Is Bill 184 “Controversial?”

Leasing/Renting | July 24, 2020


Here’s an awful story, but one that we can all learn from…

A colleague of mine sold a condo to a buyer-client of his for investment.  The client lived with his fiance in a condo that their parents owned.

This new purchase was to be their eventual home together, but for now, they would put a tenant in the unit and continue to live in mom-and-dad’s place.

My colleague put the unit on MLS and another agent, a reputable one, who works in the area, brought an offer to lease.

The tenant was qualified, on paper, and had references, pay stubs, and an employment letter.

The lease was signed, and the keys were handed over.

The first weekend thereafter, the owners of the condo were notified by the concierge that there was a raging party in the unit on Friday night.  On Saturday night, another party was held, and the police were called.

The new condo owners did some research and eventually found their condo advertised online as a “smash pad” where people can rent the space for the night, have a party, smash the shit out of the condo, and simply walk away.  I suppose this is a business model, but I digress.

The “tenants” continued to do this every weekend, and the new buyers took this to the Landlord & Tenant Board, which, as it always does, took months.

Guess what happened?

Nothing.

The tenants were paying rent on time.  Case closed.

For all the talk in the media about evil landlords, unfair evictions, and the dangers of allowing leniency to property owners to do bad things to renters, there’s very seldom talk of what really goes on out there and just how impossible it is to get problem tenants out of units.

My wife is a social worker, and years ago she had to attend an eviction hearing at the LTB.  A police officer testified about rampant drug use and constant sales of drugs out of the unit, and having been constantly called by neighbours.  That eviction was denied, and the landlord was told to “try a little harder to understand the tenant, and perhaps some common ground can be found.”

This story frustrated the hell out of me.

And yes, my political views are slightly right of centre, and I’m privileged, but I’m also fearful of society’s never-ending race to the bottom, and constant lowering of the bar.

The Ontario Liberal government enacted legislation back in 2017 that prevented landlords from evicting tenants under false pretenses, which is a good thing.  Back then, you could tell the tenants, “I’m moving into the unit, so you’re being evicted,” then put the unit up for sale, and suffer zero consequences.  I know this first-hand, because I’ve seen clients do it.  Today, there are real penalties for doing so, and the 2017 legislation spells out that “you or a family member must occupy the unit for twelve months.”  These changes were made to protect tenants, and the changes were needed.

But the 2017 legislation also made it damn near impossible to evict a tenant for any reason.  And landlords know it.

One of my clients owns a multi-plex, and she has an awful tenant on the top floor.  The tenant has been torturing the other tenants in the property for months and months on end, and there’s photo and video evidence of such.  He sits in the yard at 3am putting music on, full blast.  He bangs pots and pans on the floor for hours in the middle of the night.  He does things to try to make the tenants lives miserable, and we believe, to make them want to leave, so he can live in the building alone.

The tenant won’t answer emails or phone calls and won’t answer his door.  He refuses to communicate with the landlords, or allow access to the property, even when work need to be done on his unit, or access needs to be given through his unit (ie. to fix the roof, the A/C, etc.)

This tenant is either an asshole, or has real mental health issues, we don’t know.  But if it is the latter, is it the landlord’s responsibility to take care of him, and lose her investment in the process?

Armed with a dozen videos of the tenant acting in this manner, and sworn statements from the three other tenants in the property, do you think the Landlord & Tenant Board will allow an eviction?

I don’t.  Sorry.  Been there, done that.

Tenant advocates (and I know some are reading this right now) will make arguments, ranging from, “You must be mistaken as to his actual behaviour,” to “The landlord should investigate what his issues are,” right down to the one I fear the most: “If he does have mental health issues, evicting him will only make it worse.”

Maybe.

But if one person is causing problems for three other tenants, not to mention the landlords, and his behaviour is not acceptable, then isn’t removing him the solution?

All the rage this week was about “Bill 184,” which many are calling “controversial.”

