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

Tenants & Investing, A Landlords Quizz


For Rent London Ontario Houses

   A landlord-tenant privacy quiz

By Chris Seepe

   All private businesses across Canada, including residential landlords and real estate brokerages, will be impacted by the latest changes to the Personal Information Protection and Electronic Documents Act (PIPEDA) beginning Nov. 1. PIPEDA is Canada’s federal private sector privacy law that sets out the ground rules for how businesses, including landlords, must handle personal information in the course of their commercial activity. PIPEDA was significantly amended when the The Digital Privacy Act received Royal Assent in June 2015.

  Under PIPEDA, landlords must:

  • Obtain a tenant’s consent to collect, use or disclose a person’s personal information.
  • Identify the reasons for collecting the personal information before collection and only ask for the limited information needed for what a reasonable person would consider appropriate to the circumstances.
  • Provide an individual with access to the personal information the holder has about the individual and allow them to challenge its accuracy.
  • Only use a tenant’s personal information for the purposes for which it was collected.

  The time limit for PIPEDA court applications changed from 45 days to one year.

  As of Nov. 1, PIPEDA will include a mandatory requirement for organizations to give written notice to affected individuals and to the commissioner about privacy breaches and to maintain records for 24 months about each breach.

  All businesses (and landlords of every size) must ensure that personal information is protected by appropriate safeguards including physical measures (locked filing cabinets, restricting access to offices, alarm systems), technological tools (passwords, encryption, firewalls) and organizational controls (security clearances, limiting access to a “need-to-know” basis, staff training, agreements).

  You say you knew all this already? What about the case where a landlord and tenant had a verbal tenancy agreement (permitted under the RTA) to allow the tenant to grow up to four cannabis plants but the landlord discovered 60 plants? Here’s the answer.

 The full implications of PIPEDA to Canadian businesses would require possibly a small book to analyze the obligations for every type of small business. My personal focus is on residential “landlording”, which includes Realtors who assist residential property investors, so here’s a 20 Question Landlord-Tenant Privacy test:

   Ask Questions For A Realtor

  1. Do you need a tenant’s SIN number for most things?
  2. Do you need permission to capture a tenant’s face on a surveillance camera?
  3. Do you need written permission to do a credit check?
  4. What minimum information is needed to do a credit check?
  5. Is it against the law to demand a tenant’s SIN number?
  6. Can you deny a tenancy applicant because they didn’t give you their SIN number?
  7. Can you use the SIN as a general tenant identifier, for example in your accounting system?
  8. Can a landlord ask for a driver’s licence, tax information, pay stubs?
  9. Can you look into a tenant’s background by looking at social media postings or calling another landlord?
  10. Can you put a tenant’s name on a “bad tenant” list?
  11. Can you verbally disclose bad tenant behaviour to other landlords, for example a phone reference?
  12. Can you take pictures of a tenant’s apartment and contents if you suspect a tenancy agreement breach?
  13. Can you set up surveillance cameras in your building that capture tenant faces?
  14. Can a tenant ask what information you hold about them?
  15. Can other tenants collect information on a tenant?
  16. How long can you retain a tenant’s information?
  17. Is there a prescribed process for personal information destruction?
  18. Can you disclose personal information to pursue a debt?
  19. Can police agencies demand tenant information from you?
  20. Can police agencies demand the landlord allow them entry to a tenant’s unit?

Short (and incomplete) answers:

  1. No.
  2. Yes, but can be implied.
  3. Yes.
  4. Name, address, date of birth.
  5. No law currently prevents landlords from asking for a SIN for purposes such as identification.
  6. No.
  7. No.
  8. Privacy law doesn’t prevent such requests but information must be fully protected.
  9. Informal checks are a collection of personal information – permission required, privacy laws apply.
  10. Not to an unregulated or ad hoc list.
  11. No.
  12. Strict rules apply.
  13. Strict rules apply.
  14. Yes.
  15. Generally, no.
  16. No prescribed period but not indefinitely.
  17. No but “must be done appropriately”.
  18. Strict rules apply. Disclosure to a tenant’s family, co-workers or on social media is not allowed.
  19. Strict rules apply, specific documentation required.
  20. Maybe, if police declare it an emergency. Otherwise, warrant usually required or 24-hours’ notice to tenant. Strict rules apply.

 

   Now, be honest with yourself: how well did you score? More importantly, do you have all of the above risk exposures covered in your Rental Application form and Standard Lease appendix B clauses?

 


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,

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 hiring 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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