What Can A Landlord Do To Protect Him/Herself?


8 minute read

July 27, 2020

Famous last words, right?

I said, “Assuming that we can acknowledge that problem-tenants exist…”

But I don’t think we’re anywhere close to agreeing there.

After reading the comments on Friday’s blog, I’m amazed.  I just had no idea that some of my own readers would feel that a landlord doesn’t have the right to expect a tenant to pay their rent on time, or at all.  I’m turning 40-years-old this summer, and I went on TikTok the other day and had no clue what it was, or how to use it, so I recognize that the world is changing around me.  But some of the comments about the concept of renting being “exploitive” were just amazing.

One reader had a comment about how the “Cancel Rent, Cancel Mortgage” movement had ramifications beyond the comprehension of Joe Public, and this is something I’ve discussed with friends and colleagues over and over.  Do the members of that movement understand, as a reader commented, that if rent was “cancelled,” and a property owner had no rental income, that this person would lose their investment?  The fallout from there, if it happens to everybody everywhere, destroys the economy, which destroys society.  And I’m not over-stating this.  If everybody out there had no income (in a world where the government doesn’t hand out money…), and thus had no ability to buy goods and services, than the people who work in those fields of goods and services would also be out of work, and also have no income, and so on, and so on.  It’s a vicious circle.

This movement is insane, and it was invented by people that don’t understand economics, and whom, if you challenged them about, would likely reply with, “fuck that, man.”

Argue that tenants have rights.  Argue that landlords should accept the risk, and shut up about it.  But don’t argue that Santa Claus should “cancel rent and cancel mortgages” as though that’s a viable option in a world that exists outside of an acid trip.

So, for those of you who read Friday’s blog and do want to be a landlord, or who read Friday’s blog and don’t, but want to know what you can do to protect yourself, let’s discuss.

I described a situation at the onset where a colleague of mine was scammed, and a con artist ended up in his client’s unit.  Blog reader Verbal Kint asked how in the world this could happen, especially as there was not one, but two licensed real estate agents involved!

Great question.

The agent representing the tenant was a ‘name’ agent, but I feel he didn’t do his job, and didn’t care.  He’s simply representing the tenant, who randomly found him online, and he’s trying to make a quick thousand bucks.  When my colleague let this agent know that his “client” was actually a con artist, and asked the agent to repay the commission, he balked.  “It’s not my fault,” the agent said.  Yup.  Gotta love it.

As for the supporting documentation, the pay stubs and employment letter were falsified, the references were in on the scam, and the employer that my colleague spoke to worked for a company that specialized in deceiving landlords.

I’m not making this up.

Another colleague of mine (as you can tell, I talk to a lot of agents from other brokerages…) walked me through a massive scam that she uncovered last month.  She had a listing that clearly was targeted by scammers, since three successive prospective tenants turned out to be cons.

She called the supposed employer of the first tenant and he raved about the tenant.  He was convincing.  “Oh, thank goodness this call is for a reference for a rental!  I thought you were looking for a reference because he’s looking for a new job!  He’s so good at his job; he does the job of three people!  I swear, I could never, ever replace him!”

My colleague in this situation said her spidey-sense was tingling, and it just didn’t feel right.  She searched the internet for this employer, and found a different phone number for him, and called that one.  This time, the real person picked up, and he was not happy.

“No, I’m not giving a reference for a tenant,” he said.  “No, I don’t know this person.  No, this isn’t a trick.  No, no, no, honestly, I’m tired of this,” he said.

It seems that a few other agents had found his contact information and reached out to him, and he was fed up with the scam.

As two more offers to lease came in on this property, my colleague dove into an underground world of companies that specialize in falsifying documentation for fake tenants: employment letters, pay stubs, bank statements, commission cheques, and the like.  Not only that, there are people you can hire at 1-800 numbers that will pretend to be a personal reference, an employer, or a past landlord, all for a fee.

