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FE Magazine 2009 No. 2 Mar-Apr - FRPO

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<strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

Bill 150, The Green<br />

Energy Act, <strong>2009</strong><br />

A Landlord’s Perspective<br />

Tenant Bankruptcy<br />

& Beyond<br />

Vacancy Remains<br />

High in Affordable<br />

Rental Units<br />

<strong>FRPO</strong> Member Profile:<br />

Surana Baptiste,<br />

Suite Collections<br />

Chair's Report: The Ontario Government Must<br />

Clarify its Smart Meter Objectives


Contents<br />

MARCH / APRIL <strong>2009</strong><br />

ECONOMIC OUTLOOK<br />

FOR <strong>2009</strong><br />

By Pascal Gauthier<br />

11<br />

2008 CMHC RENTAL<br />

MARKET SURVEY<br />

By Ted Tsiakopoulos<br />

20<br />

TENANT BANKRUPTCY<br />

& BEYOND<br />

By Krista R. Chaytor<br />

25<br />

VACANCY REMAINS HIGH IN<br />

AFFORDABLE RENTAL UNITS<br />

Ontario’s Average 2.7% Vacancy<br />

Rate Masks Differences Across<br />

the Rent Spectrum<br />

By Mike Chopowick<br />

27<br />

Features<br />

A LANDLORD’S PERSPECTIVE<br />

Bill 150, The Green<br />

Energy Act, <strong>2009</strong><br />

By R. G. Doumani, Scot Stoll and<br />

Patrick Harrington<br />

31<br />

J.D. POWER CUSTOMER<br />

SERVICE CHAMPIONS<br />

RECOGNIZED<br />

34<br />

DOES RESIDENT<br />

SATISFACTION REALLY<br />

MATTER<br />

By <strong>Mar</strong>c Thibault<br />

35<br />

SIFTON PROPERTIES<br />

WINS AWARD<br />

Sifton Recognized by the<br />

Architectural Conservancy of<br />

Ontario's Local Branch<br />

By Patrick Maloney,<br />

the London Free Press<br />

37<br />

Cover:<br />

Surana Baptiste,<br />

Suite Collections<br />

pg.<br />

14<br />

Departments<br />

CHAIR’S REPORT<br />

<strong>No</strong>w is the time for the Ontario<br />

government to be clear on its<br />

smart meter objectives.<br />

By David Horwood<br />

6<br />

CFAA REPORT<br />

New Renovation Tax Credit<br />

Ignores Landlords & Tenants<br />

By John Dickie<br />

9<br />

<strong>FRPO</strong> MEMBER PROFILE<br />

Surana Baptiste, Suite Collections<br />

14<br />

READ THE FINE PRINT<br />

Delays Threaten<br />

Effectiveness of Board<br />

By Harry Fine<br />

18<br />

<strong>FRPO</strong> BULLETIN WRAP-UP<br />

43<br />

A Landlord’s<br />

Perspective,<br />

Bill 150<br />

pg.<br />

31<br />

APARTMENT SECURITY<br />

By Alan Dutkewich<br />

38<br />

OVERWHELMING NEED<br />

41<br />

Apartment Security<br />

pg.<br />

38<br />

Tenant<br />

Bankruptcy<br />

pg.<br />

25<br />

4


Chair’s Report<br />

<strong>No</strong>w is the Time for the Ontario Government to be<br />

Clear on its Smart Meter Objectives.<br />

By David Horwood<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

David Horwood, <strong>FRPO</strong> Chair<br />

Last year I reported that submetering<br />

of electricity in apartment<br />

buildings would be one<br />

of <strong>FRPO</strong>’s top policy priorities.<br />

Sub-metering is one of the greatest<br />

opportunities we have to achieve<br />

energy savings in our industry. It is<br />

also one of the greenest initiatives<br />

available to the province of Ontario: it<br />

results in conservation, reducing the<br />

need for new generation. However, our<br />

industry now faces significant regulatory<br />

risk related to sub-metering: if<br />

bad or unfair rules are put in place by<br />

the province, there will be no conservation<br />

benefit and high costs.<br />

Being supportive of the government’s<br />

objective to install smart meters in<br />

every home and business to help with<br />

conservation, many landlords have<br />

started sub-metering projects of their<br />

own to give tenants more control over<br />

their electricity costs.<br />

“… we are going to give them<br />

[consumers] the tools to better<br />

manage their costs. That includes<br />

putting smart meters into 800,000<br />

homes by 2007 and every home<br />

by 2010.”<br />

Premier Dalton McGuinty,<br />

September 14, 2005<br />

On <strong>Mar</strong>ch 24, <strong>2009</strong>, however, something<br />

extraordinary happened: the<br />

Ontario Energy Board (OEB) issued a<br />

bulletin stating that installation of<br />

meters and metering equipment in residential<br />

rental complexes by anyone<br />

other than local distribution companies<br />

is prohibited under the Electricity Act.<br />

<strong>FRPO</strong> immediately notified members<br />

of this bulletin. As of the writing of<br />

this article, many of our questions<br />

about what this means for affected<br />

landlords have been left unanswered<br />

by the OEB. <strong>FRPO</strong> is pursuing<br />

answers to these questions. This bulletin<br />

was issued without any consultation,<br />

and was shocking considering<br />

the countless meetings we have had to<br />

discuss sub-metering with the OEB,<br />

the Ministry of Energy, the Ministry of<br />

Municipal Affairs and Housing and<br />

even the Premier himself.<br />

It is also bizarre that any responsible<br />

government would say it wants to<br />

achieve an objective that is actually<br />

illegal under its own laws. This is an<br />

unusual situation and <strong>FRPO</strong> continues<br />

to seek explanations and answers<br />

from the OEB and the government.<br />

For households to conserve, they need<br />

to know their usage. This is why the<br />

Ontario Government set an objective<br />

of implementing smart meters in every<br />

home and business by the year 2010.<br />

This is an objective we support and<br />

look forward to helping the government<br />

achieve. It is a vital tool to help<br />

tenants conserve their electricity con-<br />

6


sumption and control their own<br />

monthly costs.<br />

However, Ontario’s rental housing<br />

sector faces a unique challenge: Most<br />

multi-unit buildings are currently<br />

‘bulk-metered’, meaning that tenants<br />

subsidize their neighbour’s electricity<br />

consumption, and have no knowledge<br />

of their month-to-month usage,<br />

leaving them with little ability to conserve.<br />

<strong>No</strong>t all tenants face this disadvantage<br />

- in fact, over 25% of Ontario’s<br />

tenants now live in sub-metered suites,<br />

pay their own electricity bills and<br />

benefit from having the ability to<br />

control their own electricity costs.<br />

“By the end of December 2007,<br />

more than one million homes<br />

and small businesses had smart<br />

meters installed, exceeding the<br />

target of 800,000 for that date.<br />

The goal is to have smart meters<br />

installed across the province by<br />

the end of 2010.”<br />

Ontario Ministry of Energy and<br />

Infrastructure, 2008-<strong>2009</strong><br />

Business Plan<br />

Tenants in sub-metered rental suites<br />

typically see 10% to 40% savings in electricity<br />

usage compared to tenants in<br />

bulk-metered buildings. If these savings<br />

were extended to the three-quarters of<br />

remaining tenants living in bulkmetered<br />

buildings, it could save between<br />

95 MW and 380 MW in average<br />

monthly demand across Ontario. This<br />

translates into 7% to 28% of Ontario’s<br />

2010 conservation target – all achieved<br />