Here is the full press release from the Ontario Government:

 


 

TORONTO ― The Ontario government is providing stability to Ontario’s rental market by increasing fines for unlawful evictions and reinforcing the necessity for landlords to explore repayment agreements before considering evictions. These measures are included in the Protecting Tenants and Strengthening Community Housing Act which received Royal Assent today.

“We know tenants and landlords have struggled during COVID-19, and some households may be facing eviction due to unpaid rent during this crisis,” said Steve Clark, Minister of Municipal Affairs and Housing. “By making these changes we are trying to keep people in their homes, and at the same time, helping landlords receive payment through a mutual repayment agreement. It’s a better approach, especially during these difficult times.”

The legislation, which updates the Residential Tenancies Act, 2006 and Housing Services Act, 2011, will make it easier to resolve disputes while protecting tenants from unlawful evictions by:

  • Requiring tenant compensation of one month’s rent for “no fault” evictions;
  • Allowing the Landlord and Tenant Board to order up to 12 months’ rent in compensation for eviction notices issued in bad faith or where the landlord does not allow the tenant to move back in after renovations or repairs;
  • Doubling the maximum fine amounts for offences under the Act to $50,000 for an individual and $250,000 for a corporation.

The changes will also modernize and streamline the dispute resolution processes at the Landlord and Tenant Board and encourage the use of alternatives to formal hearings to resolve certain issues and encourage negotiated settlements. The Landlord and Tenant Board must now consider whether a landlord tried to negotiate a repayment agreement with a tenant before it can issue an eviction order for non-payment of rent related to COVID-19. Certain disputes, such as those related to unpaid utility bills, will shift from Small Claims Court to the Board.

In addition, as part of the multi-year strategy to stabilize and grow Ontario’s community housing sector, the government has made changes to the Housing Services Act, 2011. These amendments will help maintain the existing community housing supply by giving housing providers with expiring operating agreements and mortgages ways to remain in the community housing system by sigining a new service agreement with service managers as well as encourage existing and new housing providers to offer community housing. Changes would also require service managers to have an access system for housing assistance beyond just rent-geared-to-income housing, and enable an outcomes-based approach to accountability by modernizing outdated service level requirements.

Ontario will consult with service managers and stakeholders on regulations to protect, repair and grow community housing supply, new access system rules, and ways to encourage new, innovative approaches.

These changes build on the commitments in the government’s Community Housing Renewal Strategy and the steps already taken to make life easier for tenants and housing providers – including simplifying rent-geared-to-income calculations, and removing rules that penalize people for working more hours or going back to school.

 


 

The response to this bill has been mixed, to say the least.

While very few people are going to stick their necks out and say that this is good in any way, there’s a lineup a mile-long of people ready to share their outrage.

We have no shortage of articles to pick from, but here’s one with a headline that leaves no confusion:

BlogTO: “Bill 184 Is Now Officially Law In Ontario But Tenants And Advocates Are Still Fighting It”

While this story is slanted in favour of tenants, it’s not an editorial – it’s a story about how tenants are fighting the bill.

Here’s a choice quote:

“The purpose of Bill 184 is to allow corporate landlords to more easily remove the greatest obstacle to increasing their already massive profits: working class tenants,” said Cole Webber of Parkdale Community Legal Services.

 

“It doesn’t take long for landlords to recover this money because they are allowed to increase rent on vacant units without limit after pushing tenants out of their homes.”

It’s actually very tough to find any coverage that is neutral on this story.

Even when the bill was first announced back in July, the media was only following the critics.  Case in point:

CBC News: “Advocates Say New Ontario Bill Gives An Unfair Advantage To Landlords Over Tenants”

This article offers a better layman explanation of the contents of Bill 184:

Under current law, all disputes over evictions and rent in arrears must be heard by the Landlord and Tenant Board, some of which result in rent repayment plans.

Bill 184 would allow for landlords to cut the board out of the equation and offer tenants their own repayment plan.

