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Landlord Solutions Presents

Landlord Solutions Presents. Spring Networking Forum. Landlords’ Self-Help Centre May , 2012. Landlord Solutions Presents. Tips for Selecting the Right Tenant What should be in a Rental Application & Lease Rules for Entering into a Rental Unit Some Basic Rules about Rent.

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Landlord Solutions Presents

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  1. Landlord Solutions Presents Spring Networking Forum Landlords’ Self-Help Centre May, 2012

  2. Landlord Solutions Presents Tips for Selecting the Right Tenant What should be in a Rental Application & Lease Rules for Entering into a Rental Unit Some Basic Rules about Rent

  3. These are forms available from our web site in PDF format, so that you may have them as a reference if you wish. Also included is a rental application and tenancy agreement in Word format so that you may edit and distribute them, as well as other articles and guides. You can obtain them by going to: http://www.LandlordSolutions.ca and then clicking on the link for News, Publications and Forms, and then clicking on the link called Realtors’ Section, and logging in as “realtor”, password “mreb” without the quotation marks. You can then download the files to your computer. Blank copies of these forms as well as other forms and pamphlets can be obtained through the Board’s web site at: http://www.ltb.gov.on.ca and then clicking on the link for Forms and Publications. Where To Get More Information

  4. Part 1Tips for Selecting the Right Tenant

  5. Most people don’t get the process started until 45 days have passed. Two months rent is already owing. Serve N4 notice, 14 days but if served by mail add 19 days. Tenant stops paying rent. File an application with the Board if not paid. Usual delay of about 35 days before hearing date. Attend hearing, tenant asks for adjournment or raises maintenance issues. Adjournment is granted, add another 35 days. How Long does it Take to Evict a Tenant for Rent

  6. Matter returns, finally the evidence is heard. Assuming eviction is ordered, wait 11 – 30 days for relief granted by Member prior to filing with Sheriff. Sheriff delay of about one month is normal, so add 30 days. If tenant files a request for a review just before Sheriff enforces, eviction will be stayed pending outcome. Add 20 days to hearing, and another 30 days for Sheriff. The shortest an eviction will take, including the Sheriff enforcement is about 80 days, but it can easily go to 235 days from time the first payment is missed. How Long does it Take to Evict a Tenant for Rent

  7. Length of the eviction process makes it crucial to get the right tenants The interview process. Don’t believe everything you’re told. Verify everything, make sure you know who you are speaking to The importance of a proper rental application form Doing credit and background checks on a prospective Tenant Talking to former landlords. How to get at the truth. The rent deposit, getting it up-front with the application Never make a quick decision because the tenant comes with cash Selecting the Right Tenants

  8. Use a professional screening service, but finally…go with your gut • Speak to the employer, go to where they work and check with the HR department • Get a copy of their ID, make sure they are who they say they are • If you are still not sure, ask to meet them in the place they currently live for an interview • What s. 10 of the Residential Tenancies Act says about screening • What Regulation 290/98 of the Human Rights Code says about screening Selecting the Right Tenants

  9. Human Rights Code – Prospective Tenancies Residential Tenancies Act 2006 S.O. 2006, CHAPTER 17 Human Rights Code - Selecting prospective tenants 10.  In selecting prospective tenants, landlords may use, in the manner prescribed in the regulations made under the Human Rights Code, income information, credit checks, credit references, rental history, guarantees, or other similar business practices as prescribed in those regulations.  2006, c. 17, s. 10.

  10. Human Rights Code – Prospective Tenancies Human Rights Code - ONTARIO REGULATION 290/98 BUSINESS PRACTICES PERMISSIBLE TO LANDLORDS IN SELECTING PROSPECTIVE TENANTS FOR RESIDENTIAL ACCOMMODATION 1.  (1)  A landlord may request credit references and rental history information, or either of them, from a prospective tenant and may request from a prospective tenant authorization to conduct credit checks on the prospective tenant. O. Reg. 290/98, s. 1 (1). (2)  A landlord may consider credit references, rental history information and credit checks obtained pursuant to requests under subsection (1), alone or in any combination, in order to assess the prospective tenant and the landlord may select or refuse the prospective tenant accordingly. O. Reg. 290/98, s. 1 (2). (3)  A landlord may request income information from a prospective tenant only if the landlord also requests information listed in subsection (1). O. Reg. 290/98, s. 1 (3). (4)  A landlord may consider income information about a prospective tenant in order to assess the prospective tenant and the landlord may select or refuse the prospective tenant accordingly only if the landlord considers the income information together with all the other information that was obtained by the landlord pursuant to requests under subsection (1). O. Reg. 290/98, s. 1 (4). (5)  If, after requesting the information listed in subsections (1) and (3), a landlord only obtains income information about a prospective tenant, the landlord may consider the income information alone in order to assess the prospective tenant and the landlord may select or refuse the prospective tenant accordingly. O. Reg. 290/98, s. 1 (5).