by simply allowing tenants to know and<br />

pay for their own usage.<br />

<strong>No</strong>t withstanding the OEB’s prohibition<br />

on sub-metering, <strong>FRPO</strong> remains<br />

concerned the government is contemplating<br />

poorly written legislation and<br />

regulations that will actually discourage<br />

energy conservation and halt the<br />

conversion of apartment buildings<br />

from bulk-metered billing to submetered<br />

billing. This would be bad for<br />

tenants, who would continue to lack<br />

the tools that homeowners have to<br />

monitor and reduce their energy usage.<br />

<strong>No</strong>w is the time for the Ontario government<br />

to be clear on its smart meter<br />

objectives. As an industry, we welcome<br />

rules that are fair for both tenants and<br />

landlords, and conducive to energy conservation.<br />

Rules (such as those in Section<br />

137 of the Residential Tenancies Act) that<br />

discourage energy conservation and<br />

make landlords liable for new fees and<br />

costs will accomplish the same thing as<br />

the recent OEB bulletin did: Sub-metering<br />

in rental housing will be halted.<br />

If the government wants our industry<br />

to help with its energy conservation<br />

objectives, it must remove barriers to<br />

sub-metering and support industry<br />

efforts to undertake sub-metering and<br />

other energy efficiency projects. F<br />

the voice of the Federation of<br />

Rental-housing Providers<br />

of Ontario<br />

A PUBLICATION OF:<br />

EDITOR:<br />

Mike Chopowick • <strong>FRPO</strong><br />

e-mail: mchopowick@frpo.org<br />

toll free: 1-877-688-1960<br />

phone: 416-385-1100 x 21<br />

fax: 416-385-7112<br />

www.frpo.org<br />

20 Upjohn Rd., Suite 105<br />

Toronto, Ontario M3B 2V9<br />

ADVERTISING & SALES:<br />

Christine Tonus • Mediapeach<br />

email: christine@mediapeach.com<br />

phone: 905-952-2224 x32<br />

fax: 905-952-0826<br />

www.mediapeach.com/fe<br />

171 Main Street South, Suite 5,<br />

Newmarket, Ontario L3Y 3Y9<br />

SUBSCRIPTIONS &<br />

ADDRESS CHANGE:<br />

Cynthia Bentley • <strong>FRPO</strong><br />

e-mail: cbentley@frpo.org<br />

toll free: 1-877-688-1960<br />

phone: 416-385-1100 x 22<br />

fax: 416-385-7112<br />

DESIGNED AND PRINTED BY:<br />

<strong>FRPO</strong> IS A MEMBER OF:<br />

Opinions expressed in articles are those of the authors and<br />

do not necessarily reflect the views and opinions of the<br />

<strong>FRPO</strong> Board or Management. <strong>FRPO</strong> and Mediapeach<br />

accepts no liability for information contained herein. All rights<br />

reserved. Contents may not be reproduced without written<br />

permission from the publisher.


THE ONTARIO GOVERNMENT IS COMMITTED TO THE INSTALLATION OF<br />

SMART SUB-METERS THROUGHOUT THE PROVINCE – THETIMETOACTISNOW.<br />

WHO WILL DELIVER<br />

the smartest solution<br />

FOR CONTROLLING<br />

ELECTRICITY COSTS<br />

THE SMARTEST SOLUTION IS ENBRIDGE ELECTRIC –<br />

ONE OF THE MOST RESPECTED NAMES IN THE ENERGY BUSINESS.<br />

Enbridge Electric Connections Inc. provides a total<br />

smart sub-meter solution which offers:<br />

• Methods to improve your bottom line<br />

• Enhanced property marketability<br />

• Smart sub-meters at our cost<br />

• Attractive conservation allowances<br />

Enbridge Electric will seamlessly integrate a<br />

customized smart sub-meter solution into your<br />

building that results in lower operating costs and<br />

improves the marketability of your suites. Enbridge<br />

Electric is the smartest solution.<br />

Remember, you have the legal right to choose<br />

your smart sub-meter service provider.<br />

Call (905) 747-5662 or email us at<br />

eesales@enbridge.com. It’s time well spent!


New Renovation Tax Credit Ignores Landlords & Tenants<br />

By John Dickie, President, Canadian Federation of Apartment Associations<br />

The <strong>2009</strong> Federal Budget allocated $3,500,000,000<br />

($3.5B) for the new Homeowner Renovation Tax<br />

Credit. Under that program homeowners are given<br />

a tax credit of 10% of the renovation spending<br />

between $1,000 and $10,000 for a maximum grant of<br />

$1,350 (10% of $9,000). Landlords and tenants were left out<br />

of the home renovation grant program.<br />

This slight is the latest in a long series of discrimination against<br />

tenants and landlords in government programs and in the tax<br />

system. For many years, public policies at all levels of government<br />

have promoted homeownership. Those policies include explicit<br />

incentives for homeownership and several benefits under the<br />

income tax system which accrue to many homeowners.<br />

Policies that Favour Home Ownership<br />

Longstanding policies and programs favour home ownership.<br />

Such policies and programs include the following:<br />

• tax-free status for capital gains on principal residences<br />

• lower property tax rates applied to owner occupied<br />

homes in many provinces<br />

• Home Buyers Plan allowing borrowing from an RRSP<br />

for the purchase of a home<br />

• the Ontario Home Ownership Savings Plan (OHOSP)<br />

• rebates on land transfer tax and closing costs for first<br />

time buyers<br />

• tax-free treatment of the imputed income from living<br />

in an owned dwelling<br />

• the imputed income from living in an owned dwelling<br />

is not considered in determining the eligibility and<br />

level of payments under the Guaranteed Income<br />

Supplement program.<br />

The main tax benefits of homeownership flow from the<br />

tax-free capital gains on one’s personal residence, and<br />

from the imputed income (i.e. value) received tax-free on<br />

the equity in one’s home each year. If a person invests<br />

$200,000 to buy a house, they pay no tax on the value of<br />

the use of that home every year. We can value that at what<br />

the rent would be, say $1,000 per month, or $12,000 per<br />

year. However, if a person rents an apartment and invests<br />

the $200,000 in company shares they will receive dividends<br />

of say $12,000. On that income they will pay at<br />

least $4,000 in income tax, leaving them only $8,000 to<br />

use to pay their rent. The tax system makes owning better<br />

than renting for people who pay income tax.<br />

In addition, the landlord who receives the $8,000 in rental<br />

income will pay income tax on part of that. Federal and<br />

provincial income tax rules further disadvantage rental<br />

housing through other tax rules raising the amount of tax<br />

that the landlord must pay. Some examples are:<br />

• taxes on capital gains (with no adjustment for inflation)<br />

• restricted ability to defer taxes if one property is sold<br />

and a replacement is bought<br />

• lower capital cost allowances than apply to commercial<br />

or industrial property<br />

Effect of Unbalanced Policy<br />

The tax system means that the housing market is not providing<br />

the rental housing opportunities needed by households<br />

with low and moderate incomes. In addition, a<br />

modern economy which relies on a mobile workforce, such<br />

as Canada’s, is not well served by the promotion of homeownership<br />

at the expense of rental housing.<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

