Envelope Real Estate Brokerage Inc
181 Commissioners Road W London, ON N6J 1X9
Phone: 519-435-1600 Email Envelope

Cannabis legalization and renters


By Christopher Seepe

 Cannabis, also known as marijuana, will be legalized in Canada on Oct. 17. This means that it is no longer a crime to possess small amounts of cannabis. However, that doesn’t mean you can use it anywhere you wish. For example, some provinces won’t permit cannabis to be consumed in public places.

 I wrote a two-page letter to my tenants explaining this, and that they can’t smoke it anywhere in or on the property.



 When this law is passed, it will further grant the right to not be arrested for growing up to four plants. Again, it doesn’t mean you have the right to grow it wherever you wish. My letter specifically states you can’t grow it anywhere in or on the property without the landlord’s written permission, which we universally don’t provide because of the significant health risk from the potential growth of mould, risk of fire and the significant damage caused by the high humidity requirements for growing such plants, including hydroponics.

 The right to smoke in a rental property is not enshrined in any Canadian legislation, including the Canadian Charter of Rights and Freedoms and the Human Rights Code. In the 1998 case, McNeil vs. Ontario, a smoker claimed their rights under the Canadian Charter of Rights and Freedoms (s.12) were infringed, that nicotine is addictive and deprivation of cigarettes resulted in physical, mental and psychological suffering. The court determined that a cigarette ban was not intended to be punishment but to improve the health of all citizens and, while withdrawal from an addiction to nicotine may be an unpleasant and difficult experience, it is nevertheless temporary, limited and does not require medical attention. Many people voluntarily overcome the addiction. The above case further cited an earlier case – Edwards v. Canada (1991): “The smoking habit is far from a legal or constitutional right to which the State must pander.”

 Unlike alcohol consumption, for example, cannabis smoke doesn’t respect physical boundaries and it’s much stronger smelling than cigarette smoke.

 Smokers will likely run into the fundamental tenet of the Residential Tenancies Act (RTA) – the right of quiet enjoyment. This phrase is a misnomer. It should state, “right of peaceful enjoyment”. A breach of this right can arise from any acts of or neglect by a tenant that results in the interference, interruption or disturbance of another tenant’s reasonable peace, comfort or privacy of their respective premises or the common areas of the property being interfered with, whether by liquids, gases, vapours, solids, odours, vibration, noise, abusive language, threats of any kind, unusual or dangerous hobbies and fires created, caused or implied by a tenant.

 Two-thirds of all Canadians don’t smoke, while 14 per cent smoke daily. Children can be adversely affected by smoke and parents are likely to take very strong objection to cannabis smokers.

 Ontario’s new Standard Lease Agreement (SLA) includes a section about smoking. This section empowers a landlord to use a breach of a no-smoking clause in a rental agreement as grounds for eviction.

 It remains for the courts to determine if a tenant’s right to smoke marijuana for medicinal purposes is greater than a neighbour’s right to not smell it, especially since there are alternative forms of medicinal marijuana including pills, capsules and oil.

 My letter states that if mould develops in their rental unit, we will not remediate it and we will require a tenant to pay for any such remediation. An N8 notice for eviction could be issued for damage to property caused by an act or inaction by a tenant that is not completely and properly repaired by that tenant.

 We estimated that growing four plants a year will consume an average $600-$800/year, and electrical circuits in older buildings (87 per cent of Ontario purpose-built rental buildings were constructed before 1979) that are already under heavy loads may increase the risk of fire. My letter states that a tenant may be held accountable for any fire started due to an overloaded circuit, and that we regularly record all electricity meter readings for all units. If a landlord includes electricity in the rent, then this could become a major financial issue. Your letter might say the landlord is not be responsible for any increase in electricity cost, although you may find that this will be hard to defend in court for existing tenants.

 Our smoking policy then is: “Smoking, which includes tobacco and marijuana, any electronic versions and anything smoked for medicinal, recreational or remedial purposes, and growing plants of any type or quantity that require a room temperature above 22 C or which requires any form of moisture, excluding room-temperature liquid water directly applied to the plant’s soil, which includes marijuana, cannabis and hydroponics, are not permitted to be grown or cultivated anywhere in or on the premises, including common areas and the tenant’s rented unit.”

Chris Seepe

Chris Seepe is a published writer and author, ‘landlording’ course instructor, president of the Landlords Association of Durham, and a commercial real estate broker of record at Aztech Realty in Toronto, specializing in income-generating and multi-residential investment properties. 

Tenant Lessons, Check their application thoroughly!


 Below is an email from a client who has purchased 10 properties from me over the past few years. He and his wife have done exceptionally well and in his email to me, a few things that he is now doing may help you.:

 

Sent:
Sat, Dec 2, 2017 at 3:39 pm
To:
 
Ty,

We had the Settlement Conference for our small claims case against the Gatewood tenants for damages on Friday. To cut a long story short we settled for $2,400 to be paid in $100 instalments. A conservative view of our claim was we could maybe get $4,000 or more at trial but would have to pay Cohen Highley's paralegal $800. The tenant had hired a pretty aggressive paralegal and we represented ourselves throughout. So at $4,000 - $800 = $3,200 the additional payoff for carrying on was looking like $800. I was getting a bit tired of it and at least we had the victory that they would pay something for what they did. So we signed off on the deal. The tenants looked pretty beaten up. I think they honestly thought they could walk without paying a penny.

