27. Landlords & Tenants with Jessica Travers

In this episode, our hosts Nick and Rajiv sit down with special guest Jessica Travers from Lotus Paralegal to chat about everything you need to know when it comes to landlord-tenant law in Ontario.

From dealing with difficult tenants to subleasing property, the conversation covers a wide range of topics that every landlord or tenant should be aware of. Jessica offers practical advice and tips on how to navigate these complex situations, emphasizing the importance of communication and collaboration between all parties involved.

Whether you're a seasoned landlord or a first-time renter, you'll come away from this episode with a better understanding of your rights and responsibilities under the law.

So sit back, relax, and join us for an engaging and informative discussion on all things real estate and property management. Tune in to TR Talks!

Ontario Rent Increase (00:02:54)

• Maximum percentage rent can be increased in Ontario
• Rental increase exemption for newer properties

Selling Investment Property with Tenants (00:04:40)

• Tenant support services
• Cash for keys option
• Notice to provide vacant possession
• Application for above guideline increase

Tenant Refuses to Move Out (00:08:45)

• Tenant does not want to leave
• Exhausting all options
• Issuing application for a merits hearing

Responsibility for Tenant Not Moving Out on Closing Day (00:09:40)

• Importance of proper communication and collaboration between landlord and tenant
• Signing of N11
• Application for an L2 hearing

Maintenance and Repairs (00:11:45)

• Encouraging mediation between landlord and tenant
• T6 application

Subleasing Property (00:12:45)

• Damage caused by tenant subleasing property without landlord's knowledge
• Importance of acting quickly in this situation

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Transcript

[00:00:00] TEASER

Jessica: that can be quite problematic because, you now have someone in there who's renting the property from you and, you've not vetted them. You don't know their background. I think in the case that we dealt with, there was some damage to the unit as well. so this is one that you want to kind of nip right away and you want to contact a legal professional to file those applications, as quickly as possible.

[00:00:22] INTERVIEW BEGINS

Nick: Hi everyone, my name is Nicholas. Today I'm hosting with Rajiv here.

Rajiv: Hello.

Nick: So we have a very exciting topic today. We're going to be talking about landlords and tenants.

Rajiv: Yeah. It's just like a topic of, you know, elections, you know, hot topic.

Nick: Yeah, so we have with here a special guest, Jessica Travers from Lotus Paralegal. 

Jessica: Thanks guys.

Nick: Thanks for joining us. Do you mind just telling the listeners a little bit about yourself?

Jessica: Sure. I'm a paralegal. I provide, legal services that relate to landlord and tenant. that is the only area and, I assist a lot of landlords and tenants in resolving and mitigating, any issues that they may have.

Nick: Awesome. and how's the business right now in terms of these kind of issues? You getting, been getting a lot of cases?

Jessica: it's quite busy. as we all know, the board is a little bit backed up. I think that there's some measures that have been put in place recently, that are going to hope to kind of add more adjudicators so we can get through the backlog. but it is quite busy,

Rajiv: Wow. So, just a little bit, about yourself, Jessica, how long you've been doing this, service?

Jessica: since 2017.

Rajiv: Wow. And you've been busy since COVID time, left, right and center all the time.

Jessica: Yes, COVID really, I think increased, the amount of, or the need for, my services, especially with the transition going from a lot of in person hearings to navigating online, them using a portal and, I guess kind of the relationships between landlords and tenants, how that changed through COVID.

Rajiv: Yeah. so when you're talking about portals, that means since COVID that there has been some transition from in person going into the more digital way of reaching out to the court.

Jessica: Absolutely. So, since COVID, the board has really transitioned to doing their hearings online, it's very efficient, in terms of being able to access, being able to have hearings in one location where you are and, and you're hearing maybe, in regards to a property somewhere else. So you don't actually have to travel to that city any longer.

 you can log in through zoom or phone. And it's been very, um, helpful, I think.

Rajiv: I feel that maybe expediting few things because even the judges and the legal, personnel's maybe also working from home or, at a place where they are not able to reach to the, court.

Jessica: Exactly. I mean, landlords as well, a lot of my clients are not local. sometimes they're out of province and even out of country and overseas. 

So, having, giving them the ability to join those hearings and attend those hearings, that way is, been really great.

[00:03:14] How much can you increase the rent in Ontario Today?

Rajiv: Jessica, there are a lot of, rental issues happening with regards to, how much you can increase the rent, in Ontario today. Can you just elaborate something on that?