9


Besides political expediency, the argument for leaving out<br />

landlords and tenants from a program like the Renovation<br />

Tax Credit is presumably that the building improvements it<br />

finances would raise the value of landlords’ properties, and<br />

while we can dole $3.5B of taxpayers money to home<br />

owners who are often wealthy, we cannot contemplate<br />

doling out money to landlords.<br />

Such a populist argument reflects a lack of understanding of<br />

how markets work. Renovation tax credits for landlords<br />

would reduce the overall cost of maintaining rental properties.<br />

Through competitive market forces, the reduced costs<br />

would be reflected in reduced rents for tenants. The ultimate<br />

beneficiaries of a balanced government policy would<br />

be tenants rather than landlords.<br />

The same flow-through effect applies to the other income<br />

tax and programming distinctions between owner-occupied<br />

homes and rental property. If the tax system were to be<br />

rebalanced, the short run effect would be that existing<br />

landlords would see the value of their properties rise, but in<br />

the long run the improved tax environment would stimulate<br />

the provision of more rental housing, and as a result<br />

the existing and additional rental housing would be available<br />

at a lower price.<br />

A more balanced government policy would result in improved<br />

conditions for landlords, for tenants and for the economy.<br />

Most of the policies that discriminate against landlords and<br />

tenants are policies of the provincial and federal governments.<br />

For many years landlord associations who deal with<br />

those governments have been advocating for more balance<br />

between programs for homeowners and renters.<br />

The Canadian Federation of Apartment Associations<br />

(CFAA) has advocated improved income tax treatment for<br />

rental properties, portable housing allowances and fairer<br />

energy subsidy programs and now for landlords and tenants<br />

to be included in the home renovation program. See cfaafcapi.org<br />

for more details.<br />

The Federation of Rental-housing Providers of Ontario<br />

(<strong>FRPO</strong>) is advocating for a provincial program of tax credits<br />

for rental renovations, for a Housing Benefit and for fairer<br />

property tax policies between homeowners and renters.<br />

Apartment associations have achieved numerous successes<br />

on key policies for landlords. However, on the overall<br />

issue of the bias in the tax system and in government programming,<br />

industry associations have had little success,<br />

as the new Homeowner Renovation Tax Credit illustrates.<br />

Landlords and tenants have an excellent case for fairer treatment<br />

in the tax system and in government programs.<br />

Landlords need to come together to figure out how to<br />

achieve fair treatment from our various governments. F<br />

<strong>FRPO</strong> is one of 17 members of the Canadian Federation of Apartment<br />

Associations, the sole national organization representing the interests of<br />

Canada’s $40 billion private rental housing industry, which houses more<br />

than seven million Canadians.<br />

Contract price<br />

guaranteed.<br />

Lowest price in the<br />

industry!<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

10


Economic<br />

Outlook<br />

for <strong>2009</strong><br />

By Pascal Gauthier, Economist, TD Bank Financial Group<br />

This year will unfortunately<br />

continue to bring its share of<br />

negative economic news.<br />

Credit conditions, particularly<br />

in the United States and Europe, are<br />

still in a state of flux. A renormalization<br />

of credit markets is a pre-requisite<br />

to any sustainable recovery.<br />

Meanwhile, the Canadian economy<br />

slipped into recession in the last<br />

quarter of 2008, a full year after the<br />

U.S. economy. The first half of this<br />

year promises to be the most difficult<br />

for the Canadian economy. This will<br />

be observable through reductions in<br />

output, profits, employment, and<br />

most other economic indicators. A<br />

sustained <strong>No</strong>rth American economic<br />

recovery is not in the cards before next<br />

year, which is when we feel the bulk of<br />

stimulative monetary and fiscal policy<br />

actions taken to date will be felt.<br />

It should not come as a surprise that<br />

Canada’s economic growth profile<br />

mirrors closely that of its largest<br />

trading partner, the U.S. What was<br />

rather surprising, until late last year, is<br />

a Canadian economy seemingly insulated<br />

from a severe U.S. recession – 3.6<br />

million jobs have been shed south of<br />

the border in the twelve month<br />

leading up to January. By the time the<br />

U.S. recession is done, over 6.5 million<br />

jobs will likely have been lost. Since<br />

<strong>No</strong>vember, it is clear the Canadian<br />

economy has finally succumbed to<br />

global economic headwinds. As of<br />

January, employment had retreated by<br />

a net 213,000. By the end of this recession,<br />

the Canadian economy will<br />

likely have shed half a million jobs,<br />

with an unemployment rate peaking<br />

sometime in 2010 around 10%<br />

nationally and 11% in Ontario. The<br />

worse is yet to come for the local<br />

continued...<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

11


economy, in others words. But this is a valley, and like recessions<br />

past which were followed by an eventual recovery, we<br />

will make it across this valley on the path of recovery<br />

towards another period of expansion.<br />

Real Gross Domestic Product - Canada & U.S.<br />

Q/Q % Chg. Annualized<br />

4<br />

2<br />

0<br />

-2<br />

-4<br />

-6<br />

Canada<br />

U.S.<br />

• First and foremost, the employment picture remains<br />

the single most important factor. Unemployment will<br />

no doubt rise, which is never good news for anybody.<br />

Regions more heavily dependent on manufacturing<br />

and private-sector service industries will suffer more<br />

than regions whose employment composition is more<br />

tilted to public sector activity and services. But the loss<br />

of employment will be broadly based nonetheless, and<br />

no region is immune. By itself, rising unemployment<br />

tends to push vacancy rates upwards as, for example,<br />

students unable to obtain part-time or retail jobs,<br />

must move back in with their parents.<br />

Canadian Job Losses During Recessions<br />

Thousands of Jobs<br />

0<br />

-100<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

-8<br />

Q1-08 Q3-08 Q1-09 Q3-09 Q1-10<br />

Forecast by TD Economics as at <strong>Mar</strong>ch <strong>2009</strong>.<br />

Sources: Statistics Canada, Bureau of Economic Analysis.<br />

Q3-10<br />

During the first half of last year, Canada was still benefiting<br />

greatly from a surge in value of our exported commodities. As<br />

we know, however, the price of crude oil and natural gas in<br />

particular, have since then retreated back to much lower levels<br />

in response to a highly synchronized global recession. Indeed,<br />

world economic output is expected to retreat this year, something<br />

that has never happened in the post-War period. Along<br />

with the commodity boom, Canadian residential construction<br />

was also supporting economic growth and employment<br />

in a disproportionate fashion. Both of these pillars of recent<br />

growth having now taken a bow, there are very few legs for<br />

economic growth to stand on. The lower Canadian dollar<br />

helps mitigate the loss in export revenues, but alas nowhere<br />

near enough to compensate for the sheer lack of U.S. and<br />

worldwide demand. The spillover into weaker domestic<br />

demand has become apparent nationwide as retails sales, consumer<br />

spending, and business investment contract simultaneously.<br />

The impact of the federal fiscal stimulus – $40 billion to<br />

be spent over <strong>2009</strong>-10 – will help offset some of the vacuum<br />

left by private-sector activity, but will take time to be felt and<br />

cannot by itself help avert a recession.<br />

What does this economic backdrop imply for Ontario’s<br />

rental markets Let’s examine the forces at play, some of<br />

which counter each other, to net out the most likely<br />

outcome in this medium-term horizon of <strong>2009</strong>-10.<br />

-200<br />

-300<br />

-400<br />

-462<br />

Unemployment Rate<br />

-500<br />

Trough Peak<br />

-583<br />

-615 1980s 7.0% 12.9%<br />

-600<br />

1990s 7.3% 12.1%<br />

<strong>2009</strong> F cst 5.8% 10.0%<br />

-700<br />

1981-82 1990-92 <strong>2009</strong>F<br />

Source: Statistics Canada; Forecast by TD Economics as at <strong>Mar</strong>ch <strong>2009</strong>.<br />

