Ontario compared to other provinces...

[EdRenkema]

QUOTE (Aneta @ Sep 8 2009, 11:31 AM)
I am an Ontario resident and have chosen to invest in rentals exclusively in Alberta due to the more business friendly environment. Having toured a number of towns in Alberta, I have to say there is a significant difference in the amount of construction of multiplexes/rental units between the two provinces. Don't see much of this construction in the GTA, it was an unusual sight for me to see that in Alberta. So much for rent control trying to 'help the people', instead it has the opposite effect, stifling the construction of decent rental housing. Free market is the best way to go! Just my 2 cents!




Aneta I'd love to hear more about your investing strategies. I agree Alberta seems much more business friendly, I think however it is important to try and distinguish between the 'GTA' and the 'rest of Ontario'.

 

[JoefromTO]

I`m amazed at the response with my post. Thanks for everyone who has posted a reply.

In response to a couple of the reponses...I COULD invest in another province...I simply chose not too. When I first started, I didn`t realize how "unfair" the laws are to LL`s. Iv`e come to realize this over time.

The easiest way for this to be fair is to make tenants take responsibility for their actions...whatever that might be. How do you do that? Money....make them have something to lose. It really is that simple. Allow LL`d to charge security deposits and much of the "headaches" would disappear. I am generalizing here, but you know that would work to a great extent.

This leads to a question...when other investors suggest investing in other provinces like Alberta...does Alberta allow LL`s to charge security deposits?

In the end, I do have a choice. One thing I`m considering is going commercial. Now I know that by saying that I will have alot of people comment on the negative aspect of commercial...saying how residential is better for this reason and that reason... I agree that residential is good for some of its own reasons, but its the difference in the 2 that one has to understand and then "decide" which one is better...in THIS province.

I have a few friends who have changed what they own over the years from residential to commercial.

So yes, I am frustrated...many people are, but if the time comes where I decide to make the change, I still need to live within the rules of the RTA...

 

[ontariolandlord]

QUOTE (JoefromTO @ Sep 9 2009, 10:00 AM)
I'm amazed at the response with my post. Thanks for everyone who has posted a reply.



In response to a couple of the reponses...I COULD invest in another province...I simply chose not too. When I first started, I didn't realize how "unfair" the laws are to LL's. Iv'e come to realize this over time.



The easiest way for this to be fair is to make tenants take responsibility for their actions...whatever that might be. How do you do that? Money....make them have something to lose. It really is that simple. Allow LL'd to charge security deposits and much of the "headaches" would disappear. I am generalizing here, but you know that would work to a great extent.



This leads to a question...when other investors suggest investing in other provinces like Alberta...does Alberta allow LL's to charge security deposits?



In the end, I do have a choice. One thing I'm considering is going commercial. Now I know that by saying that I will have alot of people comment on the negative aspect of commercial...saying how residential is better for this reason and that reason... I agree that residential is good for some of its own reasons, but its the difference in the 2 that one has to understand and then "decide" which one is better...in THIS province.



I have a few friends who have changed what they own over the years from residential to commercial.



So yes, I am frustrated...many people are, but if the time comes where I decide to make the change, I still need to live within the rules of the RTA...


The problems with the RTA are old news.



The story of 2009 (which will be felt in 2010) is the increasing ferocity of Legal Aid Clinics (which are private clinics, but funded by tax-payers, and with no accountability) targetting private residential landlords as part of the 'fight poverty' campaign. A great way to justify demands for more funding from the Ontario government.



I don't mean to sound alarmist, but it IS happening more and more. Those on the legal side of the landlord/tenant business have some shocking stories that rarely get media play.



Here's how it works. You evict a pro tenant in Ontario. They go to a Legal Aid private clinic and find a lawyer. The lawyer then represents them (for free, as they charge the government...easy money) at a Landlord and Tenant Board Hearing. If you, the private LL are not very well versed in the rules and dirty tricks of the RTA or do not hire a bright representative, you will likely lose. It doesn't matter, because the new game in town is to make counter-claims against the LL at the Hearing and get it removed from the Landlord and Tenant Board to Ontario Superior Court!



