Ontario compared to other provinces...

[BrianPersaud]

QUOTE (JimWhitelaw @ Sep 11 2009, 01:22 PM) 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.


Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.

Margaret Mead US anthropologist & popularizer of anthropology (1901 - 1978)

 

[JohnS]

QUOTE (JoefromTO @ Sep 11 2009, 10:03 AM) If that were the case, then technically its the same thing......
A damage depost has to be big enough to make them want it back......This how motivated they would be if they stand to get hundreds if not thousands of dollars back...very effective if you ask me.


See, I`d say that it is different. A damage deposit can only be used towards damages, and can`t be used towards last month`s rent. So, when the 1st of their last month rolls around, they would still legally have to pay you. And then, at the end of their tenancy, you`d still have some of their money if it was needed.

And yes, a larger deposit would motivate them more - but you also have to take into account what could reasonably be passed and become law. One month`s equivalent is greater than in some other provinces, and from a tenant`s point of view, as the amount would be the same, it could be passed more easily than 2, or 5 months` equivalent.

Have a good one!

JohnS

 

[JoefromTO]

QUOTE (JohnS @ Sep 11 2009, 02:29 PM) See, I`d say that it is different. A damage deposit can only be used towards damages, and can`t be used towards last month`s rent. So, when the 1st of their last month rolls around, they would still legally have to pay you. And then, at the end of their tenancy, you`d still have some of their money if it was needed.

And yes, a larger deposit would motivate them more - but you also have to take into account what could reasonably be passed and become law. One month`s equivalent is greater than in some other provinces, and from a tenant`s point of view, as the amount would be the same, it could be passed more easily than 2, or 5 months` equivalent.

Have a good one!

JohnS


I see your point John. 1 months security deposit would definitely be better than what we have now, but if I had to go for anything, it would be 2 months.

I like the lease to own idea though, it sounds like a good way to get tenants who will care for the place since they will be buying it.

 

[JimWhitelaw]

QUOTE (BrianPersaud @ Sep 11 2009, 12:08 PM) Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.I`d argue that a large group of uninformed lunatics can have approximately the same effect

, but I understand your point and I don`t disagree. What I`m suggesting is that investors should consider if fighting bureaucratic nonsense is an efficient (or enjoyable!) use of their time vs. simply moving on to a more favorable venue for the business of real estate, since such places exist in Canada and it`s not hard to access them.

 

[ontariolandlord]

QUOTE (JimWhitelaw @ Sep 11 2009, 02:23 PM) I`d argue that a large group of uninformed lunatics can have approximately the same effect

, but I understand your point and I don`t disagree. What I`m suggesting is that investors should consider if fighting bureaucratic nonsense is an efficient (or enjoyable!) use of their time vs. simply moving on to a more favorable venue for the business of real estate, since such places exist in Canada and it`s not hard to access them.
It will be a fight.

However, the chances of winning increase dramatically if you charge one month damage deposit (thus no increases in money paid by tenants) and the LTB will see a chance to hire more bureaucrats to create a `justice system` for returning deposits (another make-work program!)

And a little birdy told me that if you make this new rule for SFH and duplexes...maybe triplexes... (the majority of middle class landlords in Ontario...and the people both the Fiberals and the P.C.`s are after), with a loud voice, it could get done. But it requires an organized voice.

 

[invst4profit]

There is no way LLs will support a change to the RTA to allow damage deposits on only a small portion of the rental market.
Your suggestion that only SFH and small multi units apply will get resistance from all LL.
Either damage deposits apply on all or none.
If your suggestion were to pass it would do irreparable damage to the small LL market. Tenants would avoid any property that had a damage deposit requirement, like the plague, fearing they would end up losing the deposit every time they moved (which is likely true).

You will not have my support on any proposal that does not apply across the board to all rental properties.

Bad idea!!!!!!!

 

[ontariolandlord]

QUOTE (invst4profit @ Sep 12 2009, 06:07 AM) There is no way LLs will support a change to the RTA to allow damage deposits on only a small portion of the rental market.
Your suggestion that only SFH and small multi units apply will get resistance from all LL.
Either damage deposits apply on all or none.
If your suggestion were to pass it would do irreparable damage to the small LL market. Tenants would avoid any property that had a damage deposit requirement, like the plague, fearing they would end up losing the deposit every time they moved (which is likely true).