• On the other hand, the downturn in new and existing<br />

home sales is indicative of a much weaker flow of<br />

households into homeownership. Sales of big tickets<br />

items, with the largest of them all being a house, tend<br />

to get hit first in a recession. By itself, this tends to cap<br />

any potential increase we could see in vacancy rates.<br />

Furthermore, an increase in home foreclosures, albeit<br />

from very low levels, could marginally lower vacancy<br />

rates as these households are forced to rent.<br />

• Locally, one also has to look at any new supply that<br />

will come on tap in <strong>2009</strong>-10. Unless new rental units<br />

are being absorbed at least as much as the pre-existing<br />

occupancy rates suggest, this will drive up vacancy<br />

rates as more units become available for rent.<br />

• The pricing environment will be particularly weak. As<br />

much as home sales have fallen, this has been reflected<br />

in lower home prices. Furthermore, interest and mortgage<br />

rates are expected to remain low in <strong>2009</strong>-10. As a<br />

result, home affordability will improve significantly,<br />

12


sowing the seeds of a rebound in home sales sometime<br />

in 2010-11. This will then mean increased competition<br />

in trying to attract / retain potential first-time homebuyers.<br />

In the meantime, depending on the local composition<br />

of units (single-detached versus condo<br />

apartments or other multiples), owners of rental units<br />

will face significantly or marginally stiffer competition<br />

from units initially intended for sale. Furthermore, CPI<br />

inflation rental increase guidelines figure to be only<br />

around 1.5% and 0.5% respectively for 2010 and 2011.<br />

National Average Existing Home Price<br />

C$ (seasonally-adjusted price)<br />

$1000<br />

350<br />

330<br />

310<br />

290<br />

270<br />

250<br />

230<br />

210<br />

190<br />

170<br />

150<br />

Jan-02<br />

+78%<br />

+39%<br />

-22%<br />

Forecast<br />

Jan-05 Jan-08 Jan-11<br />

Source: CREA; Forecast by TD Economics as at <strong>Mar</strong>ch <strong>2009</strong>.<br />

• International immigration to Ontario and the GTA in<br />

particular should continue to support demand for rental<br />

units. Meanwhile, the net inter-provincial migration flow<br />

out of Ontario should abate somewhat. Much of it was<br />

being driven by better prospects out West, Alberta in particular.<br />

Given how rapidly and significantly that province’s<br />

outlook has turned, however, Alberta will not attract<br />

nearly as many workers from Ontario this year and next.<br />

This is not yet a net inflow into the province from other<br />

provinces, but the previous drag is expected to wane. To<br />

the extent that some of these potential migrants stay and<br />

rent, this also supports demand at the margin.<br />

• On net, rising unemployment should weigh in more negatively<br />

that offsetting support factors in the medium-term.<br />

At the provincial level, the vacancy rate is likely to increase<br />

from 2.7% (as of October 2008) closer to 4.0% by 2010.<br />

Some of this increase will be attributable to more rental<br />

units being supplied. Industry observers will note that we<br />

are more pessimistic than CMHC in our outlook. Much of<br />

the difference is simply due to our more dour view as to<br />

the underlying economic forecasts for <strong>2009</strong>-10. F<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

13


Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

Using a “Negotiation First” Approach to Protect<br />

Landlords from Bad Debts<br />

Suite By Mike Chopowick Collections Canada Inc. (Suite Collections)<br />

is one of the only collections agencies in<br />

Canada devoted entirely to the collections of<br />

residential debts, with a combined experience<br />

of over 20 years in rent collections for both current and<br />

past residents.<br />

The company founder's vision that led to the creation of<br />

Suite Collections was borne out of frustration at his inability<br />

to find a collection agency that would properly focus on<br />

the small balances normally found in the residential industry.<br />

Suite Collection’s primary function and objective is to<br />

collect all delinquent debt resulting from a residential<br />

tenancy. Suite Collections is governed under the Ontario<br />

Ministry of Services Consumer Protection Branch. The<br />

team is made up of over ten licensed Collection Officers and<br />

three licensed Paralegals.<br />

Surana Baptise (2nd person, front row),<br />

manages the team at Suite Collections.<br />

The team is lead by Surana Baptiste (Legal and Collections<br />

Manager), a licensed Paralegal with the Law Society of Upper<br />

Canada. She has been representing landlords at the Landlord<br />

and Tenant Board (LTB) and Small Claims Court for over 5<br />

years. She currently oversees the Legal and Collections department<br />

including the day-to-day collections of the receivables.<br />

She has been with Suite Collections for over five years.<br />

<strong>FE</strong> <strong>Magazine</strong> met with Surana to learn first-hand a bit more<br />

about the rent collection business. As most landlords know,<br />

rent collection can be a challenging part of their business.<br />

Owning a rental housing property means constantly ensuring<br />

that operating expenses for utilities, property taxes,<br />

mortgage payments, staffing, maintenance and others are<br />

paid on time. It is only fair and necessary that tenants make<br />

on-time rent payments. Unfortunately, not only do some<br />

tenants pay the rent late, sometimes they don’t pay at all. As<br />

14


<strong>FE</strong> learned, however, it is reassuring that our industry has<br />

people like Surana Baptiste on their side.<br />

After meeting Surana, it is clear she sincerely understands and<br />

shares the frustration of seeing dedicated, hard-working landlords<br />

being taken advantage of by ‘professional’ tenants. Surana<br />

knows that these professional tenants can use Ontario’s residential<br />

tenancy laws to their advantage, and work the system to<br />

avoid eviction and live rent free for up to a year. Recovering<br />

funds that belong to the landlord can be difficult, and Surana is<br />

more than happy to help them collect any amount that is owed.<br />

Surana strongly believes that educating landlords on the<br />

importance of accurate record keeping and having a clear<br />

rent collection policy in place is essential to keep the current<br />

accounts receivables to its minimum and makes it easier to<br />

recover delinquent accounts.<br />

Suite Collection’s goal is to collect 100% of unpaid rent<br />

from both current and past tenants and, if necessary, evict<br />

all non-paying tenants as quickly as possible. To learn a bit<br />

more about the rent collection business, <strong>FE</strong> <strong>Magazine</strong><br />

visited Surana Baptiste at her office and discussed some of<br />

the common questions landlords have.<br />

<strong>FE</strong>: How does the process of collecting late rent start<br />

Surana: We start the eviction process on the 3rd of every month<br />

(or the next business day after) by serving a Form N4 (<strong>No</strong>tice to<br />

Terminate Early for <strong>No</strong>n-Payment of Rent) a legal notice of the<br />

Landlord Tenant Board (LTB). If the tenant fails to comply with<br />

the notice by making the payment owed on or before the termination<br />

date stated on the N4, an L1 Application is filed within 5<br />

days of the termination. This generates a hearing and results in<br />

an eviction order.<br />

The timing of this process is very crucial as it could determine<br />

how high receivables will be if the file goes to eviction<br />

stage. Keep in mind that the eviction process with the<br />

Landlord Tenant Board can take about three to four months<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

15


to get a non-paying tenant out of your unit. This is generally<br />

the case without any delays at court. If your tenant’s rent is<br />

$1000, per month then you are looking at a loss of $3000 to<br />

$4000, on that unit.<br />

<strong>FE</strong>: What is the biggest challenge in the rent collection business<br />

right now<br />

Surana: One that really gets me going is the tenant’s ability<br />

to raise maintenance issues in a landlord’s application for<br />

termination due to non-payment of rent. This change came<br />

in effect on January 31 st , 2007, when the Residential Tenancy<br />

Act was proclaimed. Your termination request of the tenancy<br />

can be needlessly delayed or denied if the tenant raises any<br />

issues that the Board views as being a breach of the<br />

Landlord’s obligations.<br />

<strong>FE</strong>: How can landlords protect themselves being a victim<br />

of “trail by ambush”<br />

Surana: I encourage landlords to conduct a suite inspection<br />

on all the tenants that are going to court for nonpayment<br />

of rent. This allows the agent to be better<br />

prepared and have the maintenance issues looked after<br />

before the hearing. We realize that this process could be<br />

time consuming and recommend that it be done during<br />

an annual suite inspection.<br />

Remember, some of you have what I like to call “professional<br />

tenants”. Believe me they know how to get your money… If<br />

you are not careful you could end up spending a lot of money.<br />

<strong>FE</strong>: What can I do as landlord to prevent this<br />

Surana: Document… Document… Document. My friends,<br />

these tenants are beating us with “paper”. Remember, “if it’s<br />

not in writing, it didn’t happen”.<br />

Surana: Suite Collections takes pride in our ability to<br />

report to Equifax (a credit-reporting organization), on<br />

behalf of our clients, all unpaid rent. As a registered<br />

Collection Agency, we can immediately register a past<br />

tenant’s debt with Equifax without having a judgment,<br />

which is the first step in encouraging them to settle their<br />

bad debt.<br />

This also gives other landlords an insight of the prospective<br />

tenant’s previous rental history. Let’s face it, I’m sure<br />

you or someone you know had or have a tenant that is<br />

delinquent in his rental payments and found out later<br />

that he did the same thing to another landlord.<br />

If a debt (without a judgment) is reported against ones credit,<br />

it reduces the credit score and stays on bureau for 6 years. If<br />

the debt is paid, Suite Collections will advise Equifax, who<br />

will update the status of the creditor report to reflect that it is<br />

paid. If a judgment is reported against ones credit, it stays on<br />

for up to 10 years, thus hindering a consumer’s credit worthiness<br />

and the ability to obtain credit.<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

