. Ontario’s SaveOnEnergy programs have this option. - Some programs require third party involvement to qualify for incentives. Alternative pathways would allow organizations which have the in-house expertise to complete these tasks, along with a process for holding those parties accountable (for example with the stamp of a professional engineer). Other program design issues • Use prescriptive incentives for standard retrofits (lighting, motors, E-star appliances, low-flow toilets, etc.) • Use custom incentives for performance based initiatives (BAS, VFD controlled ventilation/pumping, motion-controlled lighting, etc.) • Use incentive streams, rather than loan structures, to assist with large capital investment projects leading to energy/demand savings (windows, EIFS, CHP, heat fuelswitching, etc.) • Provide certainty that incentives will still be available when the project is complete or the incentives can be applied for. • Support project planning and budgeting activities by providing certainty regarding the incentive amount.
Other program implementation issues • Avoid forms and portals which are difficult to work with (e.g., too complex, poor guidance, poor navigation, slow to move through or upload to) or that require the same information to be provided more than once. • Having knowledgeable, helpful staff available at the incentive provider to support the program will make it more effective. Having the option to deal with a human being is a plus. Target areas Incentives that help in the areas listed below would be particularly beneficial. • Insulation • Window replacement • Boiler upgrades • Programmable/smart thermostats • Heating system conversions • Lighting initiatives • Supporting the implementation of sub-metering Conclusion CFAA communicated these suggestions to the government. It may be the federal government will work with the provinces to stack incentives with provincial programs, where those are working well. That would mean one set of paperwork will serve to access two incentive programs. The federal Budget, due in late February or March, is likely to include funding for energy retrofit incentives. The exact nature of the programs to be supported will likely be addressed after the Budget decisions are announced. CFAA takes the rental industry’s concerns to the government to seek programs that provide worthwhile incentives, with a minimum of red tape.
• Allow exceptions to program rules where variations support the program objectives.
Please feel free to send your views on energy retrofit issues to CFAA by e-mailing email@example.com.
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Portable housing benefits trial balloon In the November issue, this magazine reported extensively on what CFAA and rental providers want in the new National Housing Strategy. The foremost innovation is a nation-wide portable housing benefit for low-income renters faced with high accommodation costs. Also reported were what CMHC and Minister Duclos heard in the consultation.
CFAA and our member associations are all in favour of portable housing benefits as the best and most cost-effective way to provide housing help to low-income people. We write on the subject frequently since portable housing benefits are not widely used in Canada yet, and they do not have a strong constituency promoting them.
In mid-January, Minister Duclos’ office released a trial balloon to see how the public reacted to the idea of a portable housing benefit (PHB).
Two-thirds of people in core housing need rent in the private rental market, receiving no housing–specific help, whereas one third live in social housing receiving very deep subsidies. The cost effective way to help more people is to use portable housing benefits to help them pay their rent where they live now.
Officials provided information the Canadian Press (CP). Unfortunately, CP interviewed the President of the Federation of Canadian Municipalities (FCM.) FCM’s support was lukewarm and focused on the possible use of PHBs to support low-income tenants in social housing where the operating agreement support is to end. FCM also raised fears of rent inflation if affordable housing is not built as well, as the “real solution” to the affordable housing problem. (FCM represents the municipalities who are worried about their need to fund social housing repairs and rent supplements in social housing.) CFAA reached out to the reporter with evidence that a welldesigned PHB program does not inflate rents. We also showed him how PHBs are needed because of the wide variation in rents between and within provinces, while federal and provincial income support programs do not address those key differences in the cost of living. The initial public comments on the article were entirely negative. They consisted of objections to Trudeau’s spending more tax money to help people “who made poor life choices". As a result, the article did not focus on the much higher costs of building social housing, or the fact that PHBs allow people to get out of the cycle of poverty by giving them the ability to keep their housing benefit when they move to find work. Minister Duclos’ office is monitoring the reaction in the media and among the public, both to them directly and to other government people, including the ministers on the key cabinet committees.