This is where things get bad. The private LL has to 'settle' with the tenants they just wanted to evict or get damages from. Or, you hire your own lawyer to fight the government paid lawyer who will simply drag it on (charging the government) until you drop.



Here's some information on but one of these types of cases going on with Legal Aid lawyer named Lucas Lung who calls himself 'fighter for social justice':



August 24, 2009



Mr. Bob Ward

President & CEO, Legal Aid Ontario

Atrium on Bay

40 Dundas Street West, Suite 200

Toronto, ON

M5G 2H8



Dear Mr. Ward:



Re: Misuse of Clinic Funds
br />W v. , Ontario Superior Court of Justice File No XXXXXXXXX



We represent Ontario landlords XXXX and XXXXX XXXXXX, the defendants in the above-noted matter.



Our clients have been down a long and winding road at the hands of their former tenants, XXXXX and XXXXXXX XXXX. Until recently, this matter was before the appropriate venue, the Landlord and Tenant Board.



Fact: these tenants have victimized at least eight Ontario landlords. Each case mirrors the one before. They have been evicted numerous times. To date, they have not paid any of the judgments obtained against them and in fact, their `MO` remains the same and their list of victims keeps growing. Not only do they fail to pay outstanding judgments for arrears of rent, they damage homes to a severe extent, leave `truckloads` of refuse behind, and in two particular cases, willfully caused further damage on their way out the door as they vacated these homes.



The Community Legal Clinic via Mr. Lucas Lung, counsel, took on this matter a good number of months ago, and is representing the tenants in the superior court action. Despite numerous opportunities to resolve the issues before the Board, the tenants, assisted by duty counsel, have chosen to victimize our clients further by taking this matter to a higher court.



Our representatives are paralegals and therefore, we are not permitted to represent our clients before the Superior Court. Our clients have suffered enormous financial and emotional hardship at the hands of these tenants. We have represented them pro bono since March of 2009. Therefore, we have no financial interest in retaining carriage of this matter.



The issues are complex. The history is heartbreaking. The facts will exonerate our clients. What we all know, however, is that while the tenants are enjoying free representation thanks to Legal Aid Ontario, my clients are in essence being forced to dig into their own pocket to defend this most frivolous and vexatious action.



Unless the Community Legal Clinic in Orillia is mandated to represent every tenant that walks in their door, regardless of the facts, we believe that there has been a serious misappropriation of clinic funding. We are preparing to go public with our clients` story. Legal Aid Ontario should not in our opinion be assisting these clients. They should be responsible to retain and pay for their own counsel, just as the landlords are.



We are confident that the taxpayers of Ontario would be incensed, just as we are, to see their tax dollars appropriated in this manner.



Your prompt reply would be appreciated. All relevant documentation in support of our clients is accessible through this office, and we have been authorized to share it with you.



Regards,



XXXXX XXXXXX

 

[JoefromTO]

QUOTE (ontariolandlord @ Sep 9 2009, 12:34 PM)
The problems with the RTA are old news.



The story of 2009 (which will be felt in 2010) is the increasing ferocity of Legal Aid Clinics (which are private clinics, but funded by tax-payers, and with no accountability) targetting private residential landlords as part of the 'fight poverty' campaign. A great way to justify demands for more funding from the Ontario government.



I don't mean to sound alarmist, but it IS happening more and more. Those on the legal side of the landlord/tenant business have some shocking stories that rarely get media play.



Here's how it works. You evict a pro tenant in Ontario. They go to a Legal Aid private clinic and find a lawyer. The lawyer then represents them (for free, as they charge the government...easy money) at a Landlord and Tenant Board Hearing. If you, the private LL are not very well versed in the rules and dirty tricks of the RTA or do not hire a bright representative, you will likely lose. It doesn't matter, because the new game in town is to make counter-claims against the LL at the Hearing and get it removed from the Landlord and Tenant Board to Ontario Superior Court!



This is where things get bad. The private LL has to 'settle' with the tenants they just wanted to evict or get damages from. Or, you hire your own lawyer to fight the government paid lawyer who will simply drag it on (charging the government) until you drop.