  11. Human Rights Code – Prospective Tenancies Human Rights Code ONTARIO REGULATION 290/98 BUSINESS PRACTICES PERMISSIBLE TO LANDLORDS IN SELECTING PROSPECTIVE TENANTS FOR RESIDENTIAL ACCOMMODATION (Cont.) 2.  (1)  A landlord may require a prospective tenant to obtain a guarantee for the rent. O. Reg. 290/98, s. 2 (1). (2)  A landlord may require a prospective tenant to pay a security deposit in accordance with sections 117 and 118 of the Residential Tenancies Act . 3.  In selecting a prospective tenant, a landlord of a rental unit described in paragraph 1, 1.1, 2 or 3 of subsection 5 (1) or subsection 6 (1) of the Tenant Protection Act, 1997 may request and use income information about a prospective tenant in order to determine a prospective tenant's eligibility for rent in an amount geared-to-income and, when requesting and using the income information for that purpose only, the landlord is not bound by subsections 1 (3) and (4). O. Reg. 290/98, s. 3; O. Reg. 646/00, s. 1. 4.  Nothing in this Regulation authorizes a landlord to refuse accommodation to any person because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, same-sex partnership status, family status, handicap or the receipt of public assistance. O. Reg. 290/98, s. 4; O. Reg. 31/00, s. 1.

  12. Part 2What Should be in an Application and Lease

  13. A rental application should contain enough information to allow you to make a decision about accepting or rejecting a tenant, but it must not violate the Human Rights Code. • There is a recent decision from the Ontario Court of Appeal that makes it especially important that you use the proper wording related to rent deposits so that if the tenant changes their mind and doesn’t move in, you can apply the deposit as rent. • Be careful in condos. Tenants must agree to comply with the Rules, Declaration and Bylaw, and must receive copies of same upon signing the lease. • The importance of PIPEDA compliance in applications and leases • Leases must contain the name and address of the landlord for the purpose of service of documents, otherwise the tenant’s obligation to pay rent is suspended. Some Tips for Leases & Applications

  14. Residential leases contain six basic elements: • Party names • Rent amount • Lease Term & commencement date, and renewals of term if any • Rent deposit amount • Services, facilities and who pays for them • The all-important and often-forgotten “Rules” Some Tips for Leases & Applications

  15. Rules cover issues such as • Exclusive versus common use areas of complex • Cars and parking • Smoking • Rent discounts • Balconies, bar-be-cues, storage, waterbeds, insurance • Complying with municipal rules about garbage • Boundaries of the demised premises, for instance on a farm Some Tips for Leases & Applications

  16. Part 3Rules about Entry into the Rental Unit

  17. Rules Regarding Entry into the Rental Unit • Landlord are responsible to repair, maintain and keep the unit fit for habitation. There are no exceptions, and the landlord cannot contract out of this responsibility. In order to repair and maintain, the landlord needs to understand about entering the unit. • Landlords may enter into a rental unit upon giving 24 hours written notice for entry between the hours of 8 am and 8 pm. Landlords must include the date and time of entry in the notice. The reason for the intended entry must be outlined in the written notice. • Landlords must specific a reasonable window of entry, usually 2 hours but no more than 4 hours. In an emergency, landlords may enter at any time. • The Residential Tenancies Act says that if the tenant consents to entry at the time of entry, the entry is lawful. However, a recent Court decision has put that provision of the Act in doubt. • A landlord may enter a tenants unit to show it to a prospective tenant after making their best efforts to contact and notify the tenant, if either of them has given a notice of termination to the other party.