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WRAMA general meeting
WRAMA had its first general meeting of the new year on Wednesday, January 11, 2017. In addition to two timely and informative guest speakers, President Andrew Macallum reminded members that, “The mission of the Waterloo Regional Apartment Management Association is to actively and positively develop and sustain the integrity of its members’ business—the provision of private residential rental accommodation—in the Golden Triangle.” In an effort to improve the WRAMA membership experience, members were provided a survey to voice their opinions on items ranging from reasons they attend meetings to preference of meeting times to the primary means of staying informed about the association. Members can request a survey (if not completed) by contacting firstname.lastname@example.org via email. To stay informed about events and the latest in news impacting the rental industry, follow WRAMA on Twitter @WRAMAprez.
How it works:
WRAMA welcomed guest speakers Julie Hornick-Martyk, Dana Christiaen, Edwina Toope and Cheryl Cowie from STEP Home: Support to End Persistent Homelessness. Working under the umbrella of community organization Lutherwood, they spoke to landlords about programs that support transitioning people to homes in the Waterloo Region with support incentives. The following information was provided.
• Bachelor apartment: $710.00 (including utilities)
• We refer STEP Home participants to be considered as an applicant for your vacancy. • Program participants are those who have expressed a commitment to housing and support. • Landlords interview the applicant and determine if they will be a tenant. • Last month’s rent deposit is paid up front. • Monthly rent assistance is available in some situations.
We are seeking apartments at or below the following rent amounts: • One-bedroom apartment: $872.00 (including utilities)
STEP Home strives toward providing: • A single point of contact for landlords • Prompt responses to concerns
Rental units needed Cambridge STEP Home service providers have an exciting new initiative to end chronic and persistent homelessness in the Cambridge community. The program supports people living on a low income to locate permanent housing in Waterloo Region and offers tenants the supports needed to retain their housing and thrive in our community. We are looking for safe, affordable housing owned by reputable and trustworthy landlords in Kitchener, Waterloo and Cambridge. We are seeking landlords who believe everyone deserves a home.
• Landlord, tenant and neighbour mediation • Support to both landlords and tenants to ensure successful placement
For more information or to sign up for our landlord-tenant match service, please contact: Julie Hornick-Martyk Housing Liason Worker 519-222-1559 email@example.com
Dana Christiaen Housing Liason Worker 226-989-2657 firstname.lastname@example.org
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After the formal presentation, there were several questions and comments. As a program supporting housing for homeless, working under the philosophy that housing is the only known cure for homelessness, the presenters were passionate in making a link to strengthening a landlord’s business while addressing a social need. They suggested that landlords look to underperforming parts of their portfolio and consider that STEP Home would like to align business needs with housing needs. In addition to providing safe, affordable and stable housing, STEP Home will work with landlords to ensure the tenancy is positive – with support through the OLTB, providing a peer support worker who will work with the tenant to provide coaching about life skills such as making decisions that impact the relationship with a landlord.
free garbage tags for the first year via Canada Post by the end of January. The tags will be mailed in an envelope to the building address and then to individual mailboxes so that tenants may use the tags themselves.
Although there is a primary need for bachelor and onebedroom apartments, larger two- and three-bedroom units are needed as well. People are prioritized by housing needs and preferences with resources that can match, with hopes of making a best fit.
Waste management WRAMA also welcomed Kathleen Barsoum, Coordinator of Waste Management for Waterloo Region, who spoke about the upcoming changes in waste collection starting March 6, 2017. Ms. Barsoum shared that in an effort to address the landfill that is nearing its lifespan, a multitude of collection services throughout the region and townships, and address a low diversion rate, the ROW is embarking on a contract with a new service provider. As Ms. Barsoum says, goals included increasing diversion, achieving cost savings on a new contract and providing equal service for all. Buildings that are six units and less will continue to receive ROW service. While blue bin and green bin collection will continue with weekly pick-up, garbage collection will only occur every two weeks. There will be a limit on the number of garbage bags and cans that will be picked up. All residents receive a calendar with 10
Ms. Barsoum shared that there has been a large education campaign – particularly with students living in student rentals. In an effort to help residents plan for the change: • MyWaste app can be downloaded that provides personal reminders to smartphone about the collection schedule. • Residents can follow the latest in collection news on Twitter @WasteWR. • There is an established 24/7 Customer Service support contact at 519-575-4400. More information can be found at: http://www.regionofwaterloo.ca/en/aboutTheEnvironment/col lection-schedules.asp http://www.regionofwaterloo.ca/en/aboutTheEnvironment/lan dlords-and-property-owners.asp
Discover the benefits of being a member of our association: e mission of the Waterloo Regional Apartment Management 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 management resources we oﬀer our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-748-0703.