Any time you receive a letter from a tenant, don’t call!<br />

Respond in writing. Address all the maintenance issues in a<br />

timely manner and document it all. By doing so, the Agent<br />

appearing before the Board will have a better case to put<br />

forth and reduce the risk of the tenant getting an abatement<br />

of rent or getting the eviction delayed or denied.<br />

<strong>FE</strong>: What actions are taken against tenants who do not pay<br />

their rent<br />

<strong>FE</strong>: Why is it important to require tenants to provide<br />

a guarantor<br />

Surana: Having a guarantor in a better economic position will<br />

give you a better chance to recover money should the tenant<br />

default in the rental payment. Often your guarantors will have<br />

excellent credit and will do everything to sustain it. The more<br />

leaseholders and guarantors you can get, the better, it means<br />

the more people we can hold responsible.<br />

16


<strong>FE</strong>: Many landlords view eviction as a last resort, and believe<br />

if they have a responsible, friendly tenant, it’s okay to give<br />

them a break if their rent is late. Why is it so important to<br />

always issue an N4 notice as soon as the rent is late no matter<br />

what the situation<br />

Surana: Your collections policy should be for everyone. <strong>No</strong><br />

exceptions. Bad things happen to good people, but at the<br />

end of the day you have bills to pay. Your procedure should<br />

never be altered for different tenants, I am of the belief that<br />

any agreement must be made at the LTB. In the event of a<br />

breach, the landlord will have a recourse for terminations as<br />

the process would have already been started.<br />

<strong>FE</strong>: What skills or experience do you like to see in your collections<br />

staff<br />

Surana: Past experience is always an asset for our collections<br />

staff. They have to know how to do the digging that is<br />

Landlords should have a clearly written rent collection<br />

policy that explains expectations regarding rent, and also<br />

ensure it is enforced. For further information or to download<br />

a sample rent collection policy and other helpful<br />

documents, please visit www.suitecollections.com.<br />

necessary to track down tenants who skipped out, and have<br />

strong negotiation skills. It also takes a range of personalities<br />

– sometimes we have to be tough with defaulters, but<br />

other times it takes a softer personality to ensure the tenant<br />

pays rent that is owed.<br />

<strong>FE</strong>: What is the minimum about of money that is owed<br />

before you will take on a landlord’s case<br />

Surana: There is no minimum. We will help landlords collect<br />

any amount of money, and have even taken on cases to collect<br />

the $150 application fee (now $170) from a tenant for one of<br />

our clients. I understand that collecting rent that is owed is<br />

not always just about the money, it is about upholding the<br />

principle that a tenant should honour the terms of their lease<br />

agreement, including paying the rent on time.<br />

<strong>FE</strong>: How is it possible to collect rent arrears from tenants<br />

who have moved out<br />

Surana: This process begins with the information you collected<br />

at the beginning of the tenancy, at the application<br />

stage. However, we have excellent "Skip Tracers" on the team.<br />

In some cases we do not have to go looking for them, they<br />

find us... this is because of our Equifax reporting, and debtors<br />

wanting more credit to a purchase home, car, or cell phone.<br />

<strong>FE</strong>: What if the landlord has no idea where the tenant went<br />