  18. Rules Regarding Entry into the Rental Unit • A realtor may, with the written authorization of the landlord, enter the unit to • show the property to a prospective purchaser if 24 hours written notice is • given, and only between the hours of 8 am and 8 pm. • When proper notice is given, landlords or their agents have an unqualified • right of entry. Landlords do not need to ask permission if proper notice is • given. • If the tenant prohibits them from entering, or changes the locks, the landlord • can file an application to the Board, or call the Ministry of Housing’s • Investigation and Enforcement unit at 416-585-7214. They will advise the • tenants that they must let you in. • Landlords can also make applications to the Board both for recovery of money • spent to change the locks back, and even for eviction based on the tenant’s • action of not letting them into the unit.

  19. Part 4Some Basic Rules about Rent

  20. Some Basic Facts about Rents in Ontario • When a tenant first moves into a rental unit, the parties can agree to any • rent amount they choose. This system is called “Vacancy Decontrol”. There • is a private members bill before the legislature currently to change that. • Once the tenant has moved in and the rent set, rent increases are tightly • controlled from that point forward. • Landlords have an obligation to pay interest annually on any last month’s rent • deposit, and the deposit cannot be equal to more than one month’s rent. • The province sets the annual rent increase maximum percentage annually for • the following year, and this percentage also determines the rate at which • interest is calculated on the last month’s rent deposit.

  21. Rents Can Only Increase in so Many Ways • Annually by the Provincial rent guideline unless the property is exempt from • the Guideline which may be true in newer buildings • By an order of the Board on an Above Guideline Application • If the landlord and tenant agree to the landlord providing a new facility or • service as permitted by the General Regulation, such as a parking spot, cable • TV or extra floor space • If the landlord and tenant agree that the landlord will do specified • improvements, using an LTB Form N10, but the increase can only be to a • maximum of 3% over the Guideline

  22. Increasing a Tenant’s Rent Requires the Following • At least 90 days notice of the intended rent increase must be given. • If you are late or short, by even one day, the notice must be re-served. • The rent can not be raised more than once every 12 months. • The percentage by which you raise the rent can not be more than the annual • Provincial rent increase guideline, with a few exceptions. In 2010 it was • 2.1%, but in 2011 it was just .7%. It has been set at 3.1% for 2012. • You must use a Landlord and Tenant Board approved form, the N1 • The effective date of the increase must be the first day of a rental period

  23. N1 Notice to Increase a Tenant’s Rent At least 90 days notice of the rent increase must be given, with the effective date on the first day of the rental period, and using the Board’s approved form. If you are late or short, by even one day, the notice must be re-served. The rent can not be raised more than once every 12 months. The percentage by which you raise the rent can not be more than the annual rent increase guideline, with a few exceptions.

  24. Last month’s rent deposit can be taken at the beginning of the tenancy if the parties have agreed to it in the tenancy agreement. After that, it’s too late. • Interest must be paid annually on the deposit, but instead of paying it out to the tenant, it can be used to “top up” the LMR deposit. • Damage deposits are prohibited by law. • The 12 month rule for deemed rent – No longer a certainty after Price. Odds and Ends Regarding Rent

  25. Historical Rent Increase Guidelines Maximum increase in2012 is 3.1% 2011 0.7% 2010 2.1%2009 1.8% 2008 1.4% 2007 2.6% 2006 2.1% 2005 1.5% 2004 2.9% 2003 2.9% 2002 3.9% 2001 2.9% 2000 2.6% 1999 3.0% 1998 3.0% 1997 2.8% 1996 2.8% 1995 2.9% 1994 3.2% 1993 4.9% 1992 6.0% 1991 5.4% 1990 4.6%

  26. Above Guideline Increase, an L5 can be Filed For…. • An extraordinary increase in realty taxes, year over year, comparing the base • year from the year before, to the current tax year. There is no limit on the • percentage increase that this application may yield. • An extraordinary increase in utilities, year over year, comparing the base year • period to the same period the year before. You must include all three • utilities, water, electricity and gas. There is no limit on the percentage • increase that this application may yield. • Eligible capital expenditures incurred respecting the residential complex or • one or more of the rental units in it. The maximum annual increase that may • be allowed in an application based on capital expenditures is 3% above the • guideline.  Where an application justifies more than 3%, the rent is increased • by 3% in the first year and any remaining increase may be taken in • subsequent years, to a maximum of two additional years at 3% per year.

  27. Wrap Up Thank you for attending today's presentation – your feedback is very important to us.

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