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Larry Smith We are very fortunate to have WRAMA Board of Director Larry Smith involved in different capacities with rental housing at both the provincial and federal levels. In addition to his involvement with WRAMA, he presently sits as a member of the board of directors for both the Federation of RentalHousing Providers of Ontario (www.frpo.org) and the Canadian Federation of Apartment Associations (http://cfaa-fcapi.org). Mr. Smith provided an update from both organizations, which included Advocacy and Government Relations and Municipal Licensing from FRPO as well as information on National Housing Collaborative, National Housing Strategy and Tax Lobbying from CFAA.
Rental housing licensing WRAMA received a letter from Diana Fodor, a landlord in North Bay, Ontario, to share information with its membership. Her request begins: “I am a landlord from the city of North Bay that has initiated a legal challenge in Toronto’s Divisional court, asking the court to declare the rental housing licensing bylaw currently in effect in North Bay illegal and unconstitutional. The ruling on North Bay will have provincewide implications because we are arguing that such by-laws are in direct conflict with the Residential Tenancies Act, The Municipal Act, and the Canadian Charter of Rights and Freedoms.” Ms. Fodor is requesting support and can be reached at 705-471-2641 or via email email@example.com.
WRAMA trade fair The annual WRAMA Trade Fair will be held on April 17, 2017 from 7:00 pm to 9:00 pm at St. George Hall in Waterloo, Ontario. As stated on the WRAMA website, part of WRAMA’s purpose is to bring together residential rental property owners and
managers with product and service providers who can assist them in operating their business. In addition to seeking out “Suite Deal” discounts from suppliers for our members, WRAMA hosts an annual trade fair each April, which is open to WRAMA members and non-members, as exhibitors or attendees. We invite over 500 area residential property managers, owners, and condo managers to the event featuring over 50 exhibitors. Free refreshments are provided on behalf of our event sponsors. Admission to the trade fair is free. Everyone is welcome. For more information, visit http://wrama.com/events/trade-fair/.
Meeting wrap-up Finally, every WRAMA general meeting includes a 50/50 draw, a Membership draw and a draw for a free dinner at Golf’s Steak House. Congratulations to the winners from the January 11, 2017 meeting: Peter Miller, who won $37.50 from the 50/50 draw; and Michele Aubut (Golf’s Dinner), who answered “Cost and Communication” to the question from the latest edition of Suite Talk “What are 2 of the 5 things to consider when choosing the best Property Management company?” The Membership Draw of $280.00 was left unclaimed as the name of the person who was drawn was not present. It will increase to $290.00 at the next general meeting. The next WRAMA general meeting is on Wednesday, February 8, 2017 starting at 8:00 pm at Golf’s Steak House. Looking forward to seeing you then!
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Tips for creating an emergency response plan
ew property managers want to believe their tenants could be left homeless and their buildings damaged in the wake of an emergency. Even so, planning for just such an eventuality, and training staff to respond, could potentially save landlords thousands of dollars in damage — and even save lives.
When staff members are under duress, a step-by-step emergency response plan will guide them.
“You don't want to be in a situation where there is an emergency at a property and no one knows what to do,” says London lawyer Laura McKeen.
McKeen defines an emergency as any natural or manmade event, such as a wildfire, flood, snowstorm, chemical spill or terrorist event, that requires tenants to leave their units. On a smaller scale, a flood caused by a water tank explosion or mould issue might require tenants to temporarily relocate.
