As a landlord, what is the #1 most important thing to you?
The tenants pay rent on time, obviously, right?
What if they don’t?
First, you need to serve an N4 notice to the tenants giving them a chance to pay back the rent in 14 days and if they don’t, you can apply to the Landlord and Tenant Board to get them evicted.
So you waited 14 days and the tenants paid you nothing.
Of course you want the tenants out and you file the L1 application to the board to get the tenants evicted.
Once the application is filed, you have to wait for a hearing date.
Your tenants continue to miss rent payments on the second, third, fourth months and you are still waiting for that hearing date.
After 8 months, you finally get that hearing date.
By then, your tenants are already owing over $15,000 of rent.
If they pay you back a thousand dollars now, you might lose the case because your tenants are making an effort to pay you back.
It is ridiculous how the Landlord and Tenant Board operates.
When the hearing is done, it might still take months to get that eviction order out so you can finally get rid of the bad tenants.
The whole process can easily take a year.
You see, it is very very costly to take in tenants who don’t pay rent.
And this is exactly the reason why we have to reject a lot of offers upfront, it is too costly to take any risks for non-payment of rent.
Today, I’m going to share with you 5 frustrating facts about the Landlord and Tenant Board, including the true reasons why they are so slow.
At the end of the video, I’m going to share a very simple solution on how to handle non-payment of rent and I’m going to need your support for that, so please make sure you stay till the very end.
Fact #1: High Backlog Volume
In 2022 to 23, the LTB received more than 37,000 L1 applications to evict tenants for non-payment of rent, making up more than half of all applications from landlords.
Only 7% of the hearings were scheduled within 2 months.
As of February this year, we have about 53,000 unresolved cases piling up at the LTB.
Around 50% of those, that’s more than 25,000 cases, are related to non-payment of rent.
Fact #2: Millions of Dollars Lost
The average rent in Toronto is roughly $2,500 per month.
With 25,000 cases on non-payment of rent, let’s assume they are all just missing one month of rent, that’s $62 million dollars lost in rent payment, in one month.
That means $2 million dollars is lost in our economy every single day.
I don’t think anyone would be surprised to hear that there are a lot of public complaints about the LTB.
An independent investigation was conducted on the LTB and the result was detailed in a 92 page report.
I actually read through the whole report and there are 3 more surprising facts I want to share with you.
You have probably never heard about them before.
Fact #3: Pause for Government Transition
When did cases start piling up in the LTB?
2018.
What’s the big thing that happened in 2018?
Provincial election, the Conservative Party took over.
Prior to 2018, there had not been a change of government for 15 years.
Why did that matter to the LTB?
Well, who’s responsible for appointing the members of the LTB?
Exactly, the government.
Different governments appoint different people.
So around election time, before and after, members of the LTB would limit their activities.
They tried to do less because they were unsure about their future.
That’s when cases start piling up.
I have never thought about this before but this is actually from the investigation report.
By November 2019, 5 months before the pandemic, the number of unresolved cases in the LTB reached 20,000.
Fact #4: Work from Home Failure
Landlords are burning $2 million dollars per day while waiting for LTB court date and court order.
Yet, as of today, all Landlord and Tenant Board offices in Ontario remain closed to the public for in-person services.
All hearings are conducted virtually in Zoom meetings.
I know people always say work from home doesn’t impact productivity or efficiency.
But in reality, again this is from the investigation report, the move to virtual work in March 2020 significantly impacted the LTB’s ability to conduct training.
They hired a lot of people to help clear the backlog, but virtual training proved to be very difficult for both trainers and trainees.
The board members are actually saying that virtual technology has slowed them down big time.
It also drives people attending the hearings crazy.
A woman had her long awaited hearing scheduled for the day.
You know, for these hearings, they don’t tell you what time, you have to log in and wait for your case to get called, so you might end up burning the whole day waiting to get called.
So this woman tried to log in at 8 am, she got admitted to the virtual waiting room at 8:30.
Eventually, a moderator logged her into the hearing room at 10:14 only to find out that her case was already called at 9:15.
She waited 10 months for this hearing and the case was dismissed because of her so-called absence.
After numerous disputes, she was told that her case would be rescheduled, who knows how many months after.
People can travel around the world, but the LTB can’t go back to the office to speed things up, beats me.
Fact #5: Broken System with Outdated Technology
This one doesn’t take much explanation.
Old system creates delays and doesn’t track things properly.
In one case, there were 1,500 applicants waiting in line for more than 30 days for nothing, just by mistake.
It’s madness, chaos.
Now that you’ve heard the problem, let’s focus on the solution.
Non-payment of rent should be the most straightforward kind of case.
They either pay rent, or they don’t.
It is extremely easy to prove one way or the other.
I really don’t see a point in conducting a hearing.
What’s there to hear about?
It is really just a waste of everyone’s time and money.
In the province of British Columbia, if the tenant is late paying rent just for 1 day, the landlord can issue a 10 day eviction notice.
If nothing happens after the 10 days, the landlord can file a direct request to get an Order of Possession.
There is no need for a hearing.
The whole process may still take 2 months from the date the tenant missed rent to the day that the tenant is out the door.
But that’s a life changing process compared to what we have in Ontario right now.
Ontario has previously followed BC’s footsteps on the Non-Resident Speculation Tax and the Vacant Home Tax.
I don’t see why we can’t implement the same eviction process on tenants who don’t pay rent.
It really shouldn’t be that complicated.
A couple months ago, an Ontario landlord suffering from more than $24,000 outstanding rent started a petition to demand for automatic eviction order for non-payment of rent.
He has collected 30,000 signatures to support the petition.
If you support automatic eviction to be implemented when tenants don’t pay rent, give me a like and comment below to voice your opinion for a change.
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