My colleague does about forty rentals a year, so if anybody knows this side of the business inside and out, it’s her.  And she said that scammers have never been more sophisticated, and they’ve never had more tools at their disposal.

Do you know what else she says?

That the tenants’ agents are complicit.

TREB, OREA, RECO – they’re not going to like what I’m about to say, but here goes.

My colleague, upon uncovering this massive fraud, called the first agent and told her.  That agent didn’t seem surprised at all, and instead said, “But look at their credit score!  It’s over 800!  And the tenant makes $90,000 per year!”

My colleague said, “Didn’t you hear me?  This is fraud!  None of this checks out!”  But the agent on the other end of the line just kept pushing the tenant.

This happened with the second and third offers as well.

That’s no coincidence.  And word on the street is that sometimes these agents get a small kickback for helping with the fraud.

If this is true, then these agents should not just lose their real estate licenses; they should be in jail.

Then again, some folks out there want to CANCEL RENT and CANCEL MORTGAGES, so maybe they feel these agents should be placed atop a life-size cake or something.

So what can you do to protect yourself?  What are the typical steps involved?

There are three things that need to accompany any Offer to Lease:

1) Credit Check
2) Employment Letter
3) OREA Rental Application

The credit check has to be from Equfiax or TransUnion.  Hard stop there.  It has to be a full credit report, every single page, not just the first page.  This has to be a clean copy, downloaded in a PDF, unaltered.  And even then, you proceed carefully.

Anybody can go onto the internet right now and save a company logo for Canadian Tire, or Cadillac Fairview, or CIBC, and then paste that into Microsoft Word, type out a letter, sign with a name you found on LinkedIn, and then save as a PDF.  So when you, as a landlord, or an agent, receive an employment letter, you’re not only doing due diligence on the tenant, you’re doing it on the person who signed that letter.

Last month, I called the human resources manager listed on the employment letter for a prospective tenant, and I asked her if she was real.  She laughed, but I was trying to break the ice with what came next.  I was on her LinkedIn profile and asked here where she had previously worked.  She said, “Are you serious?”  I told her that I would appreciate the help.  She rattled off the past two companies, which matched what was on LinkedIn, and while I know this could be faked too, it was a step in the right direction.

Then I called the phone number provided for the corporate headquarters and asked for this person, and they transferred me to her.  “Me again,” I told her.  “Just making sure, thanks!”

This all seems like overkill, but it’s not.  It’s due diligence.

Make sure that employment letter is real, and make sure the person who signed it is a real person, and then make sure you’re actually talking to he or she.

The OREA rental application is really just a summary of the prospective tenant’s name, age, date of birth, last places of residence, job history, etc., but it’s a place where a scammer can slip up if this doesn’t match with what other documents and information they submit.

If personal references are given, then look them up too.  Make sure they are real, and if you don’t trust them, then ask for other personal references, and/or business references.

Call the past employer and the past landlords, and undertake the same diligence as above.

Scammers will throw out multiple attempts at the same time.  Quantity vs. quality, that’s the name of the game.  So if they’ve gone to great lengths to hire a fake 1-800 number to pretend to be their current employer, do you think they did the same thing for their past two employers, two personal references, and past two landlords?  Seven fake people created through 1-800 numbers?  I highly doubt it.

You only need to snuff out one fake reference to spot the con.

Now, it doesn’t take a rigged United States election to tell us that social media profiles can be faked, but I think we all know the difference between the pretty girl who just moved to Toronto, has only six friends on Facebook, and for some reason has sent you a friend-request, versus the person with a complete profile that was launched in 2007, and who has 900 friends.

Facebook and Instagram are great places to search for the prospective tenant as well as the other people included on the application.

LinkedIn is harder to fake, and because business-people take it more seriously, many users will refuse to just click “accept” for anybody.  So if a prospective tenant has 300 connections on LinkedIn, and five recommendations/testimonials from the last few years, then that adds credibility.