You will not have my support on any proposal that does not apply across the board to all rental properties.

Bad idea!!!!!!!
There are already exceptions in the RTA for similar situations. For example, if the LL lives in the unit there are different rules and, even more importantly, different attitudes by ajudicators.

Why? Because so many middle class people (you know, the people who vote) were getting killed by the rules and getting "pi$$ed` off and screaming. The Liberals are very quick to hear these types of screams!

Even the top tenant activists, when chilled out, admit their political battle is against the corporates in Toronto. They have even suggested that small unit landlords lobby for a few exceptions...and we`d get them.

Your all for one, one for all is a day dream.

I`m not calling for the demand for damage desposits for smaller units...only taking away the "illegal" aspect of it.

Good Idea!

 

[ontariolandlord]

Continued...

In fact, I`ve had applicants offer me damage deposits in addition to last months rent. If the unit is attractive enough, in the right area, it`s not a problem.

So why not take it?

Because if they pay any type of security deposit at the beginning, even if they offer it, you can get nailed any time afterwards! It is an "illegal rent" and can open a bunch of doors leading to fines and more. Asking for $150 damage deposit for that $1000 new washer and dryer, those new beautiful curtains and the freezer that are not even in the lease? Criminal! Get ready for a call from the Government Enforcement Unit if your tenant gets angry at you or doesn`t like the fact that you didn`t call and ask them how their life is going.

What if there is no proof?

In Ontario, proof isn`t always needed at Hearings. The system is so political and pro tenant that if a tenant even brings it up (with no proof) simple things get very complicated fast. Sit through some Hearings. Get some popcorn and a coke and spend a morning. You`ll be amazed. Oh, the person who looks to be in charge of the whole show? That`s not the ajudicator...that`s the ft Legal Aid rep prancing around like a rooster over his flock.

On the Landlord site, there`s a story of a tenant who offered a security deposit, just to extort the LL later on. The story has been verified.

By the way, Greg. You don`t have a rental business with 3 or less units anymore, right?

 

[invst4profit]

That`s right I do have more than three but I don`t need damage deposits as I am in a different market. However I still contend that you will hurt the small LL more than help if they are the only ones that take damage deposits. The only tenants they will attract are those rejected by the rest of the rental market.
Post the topic on the Ontario Landlord site and lets see where it goes.

 

[JoefromTO]

QUOTE (invst4profit @ Sep 12 2009, 08:07 AM) There is no way LLs will support a change to the RTA to allow damage deposits on only a small portion of the rental market.
Your suggestion that only SFH and small multi units apply will get resistance from all LL.
Either damage deposits apply on all or none.
If your suggestion were to pass it would do irreparable damage to the small LL market. Tenants would avoid any property that had a damage deposit requirement, like the plague, fearing they would end up losing the deposit every time they moved (which is likely true).

You will not have my support on any proposal that does not apply across the board to all rental properties.

Bad idea!!!!!!!

I agree with that. The rule has to apply across the board to be effective. However, to control this situation, there could be an active body who "holds" the security deposit on behalf of both parties. If the government is willing to spend money to support the tenants, why not hold the tenants security deposit as well. This will ensure that LL`s aren`t lying and need to follow a system to prove a before and after condition, in order to be elligible for some or all of the security deposit. I`m certain the government doesn`t want to have anything to do with the security deposits...then they shouldnt get so involved in providing support for the tenants too.

It is the way it is anyway...my intention is simply to express how pathetic it is that the tenants have so much help to be irresponsible in Ontario.

 

[ontariolandlord]

There`s this guy called Russ Innanen who is a paralegal rep for landlords. He calls himself the "Landlord Helper." We pushed him on why he, as a "40 year man" never pushed for damage deposits. This "landlord helper" finally replied:QUOTE Tuesday, September 08, 2009

DEPOSIT FOR DAMAGES?

You can`t have a damage deposit and you know why? It`s because when landlords in Ontario were allowed damage deposits eons ago, they always kept a good portion of them, if not the whole enchilada.

Some andlords wouldn`t give possession until they had a damage deposit in their greedy hands because they knew that they could dream up all sorts of reasons to show how the tenants had caused damage during their stay.

