: Why letter writing is essential
for successful rental agreements
“The system that the provincial governments have developed is a deplorable nightmare for both landlords and tenants,” says the local paralegal
OrilliaMatters welcomes letters to the editor at [email protected] Please provide your daytime telephone number and address (for verification of authorship, not for publication). The following letter is from Mathew Lund, a local paralegal who has been involved in numerous landlord/tenant cases.
I have been working in landlord-tenant matters for almost eight years now and from someone who has experience working in residential tenancy matters I can say with certainty that I believe the Landlord and Tenant Board (LTB) is the worst performing department every government is agency in canada.
I don’t say this lightly and I don’t say this to be overly critical. It’s not LTB’s fault, as the system that provincial governments have devised is a deplorable nightmare for both landlords and tenants. When you pit one person’s home against another person’s income, you create a naturally antagonistic system, pitting landlords and tenants against each other in a brutal all-out war.
When I first started working on LTB matters, I was told by a mentor that there are generally only two ways for landlords to guarantee profits as a landlord year after year. One is being a slumlord where you don’t care about the law or human rights and you basically steal and rip everyone off. The second is to be either a high-volume or high-end landlord where you either have a rent so high that only those of you who can really afford it rent, or you have multiple units, that ensure constant streams of income.
However, far too many people have investment properties that are rented out for passive income. And while most enter into this agreement with the best of intentions, to create a better cushion for future prosperity, far too often tenants fall behind on their rents and can never catch up. And yes, some toxic renters do this on purpose, although this is the exception rather than the rule. But with rents soaring, the cost of living soaring, and wages stagnant, this is happening more often than ever. Prior to the global pandemic of 2020, LTB was already about three to six months behind schedule when it evicted non-paying tenants. Then the government closed the LTB for eight months and the number of tenants not paying rent exploded.
When the LTB reopened, several judges unsuitable for the position were hired to resolve the backlog. Some landlords have not collected rent for up to 18 months. For those landlords who just wanted an investment property, they began defaulting on their mortgages with no rent coming in, creating even more problems for both landlords and renters.
On the other side of the coin, during the same pandemic, several Greater Toronto Area (GTA) residents sold their homes in the GTA as people no longer needed to come into the office. With the higher valuation of GTA homes, they were able to come to our area and buy significantly cheaper but larger homes at above average retail prices, which drove up the cost of homes. They would then use the leftover money to buy an investment property with a flexible mortgage. They would draw in tenants at the market value of the rent, which was already exorbitant in 2020-21.
After the Bank of Canada adjusted its interest rates, these flexible mortgages became unaffordable. So, for example, you started paying $1,200 on your mortgage, so you moved your tenant in to pay $1,500 a month. Now interest rates are going up and you’re paying $2,000 a month and now this investment property is losing money. Now landlords are in a quandary because they cannot raise the rent above the current target rent of 2.2 percent per year.
That may sound like little, but I personally currently represent dozens of issues involving these circumstances.
When landlords can’t afford to pay their mortgage and the real estate market is so dry that they can’t get out of the investment, landlords will do anything to evict tenants, including false stories about family members moving, creating false renovation plans to evict or make up exaggerated excuses in relation to behavior towards tenants in order to portray tenants in a far worse light than they actually exist.
And the reality is that neither the landlord nor the tenant are really 100 percent wrong. It’s a failed system that creates a contradictory arrangement. If people were struggling to pay rent three years ago, how could they be paying double or in some cases triple the rent today? Without better access to affordable housing, tent cities will become the norm.
My advice to landlords is not to invest in a property unless you are willing to pay 100 percent of the cost of the unit yourself and only consider the possibility of renting as a bonus. My advice to renters, and this is key and very important, if a landlord serves you the eviction notice, it doesn’t mean you have to be absent on the date given. You are not required to vacate your home unless you have an order from the Landlord and Tenant Board.
No one should ever have to be homeless in this country. All it takes is the political will to do the right thing and not just what makes political sense.
Matthew Lund
Municipality of Ramara
Source: www.orilliamatters.com
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