Jessica: Sure. each year, there is a percentage in which you can raise the rent. right now it is 2. 5%. and that is the legal limit. Unless of course, your property is built after, 2018. newer properties, that meet that criteria are rental, increase exempt. So that means that you can raise it by any amount.

So, that was put in place to encourage landlords to build new homes, right? Because we're having the issue where there's not enough homes to house everybody. So, if you have a newer property, There is an exemption, and you are able to raise the rent by any amount.

Nick: Does this also apply for, like, houses, as well? Or is it just mostly condos?

Jessica: It applies for houses as well. Any property that was built after that specific time frame, is exempt from, at this time anyways, is exempt.

Rajiv: Yeah, I think, we were going through some details. It is homes built or properties built after November 15 2018. If I'm correct.

Jessica: That's right.

Nick: and is there other, I guess, exemptions in, let's say homes that are built before that, date of 2018, is there exceptions to, I guess, increase that, over that guideline?

Jessica: well, in order to do that, you would have to, make an application for an above guideline increase and go through the process through the board. but in terms of that, you would have to meet a lot of criteria in terms of, money that you have invested in the building or upgrades that you provided the tenants, possibly an increase or significant increase in your property taxes.

 there's a lot of different criteria that Can be considered, but that's something that, you would have to make an application and have an adjudicator decide on.

Rajiv: we are actually going through the same. I had a client who, wanted to purchase a property for investment purposes. But the seller was also, uh, investor. So tenant is living there. how should people deal with those kinds of scenarios where, landlord selling their investment property.

And it's another case. Well, there are two cases. One case is where the other investor is buying to also rent, but they prefer a better rent in the market. let's start with this question because I have a follow up question on this one.

Jessica: Sure. well, first and foremost, I would say you want to contact a legal professional in this area because, it's going to get somewhat, confusing and challenging. there's a lot of different options at this point. 

 if you're selling the property, and there is a tenant in the property, it might be make more sense for you to have the tenant leave the property. So there's a couple different options. one option my office specializes in is cash for keys option. That's where you provide the tenant with some support, and some monetary consideration.

And ask them to work with you in terms of vacating the property prior to selling the property so you could provide vacant possession to a purchaser. the other option is if you sell the property, and is still tenanted, depending on who's buying the property, there may be a notice that can be issued, in order to provide possession to that new owner.

 there's a lot of variables that go into this and it's really important to contact a legal professional before you make any decisions about what forms to use.

Rajiv: That's very interesting. I think the first, cash for keys seems to be, verycollaborative way of working together between the landlord and tenant. So, you know, they get paid a little more money for, um, convenience of the inconvenience caused to them to move out at a certain time.

And landlord also gets an opportunity to update the property, renovate it, paint it, clean it, so that they can maximize by getting the most value from the market.

Jessica: Absolutely. You're absolutely right. and that service is in very high demand right now. there's a lot of properties that do need those improvements. and landlords are preferring to sell with vacant possession. it alleviates some liabilities, that they may have if they're sold with tenants in them.

 and it's also very lucrative for the tenants. It gives them an opportunity to receive a monetary consideration. and in my office's case, we provide tenant support, so support to the tenants and locating programs, finding new homes, to rent, and whatever it is that they need to make the transition really smooth.

So it can be mutually beneficial.

Nick: I think, uh, we always recommend our, um, sellers to sell with a vacated property. It's a lot easier to sell an easier stage. Like you mentioned, Jessica, 

[00:07:45] What is a typical payment that landlords have to offer to get a tenant to leave?

Nick: for those, a landlords listening, though, Jessica, what is a typical, I guess, payment like cash that a landlord would have to offer, to kind of get that tenant, to leave.

Rajiv: This is regarding your cash for keys.

Nick: Cash for keys. Yeah.

Jessica: Yeah, so a couple of variables. I mean, first, we want to look at where they're living. the prices you would pay for cash for keys for someone living in Toronto area, may be different than you're paying for someone who's living in a Belleville area. So we want to consider the market. We have to think about this tenant is now going to enter the market.

They're going to need Provide of course first and last month's rent. We're going to want to cover their moving costs and any other considerations, that have been discussed and agreed upon. So, generally speaking, the rule of thumb is anywhere between 5, 000 and 10, 000 depending. I have had a few outside of or above the 10, 000 mark, but generally speaking, the majority, 95% fall within about 5, 000 to 10, 000.

Rajiv: Seems to be pretty reasonable because you're, covering, you know, the deposits, you're covering the moving costs and the inconvenience costs. So that I think many tenants are going to be accommodating in accepting that kind of a trade. but of course, you know, like every landlord is not the best landlord, same, every tenant is not the best tenant.