Last week, I received an application from a candidate who posted “lived with parents” as her second-to-last place of residence.  So I looked up that property in Land Registry and matched the applicant’s last name to that of the people on title.  Then I looked those people up on title too.

This applicant had a full LinkedIn profile, complete with jobs dating back to when she was 13-years-old.  I found photos of her at the university she said she attended, as well as at two volunteer jobs.  I also found her parents, who seem quite well off, so that’s always nice.  Then I found that she had two Facebook friends in common with kids who I used to coach baseball, who are now grown men.

Suffice it to say, this was a real person, making a genuine application.  Her credit was excellent and she had more than enough income at her very impressive job to carry this condo, and I told my client, “We’ve got ourselves a tenant.”

The truth is: you can usually tell when you need to do some more sleuthing.  You just get that “feeling,” and hopefully, your concerns end up being for naught.  But I’ve snuffed out scams before, and I’ve also found prospective tenants who have very different online personas from the ones they’re portraying in their application!  Like the young lady who made $95,000 per year at a pizza joint, but had some pretty impressive online ads for services that had nothing to do with pizza…

If all else fails, you can always ask to meet the prospective tenant in person.

This opens the landlord up to a discrimination case, but I had clients once who were both lawyers (one is now a sitting judge) who had absolutely no issue with meeting the tenant in person.  They said, “He’s perfect on paper and has nothing to worry about.  Unless he shows up and is 65 instead of 25, or has gang-tattoos on his neck when none show in his driver’s license photo, then we’re fine.”  They argued that both those somewhat facetious examples would represent misrepresentation on the part of the prospective tenant, and they also argued that, if push came to shove, they were fine to suffer whatever consequences came their way.

Many landlords are afraid to meet tenants for exactly this reason, and in today’s social climate, I don’t blame them.  I would almost never advise a landlord do this, unless the tenant asked for the meeting, and the landlord was 99.9% certain that they were going to accept the tenant’s application.  Hopefully that tenant doesn’t show up with three pit-bulls that weren’t disclosed on the application…

So for those of you who fear being a landlord, honestly, fear not.

It’s certainly not for everybody.  I haven’t been a landlord in almost a decade.

But for those that do, heed my advice above.  There is simply no such thing as “too much diligence.”  Trust me on that…

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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  1. Thomas

    at 9:30 am

    Such fraud has to be rooted out and there should be enough deterrent measures! I also keep hearing about people fabricating documents for mortgage approvals. How prevalent is that?

  2. Appraiser

    at 9:31 am

    “Overall, 90% of all new condominium units in development in the GTA were pre-sold in Q2-2020, rising from 88% in Q2-2019. Unsold supply declined 19% year-over-year to 12,778 units and fell 17% below the 10-year Q2 average of 15,468 units.”

    “Selling prices within new project launches in the second quarter were notably higher than projects launched in the same submarkets since the second half of 2019, setting new highs for their respective market areas in most cases. As a whole, average selling prices for units in actively marketed new condo projects in development across the GTA averaged a record high $867 psf, edging up from $864 psf in Q1-2020 and rising 8% year-over-year, reflecting broad-based increases in selling prices.”


    1. Joe

      at 12:41 pm

      Great article! Thank you so much! I have a question, how do you search who is the owner of a property in case a tenant says he live with parents? Thanks!!

  3. Jimbo

    at 12:07 pm

    One could argue that a working girl is more productive to society than a simple house wife so I don’t see an issue renting to one.

    We need to develop a way to route out and punish those who operate these schemes without hurting our fundamental rights. It becomes very difficult with these 1-800 and internet companies

    1. Ed

      at 1:24 pm

      Depends if the working girl conducts business at home, her hours of business and the level of her clientele.

      1. Jimbo

        at 12:49 pm

        Add long as it isn’t a party it shouldn’t matter too much. If there is a lot of excessive noise I can see it being an issue but I’ve had couple nieghbors that left nothing to the imagination almost every night….