If a tenant refuses the landlord’s offer, they can still take their matter before the board, but some critics and legal analysts say it’s more likely that vulnerable tenants will sign onto shady repayment plans because they don’t know how to navigate the system.

Once again, the article contains quotes from critics, and describes why, and with what, tenants are upset.

But unlike many of the other articles out there, this one does contain a positive viewpoint:

The governing Progressive Conservatives have said the bill will help, not harm, tenants.

A spokeswoman for the minister of municipalities and housing said the proposed legislation would “strengthen protections for tenants and make it easier to resolve landlord and tenant disputes.”

The bill also increases maximum fines to discourage unlawful evictions, and allows the Landlord and Tenant Board to order up to a year’s rent in compensation to tenants for eviction notices issued in bad faith, Julie O’Driscoll said in an email.

“When rent is overdue, we want to encourage landlords and tenants to work together to come up with repayment agreements — rather than resorting to evictions,” she said.

Call that political rhetoric if you want to, that’s fine.

But I see a positive here – the idea that the government is encouraging landlords to work on repayment plans, rather than evictions.  This is a good thing, right?  On that, can we agree?

Now the irony in all of this is not lost on me.

The conversation among critics is just how unfair it would be if a landlord offered a repayment plan that the tenant refused, and the landlord then evicted the tenant.

But can’t we take a step back?

Since when is it unfair to seek to evict a tenant for not paying rent?

And I don’t mean during a pandemic, or after a tenant is a day late on paying the rent.

I mean that if a tenant, last November before the pandemic was upon us, had been two months behind on his or her rent, why couldn’t the landlord seek an eviction?

None of the conversation is about this.  We’ve jumped ahead to “shady” landlords offering “unfair” repayment plans to tenants who are not paying rent, but we’ve skipped over any conversation about the responsibility, pre-pandemic of a tenant to adhere to a contract, pay for services, be accountable, and all things otherwise logical and acceptable.

Only, now, what?  These aren’t logical and acceptable?

Society is changing, and so too, in my opinion, are the definitions of “logical” and “acceptable,” along with the idea that paying rent to live in somebody else’s home should come standard.

I guess I just don’t understand this movement:

Cancel rent?

Cancel mortgage?

Huh?

How?

Why don’t we live on the moon then?  That’s equally as logical.

Margaret Thatcher famously said, “The problem with socialism is that eventually, you run out of other people’s money.”  Amen.

How in the WORLD do we “cancel mortgages?”  This is coming from a sitting United States congressperson.

Tenants need to pay rent.  Surely there is no debate about that?  Because if that is the debate, then all hope is lost.

Once again, I feel as though the grey area has yet to be found.

On the one hand, we can’t have professional con-artists living in condos, trashing the place and throwing parties, while hard-working, law-abiding, tax-paying citizens, who fought and worked hard to come up with the down payment for an investment property, are being told by the Landlord & Tenant Board that they have no grounds to evict the tenant.

On the other hand, we cannot allow illegal, immoral, and cruel evictions for people who are paying their rent on time.

I’m a capitalist, sure.  But if the owner of a 20-unit building who is renting to twenty rent-paying tenants, decides that he or she wants to tear the building down, then he or she can’t just kick those tenants out on their ass.  Society can’t work that way.  Whether the discussion is about a reasonable timeline or a fee for inconveniencing the tenants, surely there’s a middle-ground here.

Bill 184 has passed, and is now law.

While some protestors are going to harass John Tory outside his condo, and while some news outlets feel the need to mention that his condo is worth $2.4 Million, as if that has anything to do with the provincial bill that was passed, these changes are moving forward.

But this won’t be the last we hear of the bill, its contents, and the application out there in the real world.

I fear that this week’s news is only the beginning…

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32 Comments

  1. Fred Guy

    at 6:42 am

    A real estate agent is biased in favour of landlords! No kidding. Lol.

