Is the deck stacked against small landlords?

ANALYSIS: In Ontario, the process of evicting problem tenants is long and expensive — and there are few resources to help landlords through it, writes Josh Dehaas
By Josh Dehaas - Published on July 26, 2018
apartment for rent sign
The typical wait for a hearing over non-payment of rent in Ontario is 29 days, far longer than in other provinces. (iStock.com)

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It’s 9:29 on a muggy June morning when the door to the hearing room at Toronto’s Landlord and Tenant Board office squeaks open. Heads spin around to see who’s arrived. Landlord Sandra Lewis lets out a sigh. It’s her tenant, Donna Smith.

Lewis was hoping Smith wouldn’t turn up for the 9:30 hearing. She’s heard from the other landlords here that tenants who don't show up are more likely to be evicted. Lewis desperately wants Smith ordered out of her basement.

Smith hasn’t paid the rent since December, and Lewis, a single mother who works part time, depends on that $1,000 a month to pay her mortgage. She's had to borrow money from her parents to make up the difference.

“I’m close to losing my house,” she says.

 

It’s not just the lost rent — $6,000 and counting — that’s causing Lewis stress. She says she’s felt unsafe living with her two daughters in her own home for more than a year now.

When Lewis bought the semi-detached home near Toronto’s Little India neighbourhood in December 2016, Smith was already renting the basement apartment. At first, she was quiet and paid on time.

But last summer, visitors looking for Smith began banging on the door at all hours of the night. Since then, Lewis has come home to find the door kicked in, the windows broken. The police have visited dozens of times, she says.

In December, Lewis told Smith she would need to be gone by February 1. The plan was for Lewis’s mother to move into the space and help with the child care; Lewis would then be able to take on more paid work. Lewis says that Smith agreed to leave and stopped paying the rent.

But when March rolled around, Smith hadn’t left, so Lewis turned to Ontario’s Landlord and Tenant Board (LTB) for help. What she found was a slow system that seems stacked against small landlords, who are sometimes struggling financially.

Lewis filled out L3 and L9 applications to evict Smith and collect the unpaid rent, and paid the board $190 to schedule a hearing on those matters. The hearing was scheduled for April 20, which would mean that Smith could live in her house for free for several more weeks.

After she posted about her ordeal on Facebook, other landlords informed her that she might be able to speed up the process with a different form, an L2, so Lewis went back to the tribunal office and paid another $190.

When April 20 rolled around, Lewis showed up hoping for a decision.

But Smith had met with the duty counsel offered to all tenants at such hearings, and she told the adjudicator that she wasn’t ready for the hearing. She requested that it be put off to another day. That would mean several more weeks of her living in Lewis’s home, not paying rent, but the adjudicator granted the request.

 

Which brings us back to this muggy June morning. The adjudicator starts promptly at 9:30 a.m., announcing that all the tenants in the room should make use of the “excellent” free legal advice available through Legal Aid Ontario.

Smith leaves the room while the judge hears other cases. She returns around 10 a.m., just as their file number is being called. Smith and Lewis head to the front of the room. Smith again requests to have the hearing put off to another day. This time she says that police “trashed” her apartment — destroying relevant paperwork — and that she’s feeling ill. The adjudicator refuses. He asks why she hasn’t paid her rent. Smith says she couldn't pay because police had seized $2,000 from her. (A police spokesperson later told TVO.org that money is sometimes seized if it’s suspected of being the proceeds of crime, but she would not comment on Smith’s case as the matter is before the courts.)

The adjudicator then lets Lewis speak; mostly, he wants her to explain when it was that she filed the various forms. He then turns back to Smith to ask whether she did, in fact, agree in December to move out, as Lewis has alleged. Smith says she agreed, but only because she had “no choice.” He asks again, and Smith repeats her answer. After some back and forth, the adjudicator asks Smith whether she has any more to say. Suddenly, she backtracks and claims that she had never agreed to leave. The adjudicator seems to have heard enough. He tells the two women he will send his decision in the mail within 30 days.

 

It’s now been more than three months since Lewis filed her initial paperwork, and this roughly 10-minute hearing ends without a resolution.

 

Smith could face significant challenges — ending up homeless in a city with high housing costs. But because Smith didn’t hold up her end of a contract, Lewis’s life has been disrupted, too.

Lewis believes the system works far too slowly, and she’s not alone. The Federation of Rental Housing Providers of Ontario reported in 2011 that the typical wait for a hearing over non-payment of rent in Ontario was 29 days, compared to 12 days in Manitoba, 11 days in Quebec, nine days in Nova Scotia, seven days in Saskatchewan, five days in British Columbia, and two days in Alberta. The FRPO said at the time that it typically takes 90 days and costs $5,250 — plus administrative time and lost productivity — to evict a tenant who stops paying rent.