  4. Marty

    at 12:22 pm

    Good advice here. It’s not that difficult. Takes a bit of time, but compared to a bum tenant, it’s an easy choice.

    1. Clifford

      at 3:01 pm

      Um, many people will be living in condos because that’s what they can afford. During and after the pandemic, people will be living in condos. Do you really think cities will start building cheap houses in the downtown cores? I live in a condo and have no issue. I don’t see how the pandemic changes anything.

      1. Jimbo

        at 12:50 pm

        You probably are not out scratching cars because their licence plate isn’t from your province of residence.

  5. J G

    at 2:53 pm

    Good tips David! Landlords should do as much of what you mentioned as possible.

    The other problem is excellent tenants don’t always come. You’ll have to choose between settling for less ideal candidates vs. keep waiting. Not a easy choice sometimes.

    1. jeanmarc

      at 7:34 pm

      Settling for less should not be an option. This is exactly what the scammers are looking for. If you are uncertain of a potential tenant, don’t rent out. If you are an RE investor, ensure you have the sufficient funds to carry the property or don’t bother getting into this business.

      1. condodweller

        at 11:35 pm

        This is true but it requires foresight, risk assessment and proper planning. Not like many investors who are relying on value increases with no reserves. When you become a franchisee the franchisor often requires you to have hundreds of thousands of $$ available as an operating budget to survive the lean times. Owning/renting properties as has been pointed out is a business. Landlords should have sufficient funds or access to funds to ride out downturns like these. Yes, covid is a black swan event, but you can plan for the unexpected.

  6. Gwen VK

    at 3:38 pm

    And… when you get a tenant, put EVERYTHING in writing. After spending days in Landlord-Tenant court, I heard that over and over: “Do you have this in writing?” and more often than not — no, the landlord did not. Also keep immaculate records of what has been paid with documentation (cancelled cheque copies, e-transfers). Get familiar with all the forms (L1, L2…) and know how to file them.

    1. Clifford

      at 10:24 am

      Yup. No phonecalls. All my communication is in writing. If I can put it in the lease, I do.

      1. condodweller

        at 11:38 pm

        I have represented someone at the LTB and manged to evict a tenant. From what I saw it’s true, everything must be documented to increase a favourable outcome.

  7. Bruce McCormick

    at 5:37 pm

    Today’s post is an interesting and novel addition to the well-known disadvantages facing the landlord, particularly the amateur. Law, procedure or effective redress are all tilted to favour the tenant, including the bad ones. This is old news.

    My point is that this broad situation, well understood on the street, has diminished rental / accommodation potential in Toronto immeasurably, due to well-founded fear by owners that the risk of getting involved in something as simple as an apartment within their house is simply not worth it, no matter that rents are ‘high’. As they are.

    To digress, damage deposits. When I rent a car, I take on far more personal liability for loss of it than my tenant assumes for renting 1M of real estate.

    But all of the important factors are within the scope of provincial law and associated authorities. The same political figures, pretty much all, include housing affordability or supply as as constant worry-bead that really, really concerns them.

    There is a huge untapped supply of housing there now, sterilized by a regulatory regime treating private rental housing as a public utility. I believe a serious, pragmatic review of landlord tenant law that might level the playing field would increase rental supply. I equally believe that won’t happen given the cowardice of our political figures and the easy acceptance of mediocrity and stasis by the public at large.

    Toronto had another ‘housing crisis’ in the early post-war years, and the housing lent itself – as it still does – to multiple occupancy – and many people adapted in a simpler world when gross irresponsibility an uncontested basis for eviction.

    Nothing above is personal axe-to-grind. I’m an amateur landlord in central Toronto for over a decade and things have always worked out well. But I’ve known about the potential risks from the outset, and done it anyway, to the tangible satisfaction of all the parties. But most people I know – two living in 12 room houses – are not nearly so reckless.