[00:09:02] What happens when the tenant refuses to move out?

Rajiv: So what happens, the tenant refuses to move out?

Jessica: Well, a couple of different things. And again, it depends on the situation. we've run into cases where sometimes tenants just say like, hey, I just don't want to go. And that's okay. and then we just go back to the landlord and let them know this is your situation. the tenant doesn't want to leave.

 we've exhausted all options. We've increased the amount to, the highest that the landlord is able to do. And with all of the support in place, the tenant just says no. So we let them know these are your options. At this point, you may have to sell the house, with the tenant in it. now, Once the house is sold, depending on who's going to move in, will you have an end user?

If you have an end user, then we may be issuing an N12, on behalf of the seller, on behalf of the buyer, for them to have the property when they move in. it just depends really on who's purchasing the house, if they intend on living in it, and all of those variables.

[00:09:56] If we end up do selling the house and on the day of closing, the tenant doesn't move, who's liable for that?

Nick: but let's take it to, I guess, to the worst case scenario. If we end up do selling the house and on the day of closing, the tenant doesn't move, who's liable for that?

Jessica: Well, again, that's interesting. so we don't ever want to get to that point. I think there's a lot of steps ahead of that, that we should, Dot our I's and cross our T's with because, when we have that happen and we're on the day of closing and we have an end user who's going to want to move in the property, we're hoping to, first of all, get an N 11 signed, hopefully after we issued the N 12, provided the one month's rent compensation, if that's what's required, depending on how many units are in the building, Then we would want to have an N 11 signed and filed so that we had some sort of recourse, should the closing date happen and the tenant decide, okay, I can't go.

We never want to leave it until the last minute, in that case. if it is that the tenant has not signed an N11 and we don't have them agreeable, that we've gone ahead and we've filed, the the N12 form, an L2 application to have a hearing, a merits hearing, and that's where the adjudicator, would make a determination at that point and provide an order that the tenant leave.

we want to have that in place. We never want to leave it to the last day to wait and see what happens.

Rajiv: Absolutely. back in our team, everybody, When we're talking to these people, who are the sellers, like landlords, we always recommend them that you want to work with them and, you know, work ahead of time, not leaving things to the last minute and must connect with a professional like yourself.

 who can guide through the right forms, the right language in the communication as well, not being, bullying with them because it has to be a win win situation for everybody.

Jessica: Yes, I think that's important as well. I mean,these forms, N 12s, N 13s have serious repercussions, if they're issued and they're issued in the, incorrect way. There can be fines, and there can be other problems that extend from issuing forms incorrectly. So, it's always important that you consult with a legal professional before you do those.

[00:11:57] What happens if the landlord is being irresponsible with their tenants?

Nick: So let's take a step back and Let's talk about tenants. Let's talk about, let's say, if, the reverse is happening where the landlord is not, let's say, upkeeping that unit in terms of maintenance and repairs. what are the steps for the tenant if let's say that the landlord is being the one that's irresponsible or, giving the tenant a hard 

Rajiv: time

That's a great question.

Nick: because

Jessica: and so I always encourage... mediation, and I always encourage keeping a positive relationship with your landlord. So, I mean, first steps would be, I would want to be, encouraging the tenants to contact, their landlord and let them know in writing, of course, so you have record that, hey, this is something that needs to be maintained or fixed, or this is a problem that I'm having, how can we resolve that?

so first, just sort of asking the landlord, to cooperate in that sense. if you feel that your, needs are not being met, or the maintenance issue is not being addressed, then you have the option of a T6 application and that's where you're asking the board to make a determination to either provide a rent abatement or to force the landlord to repair or maintain something that he has not.

[00:13:03] What happens when your tenant subleases your property?

Rajiv: Okay. another question comes to my mind is there are situation, where the tenant is under a lease contract. but then as some thought process they tried to do is they sublease it.

Jessica: Right.

Rajiv: And without the knowledge of the landlord, we don't know, and I think you did help one of our clients last year who suffered a lot of damage financially, but end of the day, the result was happy.

He was happy how you did it. could you just help us, listeners on that? How to, to go about and get this result?

Jessica: Yeah, so, this one is a tricky one. You want to right away. you want to act on this right away because you have 30 days from which a time that you realize that the property is being subletted to file an application with the board to make that determination and ask For that tenant to be or that individual to be removed, and to terminate the tenancy, with the person who had signed the lease.