    This is how we lose credibility in the marketplace. It would have been better to leave this news story alone. Or write a neutral explanation of the bill.

    1. Jenn

      at 10:48 am

      You’re an idiot.

      Being neutral is exactly the problem right now. Nobody ever wants to stick their neck out for fear of being cancelled. Good on David for doing so.

      1. Graham

        at 1:01 pm

        Has that guy ever read this blog? Neither of his options sound like something David would write.

      2. Fred Guy

        at 8:39 am

        He didn’t stick his neck out. This is only what us landowners want to hear – that the government should protect ownership rights and not housing rights.

        This lack of balance is good sales but bad policy.

  2. Appraiser

    at 8:04 am

    Much ado about very little, I fear.

    Landlord and tenant disputes represent a very small percentage of the total cohort to begin with, and nightmare tenants are even more rare (thankfully).

    Makes for great headlines though.

    Although the congresswomans tweet might seem outrageous at first blush, I think we will see a strong tilt toward the provision of a larger government social safety net in the U.S. under the Democrats over the next 20 years (Yup – Trump has poisoned the well for the GOP for at least one generation).

    The conversations around universal basic income, defunding / redefining police forces, corporate responsibility, social housing, a just society, etc. will only grow in the coming years.

  3. Julia

    at 8:50 am

    What a nightmare. And some wonder why more homeowners in residential neighbourhoods are not renting out their basements or ‘extra bedrooms’ LOL . You could not pay me enough to deal with a tenant.

    1. hoob

      at 1:28 pm

      Yup… My mom has a fully legal, finished, separated complete basement apartment in her house. She never uses the space personally for anything. It’s not worth the risk and hassle to have a tenant so she leaves it completely vacant.

  4. Verbal Kint

    at 10:29 am

    Where’s David’s famous demand for personal responsibility? Somebody buys a condo specifically to rent out (for now), is represented in the purchase AND the lease by a colleague of David’s, tenants are repped by a “respectable” agent — and NOBODY sniffs out the weasel? Leasing a condo to hold ragers in isn’t the M.O. of a criminal mastermind, so a bit more homework by one of the three monkeys (see no evil, hear no evil, and say no evil) should’ve uncovered it. More of a focus on THAT would’ve been more your style, David, rather than talking about government solutions.

    And if the parties were as disruptive as described, the condo corporation is likely on its way to having the unit sold under court order.

  5. Marty

    at 10:40 am

    I actually agree with some of the other comments.

    Awful landlord/tenant situations are not the norm, most run just fine – and we only hear about the disasters on either side.

    And YES, landlords have to do a better job screening tenants – like ASKING THEIR LAST TWO LANDLORDS for a new, written letter of reference. Why is that so hard? Both parties win.

    1. Geoff

      at 11:56 am

      because if I had a nightmare tenant looking to leave, I would write a GLOWING letter of recommendation.

  6. H.C.

    at 10:44 am

    It reminds me of this tenant con: https://www.thestar.com/news/gta/2016/10/02/tenant-turned-airbnb-proprietor-becomes-landlords-nightmare.html

    Where the tenant not only avoided paying rent, but also made money from airbnb-type of services.

    The bill encourages dialogue first before eviction and to get to that point would need months of non-payment anyways.

    I also do not understand why the protesters were protesting to a municipal leader over something that is enacted under Provincial jurisdiction.

    It’s similar to protesting at Parliament Hill because the garbage is overflowing at Trinity Bellwoods.

  7. Andrew

    at 10:54 am

    You had me at the beginning, but lost me at the end.

    I’m of the belief no one should “purchase” property they cannot afford without tenants. Those who are forced to rent due to being early in their careers in a tough city to buy are at the mercy of those who have positioned themselves to pay a downpayment, get a loan and now have those unable to do anything else pay their mortgage. It’s a necessity, but exploitative by nature.

    No investment should be a guarantee. There is always a risk. Just like you can put your money into a promising stock that tanks, accept the risk that if you put your money in a rental property it has the potential to turn into a nightmare.