Surana: We locate 95% of the debtors. This is especially the case<br />

in residential debt collections, often the debts are no longer<br />

residing at the address where the money is owed. Our Skip<br />

Tracers utilize all resources available to them to locate debtors.<br />

<strong>FE</strong>: What do you find most rewarding about your work<br />

Surana: There are so many stages in our operation that lead<br />

to a successful end result and every stage is crucial and must<br />

be carried out effectively. My reward comes when I find ways<br />

to beat the day-to-day challenges and obstacles we are faced<br />

with in this industry and in our judicial system. I really enjoy<br />

and am very passionate about educating landlords. When<br />

that knowledge is put into practice and I'm able to collect the<br />

unpaid rent, keeping the receivables to a minimum for my<br />

clients, my work is done. All of this is possible with the great<br />

team that I have, who share the same vision that will help me<br />

achieve that goal. F<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

17


Delays Threaten Effectiveness of Board<br />

By Harry Fine<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

Disclaimer: This article is written for informational<br />

purposes only and should not be relied upon as legal<br />

advice. In each case, specific advice should be obtained<br />

which will be responsive to the circumstances of the individual<br />

requiring it.<br />

You’ve all heard the expression “Justice delayed is<br />

justice denied”. While a cliché, it’s true in most<br />

instances. Delays in getting to Court or having a<br />

decision rendered cause unfairness including:<br />

• <strong>No</strong>t having important interim decisions made that<br />

preserve the status quo<br />

• Having evidence become stale as people move on or<br />

their memories fade<br />

• Having issues become moot, as they resolve themselves,<br />

not always correctly<br />

• Increasing prejudice to one party, such as a landlord<br />

where rent arrears mount<br />

• Danger to the landlord and other tenants if dangerous<br />

and unsafe activity continues<br />

The Landlord and Tenant Board’s predecessor, the Ontario<br />

Rental Housing Tribunal, was borne out of the civil justice<br />

review process which sought to streamline the courts and<br />

remove backlogs. It was believed that administrative tribunals<br />

could be used to resolve landlord and tenant issues<br />

in a manner that was less expensive, more accessible and<br />

faster, while not reducing fairness.<br />

Conduct applications, and my practice is top-heavy with<br />

conduct claims, take the brunt of the delay, as do tenant<br />

applications. These matters are held to the end of the<br />

hearing block, rightly so, but as often as not if the matter<br />

doesn’t settle on the courthouse steps, an adjournment is<br />

required. The legal aid certificate system seems designed to<br />

encourage long trials with multiple appearances. The<br />

Board’s over-sensitivity about ordering costs against<br />

tenants, sends the message that delay with no downside is<br />

the answer for those wishing to remain housed.<br />

It’s ironic that Board Members are working harder than ever<br />

and doing more hearings than in the past. Yet Board<br />

18


Members unwittingly encourage delay and protracted proceedings<br />

by:<br />

• <strong>No</strong>t granting costs against those who bring frivolous<br />

claims or who don’t present their case with some level<br />

of efficiency<br />

• Granting just about every adjournment request by a<br />

tenant which on conduct applications, leaves a gaping<br />

hole of an hour or more that could have been used to<br />

resolve the matter, but instead goes unused<br />

• Asking tenants in front of them who have entered into<br />

a consent order with the landlord “are you sure you<br />

agree to this”, and “are you sure you don’t want to see<br />

duty counsel”. This practice which is quite common<br />

destroys large numbers of agreements negotiated in<br />

good faith, and puts complex cases back into the<br />

hearing block<br />

• Taking disputes that are meant to be summary<br />

matters with simple issues, and allowing agents and<br />

counsel to turn them into inquiries unrelated to the<br />

central issues at trial<br />

But there are lots of factors other than adjudicative practices<br />

that produce backlogs. These include:<br />

• The growing knowledge among tenants of s.82, that is,<br />

their ability to raise any issue at a hearing, without<br />

notice to the landlord, that they might have otherwise<br />

raised in an application filed ahead of time.<br />

• The growth of the Tenant Duty Counsel program,<br />

funded by Legal Aid Ontario, which provides advice<br />

for tenants, but not landlords, and at times, staffs three<br />

lawyers concurrently at the Toronto South office. This<br />

delays matters immeasurably, similar to the way the<br />

criminal defense bar has increased costs and delays in<br />

the Courts.<br />

• The growth of the legal clinic system in Ontario,<br />

which seems to have evolved over the years from<br />

giving summary advice to a system whereby tenants<br />

get full-blown representation, generally resulting in<br />

long trials<br />

• The excellent Board call centre and online documents,<br />

together with a web-savvy population of<br />

tenants, that provide information on delay and<br />

defense to landlord claims.<br />

• Ontario’s growing population<br />

• The current recession which may evolve into a depression,<br />

resulting in high unemployment numbers. If you<br />

are unemployed, then the unemployment rate for you<br />

is 100%, and most people are just a paycheck or two<br />

from eviction.<br />

• An increasingly complex statutory regime, which<br />

results in greater complexity in decision-making<br />

• Decisions from the appeal courts that create windfalls<br />

for tenants who are in the know.<br />

Whatever its causes, the Ministry needs to put more<br />

resources into the Board both for administration and adjudication.<br />

The Board needs more hearing rooms and more<br />

adjudicators. Yet, with the recession and the government’s<br />

funding freezes across the ministries, there is actually talk of<br />

a reduction in the number of members, confirmed to this<br />

writer by the Chair.<br />

In addition to more Board Members, other solutions<br />

might include:<br />

• More Member training on expeditiously handling files,<br />

adjournments and interim orders for payment<br />

• One central Toronto hearing location, instead of 3, in<br />

which resources could be used more effectively<br />

• A motions process to resolve pre-hearing issues, directions<br />

for disclosure and perhaps for summary dismissals<br />

on motions to quash<br />

• Costs imposed more frequently and even-handedly<br />

when appropriate<br />

• A change to the Boards Rules regarding disclosure, so<br />

that parties come to hearings prepared and don’t need<br />

to seek adjournments<br />

• A legislative change to s.82, scrapping it and requiring<br />

tenants to file applications, serve and disclose prior to<br />

the hearing of the landlord’s application, or at very<br />

least a requirement for notice and disclosure prior to<br />

the hearing<br />

• A close examination of LAO funding, with the goal of<br />

determining if both legal clinics and the Tenant Duty<br />

Counsel program are required<br />

So when my brethren legal representatives send you<br />

notice of a hearing date 6 weeks off, don’t shoot the messenger.<br />

The only effective course of action is to write the<br />

Premier, the Ombudsman and the Chair telling them that<br />

the current wait times and delays in the system just won’t<br />

do. F<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

19


By Ted Tsiakopoulos, Regional Economist, Canada Mortgage and Housing Corporation<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

For a fourth consecutive year Ontario rental apartment<br />

vacancy rates edged lower, moving to a level<br />

not seen since 2002, according to Canada<br />

Mortgage and Housing Corporation’s annual<br />

Rental <strong>Mar</strong>ket Survey.<br />

The vacancy rates for Ontario’s private-sector rental housing<br />

declined to 2.7 percent in 2008, down from 3.3 percent in<br />

Vacancy Rates % , 3+ Apartment Units (overall)<br />

Vacancy Rates %<br />

Vacancy Rates %<br />

14<br />

12<br />

10<br />

8<br />

6<br />

4<br />

2<br />

0 Barrie Brantford Greater<br />

Sudbury<br />

Ontario Vacancy Rates<br />

Guelph<br />

Hamilton Kingston Kitchener London Oshawa Ottawa-<br />

Gatineau<br />

2007. Average two-bedroom apartment rents rose 1.9<br />

percent in 2008, up from 1.6 percent the previous year.<br />

Increased demand continued to exert downward pressure on<br />

vacancy rates. Two factors were especially important. First,<br />

according to CMHC’s Home Purchase and Renovation<br />

Survey, fewer renter households have been in the market<br />

planning a home purchase in recent years and this story was<br />

2007<br />

2008<br />

Peterborough<br />

St. Catherines Thunder<br />

Niagara Bay<br />

4.5<br />

4.0<br />

3.5<br />

3.0<br />

2.5<br />

2.0<br />

1.5<br />

1.0<br />

0.5<br />

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008<br />

Toronto<br />

Windsor<br />

20


supported by lower ownership sales through 2008. And<br />

second, continued increased immigration into Ontario<br />

fuelled demand.<br />

On the supply side, fewer purpose-built rental apartments<br />

reached the completion stage in 2008. This helped sustain<br />

demand for existing purpose-built rental accommodation<br />

and limited any competitive headwinds for the existing<br />

rental stock.<br />

While vacancy rates dropped across all bedroom types, the<br />

drop was more pronounced for two and three bedroom<br />

apartment units. Despite recent declines, provincial<br />

vacancy rates still remain above averages posted in the past<br />

couple of decades.<br />

Thunder Bay and Windsor represent two regions that appear<br />

to be moving in opposite directions. While both economies<br />

have traditionally been tied to single economic sectors – for<br />

Thunder Bay, forest products, and for Windsor, the auto<br />

sector – Thunder Bay has been more successful in diversifying<br />

its economy, and has posted job gains. Partly as a result,<br />

Thunder Bay’s vacancy rate dropped from 3.8 percent to 2.2<br />

percent, while Windsor saw a climb from 12.8 percent to<br />

14.6 percent, by far the highest in the province. Sudbury<br />

continued to lead the province with the lowest vacancy rate,<br />

0.7 percent.<br />

In <strong>2009</strong>, the outlook is for declining vacancy rates, although<br />