Guess what was done next? The legislators then slapped all of the landlords upside the head and gave them an LMR, a Last Month`s Rent deposit and made them pay 6% to the tenants every year on the tenancy`s anniversary.

The last time I looked at Quebec L&T legislation it allowed a damage deposit but, in order to claim any portion or all of a damage deposit it had to be brought to court and a judge or a referee of some sort of competent jurisdiction had to decide if the retention of any portion or all of a deposit was justified.

Take heart landlords! You no longer have to pay the 6% interest on your LMRs now since February of 2007. You only pay the same percentage of the Guideline Increase you are allowed each year.

The lower interest will not be of interest to some of you. You never paid the 6% before and won`t pay the reduced percentage even now. Keep on bucking the law Buckey, and the law will change again to the disadvantage of all landlords.

The pendulum swings both ways.
Colour was added to emphasize what this guy is thinking.

He reps landlords for a living!

 

[invst4profit]

He reps landlords for a living!



Not for much longer if he continues to show his true colours.

 

[ontariolandlord]

QUOTE (invst4profit @ Sep 14 2009, 12:10 AM) He reps landlords for a living!



Not for much longer if he continues to show his true colours.
He is a little famous because he`s been in the business for so long. The scary thing is that over the years the government has invited him to talk to give the "the landlord`s side of things."

He was finally prodded to start talking about issues and showed his true colours. He`s radically anti-landlord!

This is why having a terrific investment site such as myREIN is important, and also have a nitty-gritty, in the trenches site like the Ontario landlord one, can work hand in hand.

How many investors wasted time and money with Russ Innanen representing them?

 

[JoefromTO]

Iv`e never heard of him until now.

 

[ontariolandlord]

QUOTE (JoefromTO @ Sep 14 2009, 10:59 AM) Iv`e never heard of him until now.
Many hadn`t.

But many had. As he advertises himself as the "Landlord`s Helper" and has represented landlords to the Ontario government and to various municipalities.

The landlord site finally organized people to ask him some questions and his responses were shocking. To him, we`re all a bunch of conniving thieves thinking of ways to steal a $775 security deposit from day 1 and making plans on how to avoid the massive interest on Last Months Rent (LMR)!

He`s shown himself to be someone that would not be effective counsel for small business landlords.

You can google him and go to his blog and write a comment to him.

He never posts mine.

I just want to know: what the hell is a "Buckey"?

 

[Aneta]

QUOTE (EdRenkema @ Sep 9 2009, 10:54 AM) 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`.


Hi Ed, sure, no problem, we can chat some more, you can find me at an upcoming REIN meeting. I try to make it to the AB REIN conferences as well, you may bump into me there as well. You do have a point, GTA is probably different from the rest of ON....but everyone is still bound by the same legal restrictions.

 

[Aneta]

QUOTE (JoefromTO @ Sep 10 2009, 11:08 AM) 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.

FYI, security deposit in AB is one month`s rent, some landlords ask for less. This security deposit is a beautiful thing, it helps me sleep at night.

Info from AB website: "A landlord can collect a security deposit at the beginning of the tenancy. A security deposit can be money, or an item other than money that is agreed to by the landlord and the tenant. The value of the item should be equal in value to the amount of the security deposit. This agreement should be in writing.



The purpose of a security deposit is:

• To cover the landlord`s costs of repairing or replacing physical damage to premises.
• To cover the costs of cleaning because of extraordinary or abnormal use. This does not include cleaning associated with normal wear and tearTo cover any arrears of rental payments.To cover other costs agreed to by the tenant in the residential tenancy agreement, such as legal fees, utilities, late fees, etc. "

The last two points are very good, I have exercised those rights before, when one of my tenants did a `midnight move`. Also exercised the first two rights, I did not have to waste time chasing down money from tenants that moved out to repair hole in door, everything went smoothly, repaired door, deducted from deposit and was able to show the unit in a repaired state promptly.

Note that you cannot ask for last month`s rent and security deposit, however the upfront amount money is the same as in ON (first & last month`s rent), just allotted differently.

 

[Maverick1972]

Sad as it is to say, I`ve often thought about offering the tenants 100 dollars cash upon a final inspection.

If the unit has been cleaned and is in good shape, they have lived there for at least 12 months, they have provided me with sufficient notice and paid the rent on time. This might at least minimize the damage and it would only cost 100 dollars.