"If that happened to occur in your building, you would certainly want to have procedures in place to notify tenants about the situation, and to be able to tell your staff what to do so they know how to cooperate with local law enforcement authorities,” says McKeen. “For example, when are you allowed to give your tenant list to police? If the police show up and they're asking for a list of your tenants, what are your obligations?” Although different disasters require different strategies, commonalities link situations. In that case, one general plan might be needed along with a contingency plan to cover an evacuation. Conduct a risk assessment: Four years ago, the Skyline Group of Companies formalized its emergency response plans. Staff compiled a list of potential emergencies, including bomb threats, pandemics, elevator failures and violence in the workplace.
"It's inevitable that something will happen somewhere at some time, and our staff need to be prepared for it,” says B.J. Santavy, Vice President, Skyline Living.
The first one to two pages of the plan are tailored to each property and include addresses and telephone numbers for emergency responders, followed by preferred contractors, the property manager and head office, and the order in which those contacts should be called. The remainder contains the company’s standard response to emergencies.
“When tenants are safe, the building is secured and calls to contractors have been made, the business can then continue to operate,” says Santavy. To help ensure business continuity, tenants are given an information package when they move in that includes a telephone number that will reach either the resident manager or assistant resident manager 24/7. That’s critical information when tenants need maintenance following an incident. “In an emergency, timing is very important,” says McKeen. As part of the risk assessment, McKeen says landlords should consult with legal counsel, peruse available information from local emergency response authorities and review their insurance policy to determine whether they have enough protection. If not, they need to know what the cost will be to add extra riders to their policy. Landlords should also make having tenants' insurance a requirement of their lease, and obtain proof of insurance before giving tenants the keys to their unit. They should also ensure that rental hous ingbusine ss.c a | 49
The entire plan and the tenant list should be updated annually, including email addresses, names of tenants living in each unit, current telephone numbers, and tenants’ emergency contacts. There should also be a hard copy nearby.
“In case of an evacuation, the police and fire department are going to want to know if they got everybody out,” says Santavy. “They're going to want to see that list. Making sure that it's current is really important.”
First responders need up-to-date floor plans that indicate which residents in specific units will need help reaching the agreedupon meeting place. And if the elevators aren't working, landlords need a plan for evacuating those tenants.
“Anything you can do to save time can be crucial in an emergency situation,” says McKeen. Landlords should consider where they will direct tenants to go in an evacuation if they don't have family that can take them in, whether it’s a nearby hotel or shelter. Communicate evacuation strategy to residents: Post the strategy in the building with an established meeting place and ways for tenants to contact management. Landlords also need to determine how to communicate with residents who are in the building and those who are not. “All of those things will prevent issues from arising, which we always want to do,” says McKeen. “The easiest way to avoid conflict is to prevent it.” Landlords should stress that residents must leave the property
London Property Management Association (LPMA) is a non-profit organization, located in London, Ontario, Canada, that provides information and education to landlords. LPMA represents the interests of both large and small property owners. e association has more than 400 landlord members representing approximately 35,000 rental units.
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Membership is open to landlords and property management professionals who own or manage one or more residential rental units. Sign up online www.LPMA.ca, or call Brenda Davidson at 519-672-6999 for more information.
when they are asked to and that landlords could pursue a legal remedy if the tenant who refused to leave caused damage or was injured, McKeen says. Although landlords are obligated to maintain their buildings in an emergency or evacuation, pets are tenants' responsibility. Develop a resident communications plan: Landlords need to put themselves in the residents’ position when creating their communications plan. Tenants will want as much notice as possible if they have to leave their units. They also want to know if the property owner's insurance will cover their costs, when they can return to their units and why the emergency occurred. Landlords need to decide how much information to share with tenants and to assign an employee to create that message. Skyline uses a newsletter to remind tenants annually that they are obligated to have an emergency plan. It should include a family member they can call, and a kit with warm blankets, bottled water and food rations.
“In the case of a power failure, there may not be heat or water in the units, so having an emergency kit handy is really important,” observes Santavy.
Learn from emergencies: Following a crisis, Skyline staff conduct a debriefing with feedback solicited from residents, site staff and contractors to determine what went well and what needs to be improved. Staff document the information and take photos for the company’s insurance provider and as preparation
for the next emergency. Once a year, staff review their plans to see if they are realistic, if employees know what to do in a crisis and if the company is training staff adequately. “I think the most important thing is lives come first, assets come next,” says Santavy. “When putting your plan together, think of the human factor first. Once you've got that taken care of, then make sure the asset is protected."