Here's some information on but one of these types of cases going on with Legal Aid lawyer named Lucas Lung who calls himself 'fighter for social justice':



August 24, 2009



Mr. Bob Ward

President & CEO, Legal Aid Ontario

Atrium on Bay

40 Dundas Street West, Suite 200

Toronto, ON

M5G 2H8



Dear Mr. Ward:



Re: Misuse of Clinic Funds

W v. , Ontario Superior Court of Justice File No XXXXXXXXX



We represent Ontario landlords XXXX and XXXXX XXXXXX, the defendants in the above-noted matter.



Our clients have been down a long and winding road at the hands of their former tenants, XXXXX and XXXXXXX XXXX. Until recently, this matter was before the appropriate venue, the Landlord and Tenant Board.



Fact: these tenants have victimized at least eight Ontario landlords. Each case mirrors the one before. They have been evicted numerous times. To date, they have not paid any of the judgments obtained against them and in fact, their "MO" remains the same and their list of victims keeps growing. Not only do they fail to pay outstanding judgments for arrears of rent, they damage homes to a severe extent, leave "truckloads" of refuse behind, and in two particular cases, willfully caused further damage on their way out the door as they vacated these homes.



The Community Legal Clinic via Mr. Lucas Lung, counsel, took on this matter a good number of months ago, and is representing the tenants in the superior court action. Despite numerous opportunities to resolve the issues before the Board, the tenants, assisted by duty counsel, have chosen to victimize our clients further by taking this matter to a higher court.



Our representatives are paralegals and therefore, we are not permitted to represent our clients before the Superior Court. Our clients have suffered enormous financial and emotional hardship at the hands of these tenants. We have represented them pro bono since March of 2009. Therefore, we have no financial interest in retaining carriage of this matter.



The issues are complex. The history is heartbreaking. The facts will exonerate our clients. What we all know, however, is that while the tenants are enjoying free representation thanks to Legal Aid Ontario, my clients are in essence being forced to dig into their own pocket to defend this most frivolous and vexatious action.



Unless the Community Legal Clinic in Orillia is mandated to represent every tenant that walks in their door, regardless of the facts, we believe that there has been a serious misappropriation of clinic funding. We are preparing to go public with our clients' story. Legal Aid Ontario should not in our opinion be assisting these clients. They should be responsible to retain and pay for their own counsel, just as the landlords are.



We are confident that the taxpayers of Ontario would be incensed, just as we are, to see their tax dollars appropriated in this manner.



Your prompt reply would be appreciated. All relevant documentation in support of our clients is accessible through this office, and we have been authorized to share it with you.



Regards,



XXXXX XXXXXX






OMG! that makes me sick... Well, as I said, I might be changing my views about residential real estate. Now, I'll be honest, I have NOT had any serious problems like this. Infact, I rarely hear about people who do. The problem is the fact that it CAN happen and if it does, it would destroy what took me years to build.

 

[koop]

Is there any reason that that has to happen to any landlord? Isn`t it all about doing your diligence on the tenants? Having a system that doesn`t draw these kind of tenants?

 

[BrianPersaud]

QUOTE (koop @ Sep 9 2009, 03:19 PM) Is there any reason that that has to happen to any landlord? Isn`t it all about doing your diligence on the tenants? Having a system that doesn`t draw these kind of tenants?


Guys this is getting a bit out of control. There are two things we can do that could be productive.

Start a movement to get the "regs" ammended and understand that this is the "sandbox" we are in and play the game to win. Get good tenants, screen and screen and screen. The people that keep getting these tenants are not professional property investors.

Anyone up to start a petition that we can spread to all REIN members? Write a letter, I`ll help promote for sigs.

 

[JoefromTO]

QUOTE (BrianPersaud @ Sep 9 2009, 03:21 PM) Guys this is getting a bit out of control. There are two things we can do that could be productive.

Start a movement to get the "regs" ammended and understand that this is the "sandbox" we are in and play the game to win. Get good tenants, screen and screen and screen. The people that keep getting these tenants are not professional property investors.

Anyone up to start a petition that we can spread to all REIN members? Write a letter, I`ll help promote for sigs.


