It’s no secret Ontario’s rental market is a mess from start to finish. From ambiguous rules and enforcement by the LTB, lengthy trial decisions, and legislations that allow for tenants to continue to reside in a home regardless if they are making the rent payments. Ontario has successfully created a game of “who can you trust” with both landlords and tenants alike. A landlord/tenant relationship is one based off of co-dependancy: tenant needs a home- pays rent, landlords needs rent money to pay the mortgage/make income- needs tenant. So what happens when distrust is the main focus of a co-dependant relationship? One party sacrifices more to show they can be trusted while feeling depleted in the process. How are they depeleted? There is a very popular trend happening in both private and MLS rentals- paying rent in advance. Not just 1 month, 3 months- but many times if you are not offering up to 1 YEAR upfront in advance rent- you are out of the running.
Its two sides of a coin – landlords are increasingly worried a tenant will reside in the home and stop paying rent, if that happens Ontario has no course of action to ensure the tenants are removed from the home. Landlords are left owed thousands and thousands of dollars in rent never to be seen while their home sits occupied. You remember when someone did something they shouldn’t have done in school and the punishment was completely ceasing the activity all together- “you ruined it for the whole class now”. That’s what it looks like in this market- some tenants have taken advantage of the leniency Ontario’s market gives them and have scared landlords into thinking without a year upfront- they may stop paying rent as soon as they take possession. Monthly rent payments are becoming a thing of the past- alarmingly quickly. While its understandable to think the tenants will have to pay the rent anyway so may as well “get it over with” in advance- it’s also naive. You leave individuals who need the financial flexibility of a lease arrangement panicking that they may not be able to afford utilities or food. As a Realtor it’s our job to convey information to our clients but it is also our job to warn them of potential issues that could arise in ANY contractual situation. This method of “security by advanced payment” is not legal by any means but it is a trend that follows the “herd mentality” problem humans have by nature. Once a successful wave is witnessed, more and more join in- and sooner or later that wave becomes a tsunami. As professionals- we can only protect our clients until the agreement is signed. It leaves the potential of many open ended legal problems- what happens if the roof is leaking and a landlord doesn’t repair it for months while having the year paid upfront. Tenants are left with no other position but to stay as they have paid upwards of $30,000 already to be there.
What is the solution to a psychological impedance in what should be a practical transactional relationship? A basis for clearer regulations in Ontario and ACTUAL enforcement of those regulations. Hire a task force for the LTB – figure out laws that can be put into place that both are fair to tenants and landlords alike. 3 months non payment of rent with no arrangements results in a immediate eviction. This brings solutions automatically- the issue of trust would be gone because landlords are secure in knowing they would be able to remove non paying tenants within a set amount of time, and tenants would have the security of knowing they are back on a monthly schedule without draining their bank account. Ontario needs to take the necessary steps to start building the trust back up as it was their lack of action that broke it to begin with. Here is a link to a relevant article written most recently.
https://nationalpost.com/news/toronto/toronto-rent-advance-payments