President’s message... Season’s Greetings and Happy New Year! I would like to thank all of our members and associates for a wonderful end to 2016. At our Christmas party, which was attended by 150 guests, we honoured Alan Richman, an LPMA founder, as we enter into our 50th anniversary year. Our website will have more information as we plan for a celebration in May. Our next meeting is January 10 and the following topics will be presented: benchmarking for hydro consumption, notifying tenants of planning changes, and fire safety. I also have exciting news to share about Yardi. Anant Yardi, company founder and president, was recognized by the National Apartment Association (NAA) with a rare lifetime achievement award. He is the third person to receive this award in the history of the NAA. For more information, visit: http://www.businesswire.com/news/home/20161114006113/en/ National-Apartment-Association-Recognizes-Yardi-Founder
— Shirley Criger, Property Manager Gateway Property Management Corporation
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Before you rent
t is important to understand your legal obligations and responsibilities before becoming a landlord. Too many people become landlords without understanding that it is more then just processing a rent check each month. You are entering a legal agreement with another person, a commitment that should never be taken lightly.
You are selling the unit, so the unit’s condition is the number one priority. You are responsible for ensuring the rental unit complies with health, safety, housing and maintenance standards before and during a tenancy. There are many things that need to be in place before you open the doors. Every landlord should consider the following before renting. Lease agreement: This is an obvious necessity but you would be surprised at how many new landlords don’t spend time to find a good lease agreement. Fortunately, it comes with membership. If you don’t have a good agreement, then you are not protected and you are starting off as a landlord in a dangerous situation. Security of tenure: All Ontario tenants have security of tenure. This means that a landlord cannot end the rental agreement unless they have reason to do as defined by the Residential Tenancy Act. Tenant information packages: Each new tenant must receive an information package outlining basic rights and responsibilities with ways to contact the Landlord and Tenant Board. Setting rent: Sometimes new investors get sold on the wording “below market rent” and think they can kick tenants out once they purchase a property, raise those rents and watch the cash roll in. A good agent will let you know that rent de-control only occurs when a rental unit is vacant; when the unit is re-rented, the new rent become subject to rent control provisions under the Residential Tenancies Act. As
stated, tenants have security of tenure; it might take years before you can bring a unit to market rent. You may be tempted to give the renter notice that you will be moving in, but if you issue the notice in bad faith you run the risk of large fines and damages. Tenant screening & discrimination: HDAA held an education session on the Human Rights Code and plans on doing another one in 2017. This is an important topic that needs to be in the minds of all landlords. How you advertise a property, how you screen a tenant, how you choose your tenant and how you communicate are all subject to adherence to the Ontario Human Rights Code: Every person has the right to equal treatment with respect to the occupancy of accommodation without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, family status, handicap or the receipt of public assistance. Rental & damage deposits: Landlords may require a prospective tenant to pay a deposit before entering into a tenancy agreement; the maximum amount is the equivalent of the rent for one rent period (one month / one week). If the tenant is accepted, the deposit is applied as payment of rent for the last rent period before the tenancy terminated (last month’s rent). All tenants are entitled to the return of their deposits with interest after they move out. If the deposit is used to pay for last month's rent, then no money is refunded. However, if a provincial authority holds the deposit or the tenant pays last month's rent, then the tenant will receive a refund. It is common for accumulated interest to equal the difference between the monthly rent at the beginning and end of the tenancy. In Ontario, you may NOT ask for a damage deposit and you cannot use the rental deposit to cover damage to the premises.
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Receipts: Always have a paper trail. The landlord must provide, free of charge and upon tenant’s request, a receipt of payment. All transactions should have a receipt, not just for the tenant but also for the landlord. Make sure you have receipts of any rent, rent deposit, arrears of rent or any other amount paid to the landlord.