Sorry Brian, what are you refering too? It sounds productive though...so I`m in

 

[housingrental]

Brian - I appreciate your enthusiasim but take issue with "The people that keep getting these tenants are not professional property investors." This is not true. Big and small investors and property managers will deal with this eventually - the best screening in the world minimizes the chances of, but doesn`t prevent, things from going wrong eventually. Don`t blame the victims

QUOTE (BrianPersaud @ Sep 9 2009, 04:21 PM) Guys this is getting a bit out of control. There are two things we can do that could be productive.

Start a movement to get the "regs" ammended and understand that this is the "sandbox" we are in and play the game to win. Get good tenants, screen and screen and screen. The people that keep getting these tenants are not professional property investors.

Anyone up to start a petition that we can spread to all REIN members? Write a letter, I`ll help promote for sigs.

 

[ontariolandlord]

QUOTE (housingrental @ Sep 9 2009, 05:32 PM)
This is not true. Big and small investors and property managers will deal with this eventually - the best screening in the world minimizes the chances of, but doesn't prevent, things from going wrong eventually. Don't blame the victims

Exactly. And good tenants can become bad tenants very easily once they learn how easy it is to manipulate the system. It happens all the time...because it's so easy and there are so many 'voices' trying to reach them to get them to fight landlords, so these 'voices' get involved and justify their funding from the McGuinty government which is always looking for excuses to fund them.



REIN is a fine organization, but it is hardly a place for an aggressive campaign for change. In fact, tenants groups have informed me that they like organizations like REIN. Why? Because it brings in new investment dollars to the rental industry in Ontario. More pie to steal.



I'm not here to only promote the Ontario Landlord site, but it already has the rapt attention of the tenant groups. There's a reason.



For some entertainment, take a look at this:



Toronto Tenants Unite! (paid for by taxpayers!)



http://members2.boardhost.com/TorontoTenants/



Especially go to pages a few months older and back. Try to find the one promoting lying to your potential landlord about having pets. Advice from the taxpayers wallet!

 

[BrianPersaud]

QUOTE (housingrental @ Sep 9 2009, 07:32 PM)
Brian - I appreciate your enthusiasim but take issue with "The people that keep getting these tenants are not professional property investors." This is not true. Big and small investors and property managers will deal with this eventually - the best screening in the world minimizes the chances of, but doesn't prevent, things from going wrong eventually. Don't blame the victims

Hi Adam,



While it does happen to sophisticated investors we do have some checks and balances in place to minimize, from my perspective the thread was coming across as why would anyone invest in Ontario...I like hearing the war stories but I don't like hearing this sucks that sucks and not doing anything about it

 

[ontariolandlord]

QUOTE (BrianPersaud @ Sep 9 2009, 07:57 PM) Hi Adam,

While it does happen to sophisticated investors we do have some checks and balances in place to minimize, from my perspective the thread was coming across as why would anyone invest in Ontario...I like hearing the war stories but I don`t like hearing this sucks that sucks and not doing anything about it
What do you think a petition from REIN will do? The `other side` is ideological and deeply entrenched and very well funded by our tax dollars. It was leaked that tenants groups even have people hired only to `monitor` landlord sites all day.

The way to get change is to get the reality out there. If informing people what`s going on and what the laws really are is `doing nothing` to you, then I respectfully disagree. The real estate industry constantly promotes investment in rentals. The Toronto and Ontario governments promote putting basement units in your house.

Some ways to get change are:

1. When people know the truth of the Ontario system, investment will dry up forcing the government to act.

2. Influence the P.C.`s, and do everything possible to get Hudak in with a majority.

Landlording in Ontario is like Russian Roulette. It may take a while but eventually something bad will happen, especially as you grow bigger.

Why are damage deposits are "illegal" in Ontario but not in many other provinces? Why free legal aid for all tenants? It goes on and on. The latest Act was essentially written by the "Tenant Defense Fund" which gets government money, without open bidding, and is not overseen or ever audited.

I wrote in another post that I own a lot of property in Ontario. I have a lot of equity here. I now see that a lot of it was built thanks to the policies of Mike Harris and relatively fair regulatory climate in the late 90`s early 00`s. Things have changed.