    But thank-you David. I just learned that as a landlord my skills in plaster repair, plumbing issues and tax law not enough. I also need to be a sleuth, investigator and internet wizard.
    Your post today was the first on a tired, well known, topic that expanded our understanding of some grisly issues affecting any of us who might consider something so simple as renting property.

  8. jeanmarc

    at 7:21 pm

    With so much fraud going on out there, what’s on paper means didly squat. Every day, I receive spam calls from both my personal and business cell (I never answer if I don’t know who it is). This never happened 20 years ago so you can see how laxed the Canadian laws are here (CRTC wake up and actually do something to protect Canadians!).

    Look what happened on the weekend with this one. Landlord (bunch of investors) rented the house. Huge house party (over 200 people) in Brampton with gunslingers ready and willing. A heavy fine should be in place here.


    Also, a tenant being allowed to sublease is another tenant is another huge problem. There should be a law to ban this. Pure garbage.

    “Landlords are not allowed to unreasonably refuse a request for a sublet. This means that if a landlord decides to refuse a subtenant, he or she must have a good reason for doing so. Further, if the landlord refuses to allow the tenant to sublet the unit, or does not reply to the request within seven days, the tenant can apply to the Landlord and Tenant Board to determine if the sublease should be allowed.”

    1. condodweller

      at 11:39 pm

      yes, this subletting part is truly scary. How can the owner not have a say in who moves into their property. Is this allowed to happen anywhere else in the world?

  9. Chad

    at 8:54 pm

    Thank you. Great article!

  10. Sirgruper

    at 10:11 pm

    It’s funny. As a commercial landlord my strategy is to not worry about getting the last dollar and to get the best tenant. It has served me well. The problem with residential tenancy is if you underprice to get a great tenant you are stuck with that underpricing for a long time until they move. And sometimes they never do. I know two semis in Leslieville that each pay around $800.00 per month because they have been there for 30+ years. Good tenant but still… the system is not going to change as there are way more voting tenants than voting landlords. Good article. We always check social media and have avoided a few beauties in doing so. David, maybe a topic too outside this blog but have you ever written about buying a farm? With Covid and people looking at capital assets to store value at a low annual cost, many people I know are exploring it.

  11. Aleksandar Svenda

    at 7:03 pm

    Thanks for real advice for a small landlord , with just few units . Big corporation can afford to pay to many agency’s to check perspective tenants , and there info , but many owners don’t have resources to protect them self . For many , this is not second income , but rather investment for there children , or for there’s Retirment .

  12. condodweller

    at 11:27 pm

    I agree 100% on this one. I don’t see why things can’t be fair to both parties. I have read about many landlords that are just as bad going to great lengths to evict someone or outright raise the rent to force them out. I accept that as a landlord it’s my responsibility to ensure I am financially stable to ride out difficult times but I don’t think I should carry 100% of the burden. Unfortunately society seems to be going down the toilet. What’s scary is that our legal system lets it happen.

    Regarding the cancel rent/mortgage movement you might be surprised what’s coming down the pipe. With the advent of automation there will be an increasing number of jobs eliminated and we’ll get to the point where people will need social assistance to keep a roof over their heads and eat. There are TED talks about this already, look it up. Self driving cars will soon eliminate ALL professional drivers, humanoid robots like the ones developed by Boston Dynamics will eventually replace any repetitive jobs. It’s amazing what they are able to do. What was that movie, Irobot, where the evil corporation that manufactured the robots owned everything? It’s not if, but when it’s going to happen. Ok, I’m going to take my tin hat off now….

  13. Izzy Bedibida

    at 7:40 pm

    One of the many reasons that I have stuck with REITs

  14. Joe

    at 1:21 pm

    Great article! Thank you so much! I have a question, how do you search who is the owner of a property in case a tenant says he live with parents? Thanks!!

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