Five key elements to successful real estate management Good management will make the difference between your real estate business making a profit or loss. Finding the missing pieces in your employee engagement effort will increase your bottom line. It’s not about providing motivation; it’s about providing good management. Most workers I have encountered act the same. They want to do a good job and they have ideas about how to improve their new workplace or your property. On day one, they come motivated, wanting to do a good job and ready to make it better. So what happens? In a sentence, we, as managers and leaders, get in the way of their desires. Not all efforts at work enrichment and employee empowerment are successful. Some people have found a formula that works. If you, as a manager and owner of your business, fail to supply any of the five key elements below, you will, sooner or later, de-motivate your employees and steal some measure of the power of employee engagement.
The five key elements are: Sense of meaningfulness: Workers show greater interest in their work when they understand they are working for a meaningful task and serving a higher purpose. Are your management actions focused on the goal of making money?
Studies show that if management’s actions are heavily focused on “the bottom line at all costs,” your employees’ sole focus will be, “What’s in it for me?” They won’t “want to” work for the company, only for themselves — and they won’t “want to” improve the workplace. Employees need to “see” that their contributions are not only necessary but significant and their ideas are considered and at times used. Sense of control: Do your workers have some way to get input into the things they can affect and the things they should affect? Do they have ways to control what and how they do things, or are they just following instructions. If it is a “my way or the highway” management style, employees will find the highway as soon as something better appears. Sense of accomplishment: Do your workers have ways to determine whether they have done a good job? Can they answer the question, “How did I do today?” Can they go home knowing they did well? Can they tell each hour of each day if they are doing their job well? Are their visual indicators in place? Sense of growth: Do workers have a way to contribute and grow as individuals? Can they improve their skills via training? Is there a conscious effort to create “future opportunities,” or does your company supply no sense of hope for the future of the individual? Studies show that companies that reward employees with opportunities to exercise their demonstrated skills, such as writing new procedures or training other employees to their level of competence, are far more productive. Sense of community: Successful companies have a true sense of teamwork at work. Employees have reasons to proudly wear the company logo on their shirts. Humans are social animals, and if their sense of community is not fed at work they will seek it elsewhere. You can perform a reality test on these five key elements. For the most part, good business owners understand how to use
Hamilton and District Landlords Since 1960, the Hamilton and District Apartment Association has grown significantly. Our member landlords and property managers manage in excess of 30,000 units throughout Hamilton, Burlington, Brantford, Guelph, Mississauga, Oakville, St. Catharines and into the Niagara Peninsula. e association is a highly respected organization, sought out regularly by government, industry, media and the public. To join, submit the application form available at www.hamiltonapartmentassociation.ca, or contact HDAA at 289-208-5445.
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these five elements to acquire and retain workers. If you want a successful business, you will need to manage your human and financial resources. Good management requires commitment to upgrade your management skills by taking management courses. These courses will upgrade and increase your business.
Upcoming events for 2017 March 8
Morning education seminar: Basic landlord forms
Trade show & VIP cocktail reception
Spring Hope Food Drive
A Night at the Races
Dinner meeting: Landlord corporate structuring, succession, estate and tax planning
Morning education seminar: Human Rights Code
– Maria Rekrut, Niagara Cottage Rental
President’s message... For the last few years, I have done a short presentation at the January dinner meeting about the CMHC Rental Market Report for the Hamilton CMA. Most years, if vacancies increase, then rent increases are not strong; if vacancies are down, rent increases are higher. The results in this year’s report were a little different. Vacancies were up slightly but there was also strong growth in rent levels. To my mind, there are two factors behind this. We are seeing more landlords improving their properties, upgrading their buildings and apartments, and therefore needing to increase rents. This is coupled with people and investment moving into Hamilton from the GTA, raising house prices and rents. The influx may be squeezing local people out of the market, especially young people moving out of their parents’ homes. Hamilton is evolving and the next few years should be very interesting, dare I say it's a great time to be in Hamilton.