They have excellent credit however and were very concerned that their payments should be properly recorded and credited to them so I think we will likely be paid. If not I am not messing around, I am either putting a lien on their house or setting collections on them. I am now ultra careful about assessing tenants. Just the other day I had an applicant whose application concealed past addresses. They were on the Rent Check report so I googled the addresses and got landlord references. Lo and behold Old Oak had an ill fated four month tenancy with her in which she was late with rent twice earning two N4 notices and then did a flit and left. Instant rejection and she worked for a prominent social services agency in town, you would have thought she would have been more responsible. If i had just relied on credit I would have been burned because that was 800+. She paid her other bills, she just had a history of stiffing landlords and knew the game. This week I had an applicant who claimed to be applying on behalf of his ailing parents who had just sold a condo in the GTA. He wanted them listed as occupants and him as sole tenant. All rent money would come from him, he assured me. What do you know, he had just timed out a proposal in bankruptcy this summer and then on an income of $80k had purchased a $66k Ford truck on credit. No.

So the longer I go in this business the more cautious I become with tenant acceptance decisions. The remedies are just too painful to go through. Prevention is key.

Trust that you are well.

Best Regards,

2018 Rent Review Ontario


2018 Ontario Rent Increases capped at 1.8%
 
Ontario Minister of Housing Chris Ballard announced that the 2018 provincial rent increase guideline has been set at 1.8%, up .3% over the current year.
 
The annual rate of increase is based on the Ontario Consumer Price Index, a measure of inflation that reflects current economic conditions affecting the
cost-of-living.
 
As in previous years, this amount is the maximum that a tenant's rent can be raised without approval from the provincial Landlord and Tenant Board, and applies to all new rent increases made between January 1 and December 31, 2018; it is also retroactively effective as of April 20, 2017.
 
Unlike previous years, however, the ministry’s annual rent control guidelines have now been expanded to include all private rental units, including those built as tenant-occupied premises on or before November 1, 1991.
 
This anticipated change results from the recently-passed Rental Fairness Act, 2017 that was introduced to protect an estimated 250,000 Ontario renters living in pre-1991 units from unreasonable and/or unpredictable rent hikes.
 
Ballard, who is also the minister responsible for Ontario’s Poverty Reduction Strategy, said the aim of the expanded 2018 rent increase guidelines is to make the housing market fairer for all, “ensuring that everyone in Ontario has the peace of mind they need...”
 
Please visit 
 
 
to read the entire Government of Ontario announcement.

New Ontario Rules When Buying a Property With Tenants


  If you have a client who is interested in buying a property, but it has a tenant, make sure to extend the closing date because the required notice days in Ontario have now doubled in length. In the past, only 30 days written notice was required to terminate a tenancy. Now it’s 60.

  Landlord in London Onatrio

  Another glitch: the date the tenancy ends must coincide with the end of term or rent period. This could result in a full year passing before your client can move in.

  For example, if the tenant’s lease ends Dec. 1, 2018, your buyer can’t move until Dec. 1, 2018 even if the closing date is Nov. 1, 2017. And if you’re thinking of “fudging the dates” by giving less notice than is required, don’t! If the termination date is so much as a day off, the notice is invalid, and you’ll have to start all over again.

  Previously, landlords have not been required to compensate the tenant if the landlord gave proper notice and acted in good faith. That’s no longer so. Section 48.1 of the RTA requires that the landlord compensate the tenant equal to one month’s rent. This amount has to be paid prior to the termination date specified on the N12 notice. This means a tenant can take the money and still refuse to leave!

  Some real estate salespeople have encouraged investor buyers to buy a place and evict a tenant under the pretense that the buyer, or her family member, is moving in. Under the new rules, if the buyer gets caught, she can be fined up to $25,000. This fine can also be levied if the buyer decides to move out before 12 months are up following the date of eviction, rent it to her cousin and charge rent or demolish the place.

  Given these rules, it’s important that you get a copy of the tenant’s lease. This way, you can gauge when your buyer can move in and how much she’ll have to pay the tenant to move out.  It’s also important that you always use the updated forms found on the Landlord and Tenant Board’s website, because the previous forms are no longer valid.

 To avoid extortion by the tenant – a practice whereby tenants demand money in order to move – make sure that your buyer, once she becomes the landlord, files an L2 application and obtains an order terminating the tenancy pursuant to the notice prior to the termination date. Ensure that the order references the payment so that it is documented that you will be providing the tenant with proper compensation. Getting an order in place speeds up the process if the tenant refuses to move following the notice date and prevents the tenant from extorting the landlord by demanding more and more money in order to move out.

 While affordability is an issue and the housing reforms attempted to solve this matter, the reforms have disproportionately hurt landlords and those who are scrimping and saving to buy a home. As such, buyer agents, as well as seller agents, must be aware of these financial and practical changes. They can destroy a deal.

 The above was written by   Natalka Falcomer  a lawyer in the GTA area 

 Another interesting tip about investing in London Ontario

 


London Ontario Real Estate Investing Insider


If you like what you have read so far and would like the inside scoop on real estate investing in London Ontario & area, Landlord & Tenant Act, tax tips & plain, simple investor tips, here you go. These are reports, not a constant barrage of hire me, blah blah stuff. You are never, ever under any obligation and you will never be spammed, bullsh**ted or get reality TV crap.




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