    All this to say, yes, there are problem tenants, and they should be dealt with. I am an owner, and the only reason I haven’t jumped into renting is that I believe landlord rights are limited (and rightly so) and don’t want the headache I could get. But a rant against a progressive congresswoman whose main thrust is to help provide rental and mortgage relief for those in terrible economic circumstance in favour of a Margaret Thatcher quote? Doesn’t sit right.

    1. Free Market

      at 11:21 am

      @ Andrew

      How is buying real estate as an investment “exploitive?”

      Without investors buying condos to rent out, half of the downtown core wouldn’t have been built over the last twenty years. Then we’d be even worse off and in a deeper housing crisis.

      “At the mercy of those who have positioned themselves to pay a down payment.” You are arguing against capitalism, the free market, and investing.

      Just to be clear: should rent and mortgages be cancelled? And what happens when they are? What happens when the property owners go bankrupt and are forced to sell? What happens when they can no longer afford to buy goods and services and the economy shrinks? Has anyone in favour of this movement thought about next steps?

    2. Marty

      at 11:28 am

      I think people should buy property for whatever reason they want and under any circumstances they understand.

  8. Kyle

    at 11:38 am

    I think most landlords and most tenants have a mutually beneficial symbiotic relationship and are on good terms. But as we all know there are bad actors on both sides. There are shitty landlords and professional tenants, and that is exactly who i see this Bill being targeted at. Personally, i have no issues with what’s in Bill 184. In fact i think, the protection it provides to regular landlords having to deal with problem tenants, and regular tenants having to deal with problem landlords is long overdue.

  9. jf007

    at 11:49 am

    the discourse of late has changed to somehow shame landlords of even a single investment condo, for asking rent on their units. As if the world has stopped because of COVID. The socialist BS i hear about rents, landlords etc is too much for me. There are bad apples galore but that doesn’t mean that entire system is rotten. To be able to rent is not a right by any means…in Ontario it somehow is solely the responsibility of landlord to be the bearer of losses..ppl forget a landlord is also a businessman of sort who needs to be paid for the service he/she is providing which is use of unit. We don’t go about demanding service from others without paying then why ask the same of landlords be it for unit or more..

    1. J G

      at 12:21 pm

      There are realities to being a landlord, which differs than the back-of-the-napkin calculations made by perma-bull realtor prior to buying the condo.

      Tenants are usually not well off, so they will do thing to save $20-$30 a month. Things that might annoy you. Until someone becomes a landlord many times over (like I have), that person do not know what’s its really like and can only listen to perma-bulls (who have their own agendas).

  10. J G

    at 12:05 pm

    There are risks that come with investing in RE, including the loss of rental income and damage to property. Most RE investors don’t recognize that and are always complaining.
    If the company of a stock I own has a scandal and I lose my investment, there’s pretty much nothing I can do (realistically).

    There are laws against accounting scandals just like there are laws against problem tenants, but investors need to understand there are risks. That’s why it’s called an “investment condo” and not a GIC condo.

    1. jf007

      at 12:48 pm

      Unfortunately though the laws for Landlords in case of Ontario go through the LTB which is severely backlogged..so all the while one’s application is pending with the board you could have a tenant who is not paying rent, mortgage still has to be carried and the condo could be getting trashed till it needs be gutted entirely..problem is not only unscrupulous Landlord and Tenants, bigger problem in my opinion is the archaic LTB. For system to be balanced the judicial processes need to be as balanced and timely else all we will keep doing is legislation upon legislation to fix a problem with no end in sight..

    2. J G

      at 3:40 pm

      @jf007 Think about it. Why is the LTB so slow? The government is never slow is assessing you penalty for late tax filed, your property tax always arrive on time, etc.

      It’s because housing is a sensitive issue. Government only cares about 1) You paying taxes 2) No social unrest/problems and 3) You like them and vote for them again. Majority of people are NOT landlords, a good portion don’t even own a primary residence.