September 13 Dinner meeting: TBA October 11
Morning educatin seminar: Landlord and Tenant Board
November 8 Dinner meeting: TBA
— Arun Pathak
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Ottawa property tax status - better than Toronto's
s landlords and homeowners know, property taxes are paid to the City, based on the Cityâ€™s tax rate multiplied by the assessment of the property. The City sets its tax rates based on its budget, but the property assessments are set by Municipal Property Assessment Corporation (MPAC). 2017 is the first year of a new four year assessment cycle. The 2017 taxes will be based on the 2016 assessment, which used a valuation date of January 1, 2016. Subject to any appeal by the owner, that assessment will also determine the property taxes for 2018, 2019 and 2020.
For multi-resident properties (seven units and up), MPAC previously used the gross income approach, but it has now moved to a net income approach. However, the new system continues to look at average parameters for groups of buildings rather than the revenue and expenses of each building on its own. MPAC seeks to determine a normalized value for each property, ignoring the quality of management of any specific building. MPAC values residential properties (one to six unit buildings) by the sales comparison approach, with some elements of the cost approach (determining land value and depreciated building value separately). In Ottawa and in most other Ontario cities, new multiresidential properties and all residential properties pay a lower municipal tax rate than multi-residential properties. For example, in 2016 the City of Ottawa charged a multiresidential tax rate of 1.2312 per cent and a residential tax rate of 0.8642 per cent. That is a multi-residential tax ratio of 1.42. Both classes paid the same provincial education tax rate of 0.188 per cent. Rental properties and tenants are being treated unfairly by the application of different tax rates. In other parts of Ontario, the discrepancy is larger, since the average multi-residential tax ratio is 1.92. In Toronto, the multi-residential tax ratio is 2.99, meaning that renters pay a tax rate three times as high as homeowners.
Many people think that when their assessment goes up their taxes go up. However, the real key is how each propertyâ€™s assessment changed compared to other properties (especially those in the same property tax class). Table 1 shows the average assessment changes for Ottawa from the 2015 assessment for 2016 taxation to the 2016 assessment for 2017 taxation. (Assessment increases are phased in over the fouryear assessment cycle.)
Table 1: Average assessment increases by property class in Ottawa
Individual properties have gone up by different amounts. Some newer buildings, and properties in the centre of Ottawa, have gone up significantly more than the average within the multiresidential class. This suggests that many older buildings and properties in some suburban areas have not gone up much.
The provincial tax freeze In the Greater Toronto Area, the average multi-residential assessment went up by 45 per cent. Owners were alarmed and feared dramatic property tax increases, piled on top of the unfair excess multi-residential tax ratio. To address those concerns, the provincial government has promised a tax freeze for many properties. However, as this article goes to press, the details are unclear.
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It seems likely that the “freeze” will apply to total taxes paid by the multi-residential class in each city. Therefore, relative assessment changes will still matter. It is unclear whether the freeze will apply across the province or only in areas with tax ratios above the average. The freeze will surely apply in Toronto, but may or may not apply in Ottawa. About 15 years ago, the province recognized that the different tax burdens and tax rates on multi-residential property were unfair. While rental owners send the tax money to municipalities, economists agree that tenants effectively pay the property taxes on their rental apartments or homes. According to tax expert Allan Maslove, Distinguished Research Professor Emeritus at Carleton University, “The differential tax on rental units over owner occupied units is effectively and fully borne by tenants.” The province created a system in which the multi-residential tax ratio would come down, either by decisions of City Councils, or regardless of their wishes. The Federation of Rental-housing Providers of Ontario (FRPO) played a large role in achieving that system. Over that period the multi-residential tax ratio in Ottawa has been brought down from 2.32 to 1.42, largely due to Council decisions based on EOLO’s successful lobbying efforts to address the unfairness in the property tax system. In Toronto, the ratio has come down from 4.18 to 2.99 largely due to the province’s rules. Along with allowing or forcing tax ratios to come down, the province requires rental owners to reduce rents when the property’s taxes fall by more than 2.49 per cent year over year. That ensures renters and politicians see the impact of city decisions on property taxes.