 

[BrianPersaud]

QUOTE (ontariolandlord @ Sep 9 2009, 10:10 PM) What do you think a petition from REIN will do? The `other side` is ideological and deeply entrenched and very well funded by our tax dollars. It was leaked that tenants groups even have people hired only to `monitor` landlord sites all day.

The way to get change is to get the reality out there. If informing people what`s going on and what the laws really are is `doing nothing` to you, then I respectfully disagree. The real estate industry constantly promotes investment in rentals. The Toronto and Ontario governments promote putting basement units in your house.

Some ways to get change are:

1. When people know the truth of the Ontario system, investment will dry up forcing the government to act.

2. Influence the P.C.`s, and do everything possible to get Hudak in with a majority.

Landlording in Ontario is like Russian Roulette. It may take a while but eventually something bad will happen, especially as you grow bigger.

Why are damage deposits are "illegal" in Ontario but not in many other provinces? Why free legal aid for all tenants? It goes on and on. The latest Act was essentially written by the "Tenant Defense Fund" which gets government money, without open bidding, and is not overseen or ever audited.

I wrote in another post that I own a lot of property in Ontario. I have a lot of equity here. I now see that a lot of it was built thanks to the policies of Mike Harris and relatively fair regulatory climate in the late 90`s early 00`s. Things have changed.

I`m in!

 

[JoefromTO]

Like I said previously...most of the "problems" with tenants would be mitigated if they have something to lose too.

I don`t know what amount a security deposit would need to be, but it`s my opinion that it would have to be equal to 2 months rent. So lets say the apartment in question rents for $1000.00/month. The tenants provides 1k for last months rent, 1k for first months rent, and an additional 2k as a security deposit.

If the tenants became the potential nightmare they could become, and draged out the legal process of eviction(fill in your example here), and when they finally moved out they trashed the place causing 10k damage. So the total cost for everything including lost rent and legal fees, etc...is approximately 15k(just an example here), I would still have 2k...thats their 2k...so at the very least, I have the satisfaction knowing that they lost something ALSO.

The 2k is a far cry from the total cost...but at least I`ll feel better knowing they lost some skin too.

But the true reason for the 2k, is to help ensure that you never have that type of problem to begin with! I`d like to call it insurance.

So who gives the Gov` the right to dictate how this business should be run? If it were left to be self governing, the "people" would have to negotiate what is fair. And its for THIS reason why commercial seems alot better...it too has its own risks associated...I`m not that naive...but I`m focusing on this sole issue right now...nothing else.

 

[housingrental]

Fair enough

Get REIN organization to promote doing something about it has my support

QUOTE (BrianPersaud @ Sep 9 2009, 09:57 PM) Hi Adam,

While it does happen to sophisticated investors we do have some checks and balances in place to minimize, from my perspective the thread was coming across as why would anyone invest in Ontario...I like hearing the war stories but I don`t like hearing this sucks that sucks and not doing anything about it

 

[ontariolandlord]

QUOTE (housingrental @ Sep 10 2009, 10:53 AM) Fair enough

Get REIN organization to promote doing something about it has my support
It`s nice to see that people are finally getting to the point of demanding changes, especially those who are in the trenches.

2 months security deposit is common in many other countries. In Ontario, you simply won`t get it.

Actually, any security deposit will be fought tooth and nail.

There may be some flexibility for smaller units. Otherwise, good landlords will get swept up in the hysteria over large corporate `slumlords` during the next elections.

I don`t think people realize how entrenched the tenant groups are in Ontario.

The fight is political, not economic. Of course fairer laws would lead to more investment, better units, more jobs for contractors, etc. They don`t care. It`s about noise and votes and jobs for those helping (or claiming to help) get those votes.

A REIN challenge would of course be welcome, but would be easy to spin as "It`s a private company wanting to make profits on the backs of the poor!"

The problem is political, and most of us in the industry on our side are simply too busy or don`t like politics.

In other provinces and countries, the mid-size business class is loud and proud and plays the game. In Ontario, we don`t see it happen often.

 

[JoefromTO]

QUOTE (ontariolandlord @ Sep 10 2009, 04:25 PM) It`s nice to see that people are finally getting to the point of demanding changes, especially those who are in the trenches.