      LTB is slow because government want them to be slow (and for good reason).

      1. Fearless Freep

        at 11:59 pm

        Or maybe the LTB is simply underfunded. Occam’s razor.

  11. Patty

    at 1:23 pm

    I’ve sat through several landlord/tenant ‘courts’ and heard the unspeakable things tenants have done. Always the landlord was told/expected to try and work things out. I will never purchase a rental property.

  12. Clifford

    at 2:47 pm

    I’ve been a landlord for 10 years now. Some people here have no idea what they’re talking about. Being a landlord in Ontario is not for the weak.

    You have the tenants that pay rent on time but smash the shit out of your property and have parties all night. They look excellent on paper. You see, they are getting better at appearing like the perfect tenants so it’s important to vet them properly. Even so, some may slip through the cracks.

    There are also a lot of things tenants get away with that aren’t going to get media attention. Like renting out a 2 bedroom to 2 people but it end ups being 4 people. Nothing you can do. Or tenants putting your condo on airbnb. As long as they pay the rent on time, LTB is utterly useless.

    Or the tenant that likes to always pay late. Nothing you can do.

    I can go on and on for days. Now with rents dropping, we’ll see landlords rather just keep units empty for the time being. I don’t blame them. Tenants are too much of a headache in this day and age. Sucks for the good tenants but landlords simply don’t want to get burned again. And now seeing that the government can flat out tell people to not pay rent and block landlords from doing anything about it, we already know what the future looks like and it’s not good if you’re a landlord. The government will use your property as social housing.

    The media tells one side of the story and demonize landlords. This is exactly what happened when rent control was changed. Media published some outlandish stories, tenants complained and our liberal government doing what they do bent over backwards for them.

    New landlords in Ontario? Not worth it. I’m only in the game because I bought a long time ago.

    100% with David on this one.

    1. Alex

      at 5:28 pm

      Totally agree that government is pushing their responsibility for building/maintaining of housing ( not only social, just overall ) to private sector and is producing a lot of new laws regulating them. All risks are pushed to the investors ( and some of them are substantial and sudden as those new regulations ) – at least in the last 20-30 years as there were no new social/corporate housing for that long. The trend is not only in Ontario, it is everywhere. As for my real estate investments, I would buy only the one I could move to if tenant is not to my liking whether he/she does not pay on time or trashing the place. I am sure that young couple could have moved to their condo and live there for one year just to get rid of the problematic client. Their parents could rent the condo to somebody else or sell it. Voila!

  13. J

    at 4:17 pm

    Bad tenants like those described above deserve to rot in hell. However, while it may be difficult to evict problem tenants, a landlord can offer to pay them to leave. This might mean that the bad tenant “wins” but the landlord saves time, legal expenses, and gets to move on with their life.

    Investing and running a business bears risks and being a landlord is no exception. Think of spending ~$10k for a tenant to leave like needing to replace an appliance or a special assessment.

    Although laws and regulations may sway from year to year, bad tenants and laws that are arguably unfavourable towards landlords have always existed and will continue to exist. A prospective landlord needs to consider such risks. If regulations and LTB practices aren’t favourable and the risk isn’t worth the reward then they can move on to an alternative business/investment.

    For those that refuse to consider investing in anything but real estate but don’t want to risk dealing with problem tenants, may I introduce you to the Real Estate Investment Trust. No headaches plus infinitely better diversification (resulting in less risk and a better risk/reward ratio).

  14. Dave

    at 11:49 am

    I find it strange that these protesters don’t line up outside grocery stores telling people that it’s ok to steal food, because the stores are “greedy corporations”, or outside pharmacies encouraging people to steal medication. How did shelter get special status versus other necessities?

    1. Geoff

      at 12:02 pm

      For the same reason that people who illegally download movies are ‘pirates’ and not thieves. Some things people just a box around and call what should be theft… not theft.

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