So, that can be quite problematic because, you now have someone in there who's renting the property from you and, you've not vetted them. You don't know their background. I think in the case that we dealt with, there was some damage to the unit as well. so this is one that you want to kind of nip right away and you want to contact a legal professional to file those applications, as quickly as possible.

Rajiv: Absolutely. Because I think. The landlord was not even getting the rent. the sublet was giving the rent to the other tenant at that time.

Nick: time. Now I think, well those are off cases or off cases for sure. by getting back to let's say the more common scenarios. 

[00:14:39] What are the types of fees that landlords can charge a tenant, uh, in like basically in Ontario?

Nick: What are the types of fees that landlords can charge a tenant, in like basically in Ontario. Like I meant like in terms of, like is there any restrictions? Like, are they, for instance, I kind of know the answer already, but I would like to elaborate too. Jessica, like let's say damaged deposits, pest deposits, are those allowed?

Jessica: No, those are not allowed. damage deposits, pet deposits, they're not allowed to ask for those. The only thing the landlord can ask for is first and last month's rent. I do see a lot of contracts, or appendixes added on to leases where the landlord is including that. And sometimes even, I'm seeing additional months of rent being asked for in order to secure the apartment.

So those are unlawful. And definitely not legal at all

In addition, just to branch off of that key deposits, sometimes I see these come up where we're having key deposits that are 300 or 400, something like that. key deposits are only supposed to be the price of the replacement key. So if a key fob is 160, that's how much the key deposit should be.

Nick: The only thing is I find that this part is a kind of a gray area because at the end of the day, the landlord still has the right to rent out to, I guess, a person that's willing to pay that kind of deposit. if not, then I guess they can skip that person. Like, what would you suggest, like, if that's the case?

Like, is there any way around it?

Jessica: Well, I would say this, that if you are, considering renting a unit and, the landlord initially is asking you to do things that are illegal, I would say that you shouldn't rent from that landlord because it's likely that, you'll run into other difficulties throughout the tenancy. So, you always want to start off on the right foot.

If you have a landlord who doesn't respect the RTA. the Residential Tenancies Act, and understand those rules and obligations, I would say that's not a good place to rent.

Nick: correct me if I'm wrong too, Jessica. I do believe that if they do end up giving those kind of deposits, they can actually go to the like land on tenant boarding and, make a complaint or, and get the deposit back, right?

Jessica: They can, absolutely they can. I would always say try to head it off and don't give those deposits at all, even though it is possible, to file an application, go to the board and ask the adjudicator to give you an order, to, for the landlord to return those monies. but you always want to avoid it at any cost, having to go through that lengthy process.

Rajiv: Yeah. But again, tenants are offering on their own.

Jessica: That's true. And tenants can offer that. It just can't be a requirement of the apartment. Tenants can say,

Nick: that's a gray area.

Rajiv: It's a gray

area. That's 

Nick: the gray area.

Rajiv: But the thing is, as a landlord, I never asked for it. but I. Have, you know, a couple of offers on the table to choose from, then, more or less all the same, but one of the tenants says, you know what, I'm willing to pay you all the whole year, 12 month rent, that way you don't have to worry about, missing out any payment.

Jessica: There's nothing unlawful about that at all. if the tenant is saying, hey, I want to pay a year up front, that's fine. and you would write that in your lease that the tenant volunteers this amount at this time. This is how much they're paying. You would want to provide them with a receipt for that.

there's nothing wrong with that at all.

Rajiv: Perfect. I think I'm a great landlord myself because. I had one tenant who, a one month complained, you know, my toilet is not flushing probably. And there's a, you know, the sink has the faucet leak drops. I got it replaced within, I think three days I got the plumbers in and they have to be certified of course.

And then another one, the furnace was not working properly. I got the furnace replaced. So I feel I'm a great tenant, a landlord here.

Jessica: Yep, there's a lot of really great landlords out there, that are very diligent and that care for their investment property, so there's lots of, a really great landlords out there as

Rajiv: No, absolutely. They're not only great landlords. Jessica, I 20 years in the business. I have seen 99% of our tenants have been amazing, amazing. They leave the properties, pick and span, clean it up just like professionals. So, you know, we've been blessed. Our investor clients have been very blessed for that.

But again, you know, nothing is lines cannot be straight. You know, there will be always something or the other, which sometimes challenges come. We, we try to mitigate and get them solved.

Nick: Yep. So, Jessica, I just want to ask you to, of course, all these filing, these forms, things like that, the landlords and tenants can always do it, I guess, themselves, so to speak. But what can you do to kind of help them, like, instead of, of course, doing themselves, hire you to, like, what, what's the difference there?