2 months security deposit is common in many other countries. In Ontario, you simply won`t get it.

Actually, any security deposit will be fought tooth and nail.

There may be some flexibility for smaller units. Otherwise, good landlords will get swept up in the hysteria over large corporate `slumlords` during the next elections.

I don`t think people realize how entrenched the tenant groups are in Ontario.

The fight is political, not economic. Of course fairer laws would lead to more investment, better units, more jobs for contractors, etc. They don`t care. It`s about noise and votes and jobs for those helping (or claiming to help) get those votes.

A REIN challenge would of course be welcome, but would be easy to spin as "It`s a private company wanting to make profits on the backs of the poor!"

The problem is political, and most of us in the industry on our side are simply too busy or don`t like politics.

In other provinces and countries, the mid-size business class is loud and proud and plays the game. In Ontario, we don`t see it happen often.



What are the odds that things will change for the better in the future? What would it take?

 

[invst4profit]

In order for things to change in the foreseeable future three things will have to happen.

Tenant activists will have to realise what they are doing is not a job.
Government officials would have to qualify for real jobs.
Politicians would have to realise they actually have a job.

Three things which are unlikely to ever happen.

 

[JohnS]

I was just wondering....do any provinces in Canada allow both first and last, and damage deposits? I didn`t think any did, but I could easily be wrong here.

I would prefer being able to get a damage deposit, but I doubt Ontario would ever allow 2 months equivalent for a damage deposit. However, they might swing allowing 1-month`s damage deposit instead of last month`s rent.

Just curious about it...

Have a good one!

JohnS

 

[JoefromTO]

QUOTE (JohnS @ Sep 10 2009, 11:41 PM) I was just wondering....do any provinces in Canada allow both first and last, and damage deposits? I didn`t think any did, but I could easily be wrong here.

I would prefer being able to get a damage deposit, but I doubt Ontario would ever allow 2 months equivalent for a damage deposit. However, they might swing allowing 1-month`s damage deposit instead of last month`s rent.

Just curious about it...

Have a good one!

JohnS


If that were the case, then technically its the same thing. Besides, I wouldn`t want to lose the last months rent because tenants rarely ever give 2 months notice...they give 1 month and week at best and I know I can enforce this and that, but once the tenant has decided to move, the less you piss them off the better.

A damage depost has to be big enough to make them want it back. Just think of the motivation people have at grocery stores who require a quarter to get a shoping cart, and get the quarter back when they return it. Whenever I go to one of those grocery stores( very few do this) the parking lot has very few stray carts lying around. People will do what they should do, just for a quarter! This how motivated they would be if they stand to get hundreds if not thousands of dollars back...very effective if you ask me.

Honestly, they can keep the RTA the way that it is, most people don`t even know much about it anyway, just allow LL`s to charge security deposits.

Oh I just had a brain storm, if LL`s could charge security deposits, wouldnt that lessen the need for the Tribunal..also known as the board? And isnt the Board government funded? Wow...amazing how things work. It`s been a few years since Iv`e changed my views of which governemnt party I vote for...

 

[JimWhitelaw]

Well, the situation in Ontario is what it is. Seems to me that investors have 3 choices:

1) Live with the rules as they are and learn how to best operate in that sandbox. Yes, the legislation is tipped in the tenant`s favour, but taking action to invest even with that additional risk is still better than doing nothing.

2) Agitate for change. Seems like a lot of energy expended fighting government and entrenched advocacy groups in a battle that seems unlikely to be won - energy that could be better put toward actually running a real estate business. But I respect and support those who choose this route and refuse to "lie down and take it".

3) Partner with others to invest in a friendlier investor environment like Alberta, which as most of us know is appealing for more than just the reasonable tenant legislation but also for the economic fundamentals that we all value. Partnering is an easier route than managing your own cross-country investments remotely.

We`re actively looking for JV partners for new investments in Edmonton. Contact me if you`re interested. I`ll also be attending the Toronto ALIFE in Oct, and I`d love to meet with some Ontario investors who are ready to talk about how we could collaborate on investments in Alberta.