the decline will be tempered by an increase in supply and a<br />

slowing job market due to weak economic conditions.<br />

The Rise and Fall of Vacancy Rates and Rents in<br />

Provincial Census Metropolitan Areas (CMAs)<br />

Barrie<br />

(↑ Vacancy rate increases; ↑ rents increase)<br />

Barrie’s vacancy rate for private apartments with at least<br />

three units increased to 3.5 percent from 3.2 percent in<br />

2007. The average two-bedroom rents for rental structures*<br />

in Barrie grew by 4.7 percent. After a sustained<br />

period of growth, employment in Barrie is starting to<br />

decline and this, combined with less migration of newcomers<br />

into Barrie and lower full-time youth employment,<br />

has led to increased vacancies.<br />

Hamilton and Brantford<br />

(Hamilton: ↓ vacancy rates decrease; ↑ rents increase;<br />

Brantford: ↓ vacancy rates decrease; ↑ rents increase)<br />

The apartment vacancy rate fell to 3.2 percent and 2.4<br />

percent in Hamilton and Brantford respectively, compared<br />

to a year ago. Two-bedroom rents were up 1.5 percent in<br />

Hamilton and 2.7 percent in Brantford. Home sales in both<br />

Hamilton and Brantford fell this year from the record level<br />

of 2007, as greater economic uncertainty prompted many<br />

would-be first-time buyers to delay purchases and remain<br />

in the rental market.<br />

Kingston<br />

(↓ Vacancy rate decreases; ↑ rents increase)<br />

Kingston’s vacancy rate for apartment buildings with at<br />

least three units dropped from 3.2 percent in 2007 to 1.3<br />

percent in 2008. As a result the vacancy rate is now at its<br />

lowest level since 2002, when the rate was 0.9 percent. The<br />

weaker local economy in Kingston has slowed the movement<br />

of renters into the home ownership market. In fact,<br />

healthy job growth in the lower-paying service employment<br />

sector helped support demand for less expensive rental<br />

accommodation. There was no new rental construction in<br />

Kingston this year.<br />

Kitchener and Guelph<br />

(Kitchener: ↓ vacancy rate decreases; ↓ rent growth<br />

decreases); (Guelph: ↑ vacancy rate increases; ↔ rents<br />

unchanged)<br />

Demand for rental apartments in the Kitchener and Guelph<br />

CMAs moved in opposite directions, with Kitchener experiencing<br />

a decrease to 1.8 percent, and Guelph’s moving<br />

higher to 2.3 percent. Demographic and economic factors<br />

contributed to the changes. In both CMAs these factors<br />

include a younger population, strong immigration, steady<br />

employment growth and less movement of renters to home<br />

ownership. Rents in Kitchener for a two bedroom apartment<br />

were up 0.9 percent, and in Guelph, 1.6 percent.<br />

London<br />

(↑ Vacancy rate increases; ↓ rent growth decreases)<br />

London’s vacancy rate for private rental apartments with at least<br />

three units increased to 3.9 percent in 2008. The average twobedroom<br />

rent in the London CMA rose by 1.2 percent. Fewer<br />

renters moved into home ownership, but some empty-nesters and<br />

* Fixed sample average apartment rent increase: this is a measure that estimates the average rent on structures that were common to the survey sample for both the 2007 and<br />

2008 CMHC Rental <strong>Mar</strong>ket Surveys.<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

21


<strong>FRPO</strong> members attended the CMHC Rental <strong>Mar</strong>ket Outlook Seminar in Toronto on January 29, <strong>2009</strong><br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

professionals chose to live in higher-end rental apartments. There<br />

was a steady stream of new supply throughout the year. A high level<br />

of youth employment and positive migration also added to<br />

demand. These trends ensured that demand was sufficient to<br />

absorb the new supply throughout the year.<br />

Ottawa<br />

(↓ Vacancy rate decreases;↑ rents increase)<br />

Ottawa’s vacancy rate fell to 1.4 percent, the lowest level<br />

since 2001. Robust rental demand pushed up average rents<br />

by 3.7 percent, higher than the rate of inflation. Rental<br />

demand during 2008 was sustained by a stable economy<br />

with factors such as strong young adult employment<br />

growth, rising costs of home ownership and high migration<br />

levels. Ottawa has one of the highest average incomes<br />

among Canada’s major cities, however record-high prices<br />

and growing economic uncertainty led to dampened<br />

demand for home ownership.<br />

Peterborough<br />

(↓ Vacancy rate decreased; ↓ rent growth decreases)<br />

After remaining unchanged for three years at 2.8 percent,<br />

the overall vacancy rate fell to 2.4 percent in 2008. The<br />

decline was due to an increase in demand fuelled by a<br />

decrease in demand for home ownership, resulting from<br />

price increases, and some moderation in the labour market,<br />

particularly for youth. Owning has become less attractive,<br />

even for families with children. Average two-bedroom<br />

apartment rents rose by 2.0 percent.<br />

St. Catharines-Niagara<br />

(↑ Vacancy rate increases; ↑ rents increase)<br />

In the St. Catharines-Niagara CMA, the vacancy rate for<br />

private rental apartment buildings with at least three units<br />

edged up to 4.3 percent from 4.0 percent in 2007. The rate is<br />

above national and provincial averages. Demographic and economic<br />

factors are the main drivers of rental demand, and<br />

Niagara’s population has been declining since 2004. A strong<br />

labour market supported the movement of renters into home<br />

ownership, but at a slower pace than in the past. Rents for twobedroom<br />

apartments rose by 2.1 percent.<br />

Sudbury<br />

(↑ Vacancy rate increases; ↓ rent growth decreases)<br />

For the first time in nine years the vacancy rate in Greater<br />

Sudbury increased, albeit slightly, from 0.6 percent to 0.7<br />

percent in 2008. It is still the lowest in Ontario among 15<br />

centres with population over 100,000. A strong mining<br />

sector continues to boost rental demand. Migration continues<br />

into the region, attracted by jobs, post-secondary<br />

education opportunities and retirement living. With home<br />

resale prices doubling since 1999, some in-migrants have<br />

chosen rental over home ownership in the short term.<br />

Rents for two-bedroom apartments rose 5.6 percent.<br />

22


Thunder Bay<br />

(↓ Vacancy rate decreases; ↓ rent growth decreases)<br />

The vacancy rate dipped by more than one percentage point<br />

to 2.2 percent in 2008, down from 3.8 percent in 2007, now<br />

matching the average vacancy rate among centres in Canada<br />

with populations over 100,000. Job gains for younger adults<br />

helped increase demand in the rental market. Despite difficult<br />

conditions in the forest products industry and related<br />

services, the broader service sector has shown remarkable<br />

resilience. A good percentage of service sector workers are<br />

renters. Rents for two bedroom apartments rose 1.3 percent.<br />

Greater Toronto Area<br />

(↓ Vacancy rate decrease; ↑ rents increase)<br />

The Greater Toronto Area average vacancy rate declined to<br />

2.1 percent in 2008, compared to 3.2 percent in the previous<br />

year. Rents for two-bedroom apartments rose 1.7 percent.<br />

Uncertain economic conditions tempered home ownership<br />

among potential first-time buyers, dampening the outflow of<br />

rental households into home ownership. In addition, some<br />

potential first-time buyers had to put their decision on hold<br />

because of higher home prices. Even the relatively less expensive<br />

condominium apartment market segment has become<br />

less accessible in some parts of the Greater Toronto Area.<br />

In Oshawa, vacancy rates rose to 4.2 percent from 3.7<br />

percent a year earlier, and rents rose moderately by 1.2<br />

percent. Durham Region in general experienced a softening<br />

in rental market conditions with rising vacancy rates.<br />

Home ownership is in greater competition with rental in<br />

many parts of Durham.<br />

Windsor<br />

(↑ Vacancy rate increases; ↔ rents unchanged)<br />

The already-high vacancy rate in Windsor reached 14.6<br />

percent as demand waned, a reflection of the economic situation<br />

in the area. Windsor’s unemployment rate has been<br />

well above the provincial average over the last four years. In<br />

2008, unemployment exceeded 10% in some months.<br />

Unemployment among young people has led to a growing<br />

trend for young adults to stay in the parental home longer,<br />

and not enter the rental market. Although home prices are<br />

declining, fewer renters are choosing to enter the home<br />

market because of employment conditions.<br />

CMHC conducts the Rental <strong>Mar</strong>ket Survey every year<br />

in <strong>Apr</strong>il and October to determine the latest trends in<br />

the rental market. The next report will be released in<br />

June. F<br />

For the complete 2008 CMHC Rental <strong>Mar</strong>ket Survey, please visit<br />

www.cmhc.ca. For more information on CMHC’s rental housing mortgage<br />

loan insurance products, contact Vito Campisi, Ontario Regional Manager,<br />

Underwriting, CMHC, at vcampisi@cmhc.ca or 416-218-3430.<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

23


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carlos@solidgc.ca<br />

www.solidgc.ca<br />

Renovations • Capital Projects • Disaster Restoration • Building Maintenance • Landscaping