Wait times haven’t improved much in Ontario since then. In the first three months of 2018, the average wait for the first hearing was 32 days in Toronto and 28 days provincewide. As FRPO pointed out in its report, requests for adjournment to get legal advice are “almost always” granted, typically adding 30 days to the process.

“They should speed up the timelines, and they should also give equal treatment to tenants and landlords on the day of hearing,” Lewis says.

“Why does only the tenant have legal advice?” she adds. “How is that fair?”

C. April Stewart, a paralegal who guides small landlords through the LTB process, says experiences like Lewis’s are not uncommon. In fact, that’s why she started her business, Landlord Legal, nearly two decades ago.

Even when an eviction goes well, it tends to take 12 to 16 weeks to get rid of a problem tenant, according to Stewart. When clients are savvier, she says, the process can drag on for six months or longer — the final option involves the landlord paying more than $300 to hire a sheriff to physically remove the tenant.

“For a small landlord who wasn’t aware of what this could be, it’s very emotional,” Stewart says. “It’s very shocking to them.”

Stewart has dealt with landlords who appear to be in worse financial shape than their tenants. But the system, she says, assumes they have money to spare.

“A landlord who wants a day at the tribunal for an eviction application, they have to pay either $175 or $190,” Stewart says. “A tenant who wants their day in court has to pay $50. Why? It’s as if they’re painting all landlords with the rich brush and painting all tenants with the poor brush.”

And while tenants get access to free duty counsel, landlords have to hire their own legal representation, which can cost upwards of $2,000.

“The challenge with a small landlord is they’re not getting their rent, and they don’t understand the process, and now they have to come up with a significant amount of money to manage legal fees,” she says. “A lot of them can’t, so they try to navigate it on their own. They quickly find out that this is not amateur hour.”

Stewart points out that there is a publicly funded legal-aid service — the Landlord Self-Help Centre — but adds that it provides “very limited” services that don’t include representation at hearings.

“Some landlords don’t even know about it until they’re at a hearing, and they’re not in a position to go down the hall and call a 1-800 number,” Stewart says.

Lewis says she tried calling the Landlord Self-Help Centre multiple times with questions but couldn’t get through. On the June 13 hearing day, the adjudicator didn’t mention that it exists.

Susan Wankiewicz, the Landlord Self-Help Centre’s director, isn’t surprised. She says client interactions increased from 11,070 in 2015 to 18,552 in 2017, while staffing has stayed the same: five people. They often field more than 100 calls per day and wait times can stretch past 45 minutes or an hour.

Offering services at hearings isn’t something their $656,000 in annual provincial funding allows.

“We don’t have the capacity to manage the volume of incoming telephone calls, so we certainly couldn’t scrape together the resources to cover a program similar to tenant duty counsel at the board,” Wankiewicz says.

Through the website SecondSuites.info, Wankiewicz has tried to increase public education for people, such as Lewis, who are renting out parts of their homes — but it’s not clear many know about it. Wankiewicz says that she’s reluctant to even plug its educational materials on social media. “The problem with social media is that it creates more demand for our service, and we just don’t have capacity,” she says.

So what’s the new government to do if it wants to help small landlords like Lewis? Introduce legal or regulatory changes that would speed up the timelines or make the process fairer for small landlords, the women seem to agree.


FRPO also has some suggestions. One is to provide an injection of cash to clear the backlog of cases. Another is to consider replacing oral hearings for simple non-payment of rent with a process of written submissions — already in place in British Columbia — which would at least mean not having to take the day off work to attend the hearings. A third option would be to follow the lead of New Brunswick, where a landlord fills out the paperwork to start an eviction and then the Residential Tenancies Tribunal makes a decision without a hearing.
 

Not everyone believes the process takes too long or is unfair to landlords. Kenneth Hale, director of legal services at the Advocacy Centre for Tenants Ontario, says that tenants need to be able to explain their circumstances, particularly when it’s possible they could be pushed into homelessness, and that the tribunal works more quickly than most courts.

“You have to think about who these people are and how they get into these circumstances,” he says of tenants who end up at the tribunal. “I believe the vast majority of them don’t want to be there. They didn't ask to be laid off. They didn’t ask to be hit by the bus. It’s a lot of people with disabilities and health problems,” he says.

Hale says the real problem is that the job of providing affordable housing, instead of being taken care of by the government, often falls to inexperienced landlords such as Lewis.

“It’s unfortunate that we rely on private parties to take care of those needs,” he says.

By the time July rolled around, Lewis still hadn’t heard whether she can take her basement back, and she doesn’t expect ever to be paid the $7,000 in rent she believes she’s owed. She wishes she’d known more about the risks of being a landlord before she signed up.

“I had no idea that people could do this,” she says.

Josh Dehaas is a freelance journalist whose work has appeared in Maclean’s and the National Post, among others.

Correction: An earlier version of this article misstated the typical cost of evicting a tenant who stops paying rent. TVO.org regrets the error.

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