July 5^th, 2018

The Honourable Steve Clark
Minister of Municipal Affairs and Housing
777 Bay St., 17^th Floor
Toronto, ON
M5G 2C8

Dear Minister:

I am writing you as a small landlord in Ontario, looking to you for assistance in navigating Ontario’s difficult and complicated residential tenancy laws.  The playing field became even more unbalanced following the previous government’s passing of the inaptly named Rental Fairness Act in 2017.  Small landlords are hurting, and many are leaving the industry.  The need for inexpensive low-rent basement apartments has never been more pressing, yet small landlords are being forced out of the business.

The agency overseeing rental housing in Ontario, the Landlord and Tenant Board (‘LTB’), is broken.  The heavy load at the provincial Board combined with the automatic right of appeal of a Board decision to the courts routinely delays justice.  The inconsistency of decisions by adjudicators at the Landlord and Tenant Board is shocking.  The appellate body, the Divisional Court, almost always fixes the problem with common sense decisions but that’s a slow and VERY expensive process that most landlords can’t afford. 

Glaring drafting errors and oversights have not been fixed through statutory amendment.  More than once the Divisional Court has suggested that the Tribunal and the government get its act together and fix the problems.

Over the last two decades the appellate courts have made a number of decisions modifying the generally accepted interpretation of the law.  For instance, a recent appellate decision Stamm Investments Limited v. Robert Hobbs, [2016] Ontario Divisional Court, has affirmed that lease-breaking parties or non-payment behaviour legally and effectively eliminate the tenant’s obligation to pay future rent based on unsatisfied lease term.  This negates the purpose of lease term as a benefit to the landlord.  

A decision in 2007 from the Ontario Court of Appeal, Price v. Turnbull’s Grove Inc., 2007 ONCA 408 (CanLII) struck down a section of the RTA that deemed unlawful rent to be lawful if a year had passed and the tenant had not disputed the lawfulness of the rent.  This was a result of inadvertent drafting.  This decision has thrown rent disputes into disarray.  Evictions for non-payment can’t happen unless the lawful rent can be determined.  Successive governments have had over 11 years to fix the problem and to this point have ignored it despite the occasional updating of the Act.

Serious confusion now exists between the jurisdiction of the Landlord and Tenant Board and the Ontario Small Claims Court with regards to utilities as well as for damage or rent owed after a tenant has moved out.  The issue of a landlord’s claims for damages that are legal in nature, not physical damage where something could be repaired or replaced, is also a grey area in terms of the LTB’s jurisdiction.  

Now this April, this government has further shifted the balance, discouraging small landlords and driving them out of the business of creating housing, much of it affordable through basement second suites.  The Ontario government and non-profit agencies practically beg landlords to rent out units despite the terrible risk landlords take and the unattractive rental environment the government has created.  The 2011 Strong Communities Through Affordable Housing Act, and the recently passed Promoting Affordable Housing Act, 2016which promote inclusionary zoning are honest efforts to create more accessory suites and affordable housing. But it won’t work and landlords won’t open up their homes until some of the risk is mitigated, the playing field leveled and the confusion eliminated.

The LTB’s Rules of Practice need amendment related to serving notices of entry.  Email is not allowed.  Fax is permitted.  Currently, a landlord with a home in Burlington and a rental in Oshawa wanting to change a furnace filter on the weekend, would have to drive from Burlington to Oshawa on Thursday or Friday to serve a notice of entry, return home, and then make the trip again on the weekend to change the furnace filter.  In a day and age when most faxing is done via e-fax software, it is ludicrous that the RTA Rules permit service of notices of entry to tenants by fax and not by email.  Residential tenants generally do not have fax machines, and they virtually all have email.

I am asking that you consider these common-sense changes to the Residential Tenancies Actthat would assist landlords, restore some balance and create efficiencies:

1.    Regarding rent control, reconsider the proposed elimination of the s.6 guideline exemption, and bring back in the form of a 5-year rolling exemption for new construction.  Also, the 2.5% rent guideline cap introduced in 2013 should be eliminated.  If inflation is high, landlords should be able to recover their higher costs.

2.     Streamline the LTB process to have matters resolved more quickly, ensuring that rent is paid into the Board by the tenant if disputes are protracted.  Rent arrears matters should be heard within 3 weeks, and the 14 day “grace period” for voiding of the N4 notice should be reduced to a more reasonable 5 days.

3.    Fix the confusion currently existing between the Small Claims Court and the LTB regarding jurisdiction for utilities and post-occupation claims at Small Claims Court for damage and rent.

4.    Amend the RTA provisions regarding “damage” to make it clear that the LTB is the forum for legal, monetary damages, not just physical damage, arising in the rental complex.  That will go a long way in resolving the LTB vs Small Claims Court confusion.

5.    Allow service of notices of entry (not termination notices) by email if the parties agree in the lease that communication may be by email and if they have provided their respective address in the lease. 

6.    Lease term has become meaningless.  Jurisprudence since the Act came into force has confirmed that lease-breaking parties are legal, negating the purpose of lease term as a benefit to the landlord.  This needs fixing.  A notice to terminate that can be remedied by payment (rent N4’s for instance) should not end the tenancy thereby ending any statutory or common law obligations related to lease term.

7.    Fix the problem caused by Price v. Turnbull’s Grove. Governments never intended sections 136 and 116(4) of the Act to operate in this conflicting manner. 

8.    While theoretically tenants with a non-smoking lease can be evicted for smoking, the legislation should be more specific.  This is especially important with the impending legalization of marijuana.  In addition, Ontario should specifically ban the proposed “4 plant” rule from all rentals.

9.  Fix the Above Guideline rent increase application process so that landlords in condos can be protected if there are spikes in their maintenance fees or are special assessments.  Currently condo owners are shut out of this LTB process as Above Guideline Increases can not recover costs incurred through these types of aggregated expenses. Also, put back extraordinary increases for utilities that were removed in 2017.

10. Roll back the 2017 changes to the RTA that require landlords to pay tenants a month’s rent to get their property back for their own use.

In summary, I am asking that the government consider fixing, clarifying and modernizing the Act to make it more balanced, and encouraging more potential small landlord investors to become part of the housing solution.

Yours very truly,

cc:              Premier Doug Ford
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