Like, what can you do more on top of that to guide them?

Jessica: To guide them. so I would say this. One of the biggest issues that I have come in is, landlords. I see this very, very often. Landlords will, issue an N4, and have incorrect address or, something's missing N4, Cause you to wait a long time for a hearing, get to the hearing and have your application dismissed under section 43.

So, in terms of what I provide is I ensure that all of those forms are filled correctly, they're serviced correctly. and one of the additional, items that my office provides is mediation and mitigation in every single file. so I'm always looking to see, can I chat with the tenants? What middle ground can we come to resolve this rather than waiting, all that time for a hearing?

Because often once we get to a hearing, mediation is provided and that's where we talk to the tenants at that time anyways and try to come up with an agreement that's, good for everybody. So I'm always trying to resolve ahead of time. what agreement can we come to, what provision can we put in place, that can resolve the issue that brought you to my office?

Nick: And then are there any resources or organizations here that, that can provide, I guess, free legal advice or assistance to tenants and landlords?

Jessica: Yeah, in each city there is a legal clinic that you can contact and they can provide some free legal advice for you as well.

Rajiv: Okay. just like credit bureau carries the Credit score of everybody. is there any kind of a resource available, where we can reach out? These are the not so great landlords in the market or not so great tenants in the market. is there a database like that or something where we can help both sides of the party?

Jessica: so I will say this when we're doing, background checks, for tenants, or maybe you're looking to rent a place and you're, curious about your landlord. you can access can Lee, which is a legal site and, you can check under the Ontario landlord and tenant board heading and you can type in the name of your landlord or the name of your tenant.

 and you can bring up. any sort of applications or hearings that have been heard in regards to them. So in my searches, or what I try to educate landlords on is, we're having a new tenant come in. Let's search them on Canlea on the landlord and tenant board site and, find out have they ever been evicted before?

Have they had any applications brought before the board? that's a good site to kind of look and see, if they've had any legal proceedings in regards to the LTB before.

Rajiv: so Jessica, I think I want to ask, if you can disclose as well, like what was the most complex situation, like a file that you worked on and how did you end up solving it 

Jessica: I think each file, has its own challenges, and almost every file is very unique, even if it is the same N4 for non payment. They're all very unique. I think one of the most challenging you know, that I have over and over. I can't think of a specific one, but generally speaking, the most challenging is non payment of rent.

And I think the reason for that is because a lot of the time, these are good tenants that have just fallen on hard times and are falling behind in rent and are at risk of losing, their, their home where they're living. these are the most challenging because you have lots of stories and lots of different reasons.

And they're challenging because, You know, you have empathy towards the person, but you also understand the landlord's position as well is that it is a business and he is required to pay his mortgage and those are very challenging. The way that we handle them is, working with both sides in communication, which I think is super important for landlords and tenants is communication with each other outside of, any applications or forms that we have.

I think that a lot can be resolved, with proper communication and, and all of that.

Rajiv: I think communication is the key, which is important, not trying to, being bully or pushy, you know, empathy is part of the way, and I think empathy has to be on both sides. Yes, tenant can only afford so much and has some financial issues, but it is not only one sided issue. You know, the landlord also needs to pay not only the mortgages, but also has to pay property taxes, which belongs to, you know, the taxes supports the government services and for public services as well.

The money is used for that. And same as the condominium fee, if any, there are any other maintenance. So I think it's, you know, we can't say that. Tenant is suffering. It is everybody's suffering here.

Jessica: Yes, it is. It is unfortunately sort of a cycle. Everybody is suffering and, it's a challenging situation to mitigate, but so often, I've been able to create repayment plans that make sense for everybody. We're saving tenancies. We're making sure that the tenants are supported and we're making sure at the same time that the landlords are supported because, sometimes that's overlooked as well.

Rajiv: Absolutely.

Nick: Well, Jessica, can you please, let us know your, or let the listeners know your contact information and how, how are they supposed to reach out to you?

Rajiv: And we will also post it on our, you know, once we upload it, we'll put your income.

Jessica: Sure. it's Lotus Paralegal. my website is, www. lotusparalegal. com. and you can give me a call at 289 821 5048, and I do provide free consultations.

Nick: Thank you, Jessica. And for everyone, please follow and share this podcast with your family and friends, comment, ask questions and make requests on topics you'd like us to cover. We'll see you guys next week and, peace.

Jessica: Thanks guys.

Rajiv: for your time. And once again, thank you.

Jessica: Thank you. Thanks.