Addressing your own assessment Regardless of what the province does, reducing your own assessment is almost always helpful, either now or in the future. To address your own assessment on a rental property you are best to: • Engage a consultant OR at least check yourself against competing buildings • If the assessment seems high, meet the assessor and request for a review • If an appeal seems to make sense, appeal • Give the mandatory rent reductions OR apply to reduce the rent reductions, but give your renters what you are required to give them in rent reductions. The provincial rent reduction rules assume that property taxes will be 20 per cent of the rent. That is probably accurate on average across Ontario, but it is too high in Ottawa. The rent reduction rules allow landlords to apply to vary their rent reduction, and many building owners in Ottawa find doing that advantageous.
FRPO and EOLO are both watching closely, and encouraging the provincial government to finish the job of moving to equal tax rates for renters and home-owners.
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: • Receive prompt email notification of relevant City rule changes • Be able to attend two networking receptions each year • Be able to attend two free education events each year
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• Receive EOLO’s newsletter with more information about new issues and developments at the City and in 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.
Proposed maintenance bylaw changes
City Budget includes EquiPass
The City of Ottawa is considering amending the Property Maintenance Bylaw to make it easier and quicker for the City to require certain problems to be addressed. Sample problems are garbage strewn about a property, garbage bins being kept at the front of a property, dilapidated outside furniture or a safety hazard in the yard.
EOLO advocates for portable housing benefits to help lowincome people pay their rent. Since most low-income people rent their homes, raising the disposable income of low-income people works almost as well.
Once a Bylaw officer identifies a problem, the officer delivers a Notice of Violation (NOV) to the owner on title by registered mail. There is then a time period for remediation. The proposal is to post the NOV on the front door and send it by mail, and to shorten the deemed service date to three days from five. As well, bylaw obligations are specific to the occupant or owner, or may apply to both. Reforms would make the owner or occupant responsibilities clear. EOLO understands that landlords do not like being held responsible for tenantsâ€™ actions. In our work on the noise bylaw we received the Cityâ€™s assurances that they would take action first against the occupants, and that has largely been done. In principle, the City would be willing to give the same assurance for this bylaw, but they are concerned that tracking down the occupant (tenant) names will delay enforcement. EOLO may consider suggesting a voluntary registry in which landlords could report tenant names to facilitate notices and charges being delivered to tenants rather than landlords.
The City of Ottawaâ€™s 2017 Budget includes a new EquiPass for people with incomes below the Statistics Canada low income cutoff line. (In 2016, the income cutoff was $24,328 for a single person, and $30,286 for a two-person household.) The EquiPass will cost $56.75 per month. A two bus pass household will save $113 per month. On an income of $2,000 per month, that is a boost of 5.6 per cent in spending power. If their rent is $1,000 per month, the new discount means a boost of 11 per cent in their spending power after rent. This increase in disposable income makes it easier for lowincome people to pay their rents in full and on time, which is good for them and their landlords. The reduced rate pass is expected to cost the City $2.2 million per year. Ottawa Mayor Jim Watson and City Councillors deserve sincere praise from low-income tenants, landlords, and those who care about the well-being of both groups.
Ottawa landlords are invited to email comments or concerns about the Property Maintenance Bylaw to firstname.lastname@example.org.
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Spin Cycle This is the last issue with One Last Thing. RHB Magazine is replacing this section with The Spin Cycle, which provides readers with tips and insights on branding, B2B marketing, sales & business development, advertising and related topics. For example, we will be discussing: · Brand evaluation · Emerging digital media · Understanding your target market and standing out from your competition If you have a topic that you’d like us to cover, let us know at email@example.com.
WEBCON HITS THE ROAD Now known as WEBCON Roadshow, we're taking our signature event directly to our attendees, nationwide! From February to October 2017, we'll be visiting a selection of major cities from coast to coast, including Hamilton, Edmonton, and Calgary, with more to be announced. The WEBCON Roadshow is a special, half-day format that will focus on online marketing strategies and techniques that are relevant to rental housing providers in 2017.
CFAA Rental Housing Conference and Awards 2017 CFAA Rental Housing Conference 2017 will be held at the Westin Prince Toronto from Tuesday, June 6 to Thursday, June 8. Don’t miss the second annual CFAA Awards Dinner on Wednesday, June 7. Register now at www.CFAA-RHC.ca to save. Awards applications will open in February. For more information, email firstname.lastname@example.org.
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