By Krista R. Chaytor<br />

“Bankruptcy” is commonly<br />

used to describe a number<br />

of legal situations involving<br />

a tenant’s financial distress.<br />

But with the rights and<br />

obligations of landlords<br />

and tenants determined by<br />

the true course of action<br />

taken, it pays for both sides<br />

to get the facts.<br />

continued...<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

25


Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

It’s a common<br />

situation. A<br />

tenant is in<br />

financial distress<br />

and a<br />

Krista R. Chaytor<br />

number of terms –<br />

receiver, trustee, bankruptcy – get bantered<br />

about, with questions about legal<br />

obligations cropping up. Can the landlord<br />

terminate the lease or collect rent<br />

arrears Is the tenant still responsible<br />

for making rent payments Can the<br />

tenant assign or repudiate the lease<br />

While the term “bankrupt” is often<br />

used generically to describe a number<br />

of legal situations involving a tenant,<br />

the rights and obligations of landlords<br />

and tenants are anything but generic in<br />

each situation. Here’s how different<br />

courses of action in dealing with a<br />

tenant’s financial difficulties can affect<br />

the rights and obligations of each party.<br />

Privately Appointed Receiver<br />

If a tenant defaults on a loan or security<br />

agreement, a secured creditor may<br />

have the option of appointing a receiver<br />

based on the terms of the loan or security<br />

agreement. In general, the receiver<br />

steps into the shoes of the tenant and is<br />

subject to the same obligations. If the<br />

receiver takes possession of the leased<br />

premises, it is responsible for paying<br />

rent and has no greater rights than the<br />

tenant under the lease. Unless a landlord<br />

has signed an agreement giving<br />

special rights to the privately appointed<br />

receiver, they maintain all rights and<br />

obligations set out in the lease.<br />

Court Appointed Receiver<br />

If a court appoints a receiver, the court<br />

order will set out the receiver’s powers.<br />

Typically, the receiver takes control of<br />

the tenant’s assets and the landlord is<br />

prohibited from terminating the lease<br />

or interfering with the receiver’s right<br />

to possession of the premises without<br />

a court order. The receiver must pay<br />

rent at the rate set out in the lease, and<br />

the court order may allow the receiver<br />

to assign or abandon the lease. The<br />

landlord is generally prohibited from<br />

seizing goods to cover rent arrears<br />

without obtaining a court order.<br />

Interim Receiver Under the<br />

Bankruptcy and Insolvency Act<br />

(“BIA”)<br />

To preserve a tenant’s assets after they<br />

have filed for bankruptcy, a court will<br />

appoint an interim receiver before the<br />

petition for bankruptcy is actually<br />

heard. Usually, the interim receiver<br />

acts as a monitor and the tenant continues<br />

to operate its business. The<br />

tenant must continue paying rent and<br />

comply with the terms of the lease.<br />

However, the landlord will likely be<br />

prohibited from terminating the lease<br />

or otherwise exercising its remedies,<br />

including the right to seize assets for<br />

non-payment of rent, unless it first<br />

obtains a court order.<br />

Trustee in Bankruptcy<br />

When a tenant’s bankruptcy petition<br />

is successful and a bankruptcy order is<br />

issued, the trustee’s role is to help in<br />

the orderly administration of the<br />

estate. The trustee has the right to<br />

occupy the leased premises (and must<br />

continue paying rent) for three<br />

months after the tenant’s bankruptcy<br />

and can choose to retain, disclaim or<br />

in some circumstances assign the<br />

lease. The trustee’s conduct is not governed<br />

by the terms of the lease as the<br />

trustee is entitled to take whatever<br />

steps are necessary for the orderly<br />

administration of the estate. The landlord<br />

cannot terminate the lease during<br />

this three-month period or seize a<br />

tenant’s assets. Once a bankruptcy<br />

order is issued, however, the landlord<br />

has a preferred claim for 3 months<br />

arrears and 3 months accelerated rent.<br />

BIA Proposal<br />

The BIA provides a system under<br />

which a tenant can restructure its<br />

business, make a deal with creditors to<br />

accept a percentage of the debts owing<br />

to them and continue in business.<br />

While the tenant is restructuring, a<br />

landlord can’t interfere with the<br />

tenant’s occupancy of the premises,<br />

take any steps to collect arrears, or terminate<br />

the lease without an order<br />

from the court. However, the tenant<br />

must continue to pay rent and is<br />

required to comply with the terms of<br />

the lease. At any time between the<br />

filing of the notice of proposal and the<br />

filing of the proposal itself, a tenant<br />

can disclaim the lease by giving the<br />

landlord 30 days’ notice. The BIA contains<br />

a procedure allowing the landlord<br />

to challenge the disclaimer.<br />

CCCA Proposal<br />

Under the Companies Creditors<br />

Arrangement Act, a tenant can also<br />

restructure and continue in business<br />

based on a court order, with rights and<br />

obligations similar to a BIA proposal. The<br />

court order frequently requires tenants to<br />

comply with the terms of use contained<br />

in the lease. The landlord cannot take<br />

steps to collect arrears, but arrears payments<br />

are usually dealt with as part of the<br />

proposal to creditors. Court orders frequently<br />

allow the tenant to abandon, disclaim<br />

or assign the lease, and provide that<br />

any resulting damages to the landlord be<br />

dealt with in the proposal. F<br />

Krista R. Chaytor is a Partner<br />

at WeirFoulds LLP in Toronto<br />

26


Ontario’s Average 2.7% Vacancy Rate Masks<br />

Differences Across the Rent Spectrum<br />

By Mike Chopowick<br />

In December 2008, the Canada Mortgage and Housing<br />

Corporation announced that Ontario’s average private<br />

apartment vacancy rate was 2.7%.<br />

Unfortunately, this tells us little about true market conditions<br />

across the Province. It does not mean that every landlord<br />

has just under 3 vacancies for every 100 units, nor does<br />

it tell us that each major city has a 2.7% vacancy rate. Even<br />

a superficial review of CMHC’s reports reveal a wide range<br />

of market conditions across the province, with vacancy<br />

rates varying by city, by building size, unit size and even<br />

building age.<br />

One pattern we typically see in vacancy rates is the negative<br />

correlation between monthly rent and average vacancy rate.<br />

The common relationship is that the lower the rent, the<br />

Vacancy Rate %<br />

8.0%<br />

7.0%<br />

6.0%<br />

5.0%<br />

4.0%<br />

3.0%<br />

2.0%<br />

1.0%<br />

0.0%<br />

Apartment Vacancy Rate by Rent Range<br />

(Hamilton)<br />

< $500<br />

$500 - $599<br />

$600 - $699<br />

$700 - $799<br />

$800 - $899<br />

$900 +<br />

Monthly Rent Range<br />

Source for all charts: CMHC Rental <strong>Mar</strong>ket Reports for Major Centres, December 2008<br />

Vacancy Rate %<br />

2.0%<br />

1.8%<br />

1.6%<br />

1.4%<br />

1.2%<br />

1.0%<br />

0.8%<br />

0.6%<br />

0.4%<br />

0.2%<br />

0.0%<br />

Apartment Vacancy Rate by Rent Range<br />

(Kingston)<br />

$400 - $599<br />

$600 - $799<br />

$800 - $999<br />

$1000 - $1199<br />

Monthly Rent Range<br />

$1200 +<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

27


Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

higher the vacancy. Understanding this relationship is<br />

important for apartment investors. It also has important<br />

public policy implications as it helps governments better<br />

understand the extent of rental housing supply and availability<br />

for Ontario’s lower income households.<br />

<strong>FRPO</strong> conducted an analysis of average rents and vacancy<br />

rates in eight major Ontario markets based on October 2008<br />

CMHC data. While the results provide only a basic review of<br />

the data, it is evident that there is a persistent pattern of higher<br />

vacancies in the most affordable end of the rental market.<br />

The results demonstrated that:<br />

• All 8 major markets studied had higher vacancy rates<br />

for the most affordable range of monthly rents compared<br />

to the most expensive monthly rent ranges<br />

• 6 of 8 markets had the highest vacancy rates within the<br />

two lowest monthly rent ranges<br />

• 7 of 8 markets had the lowest vacancy rates within the<br />

highest monthly rent range<br />

"Choice and quality across Ontario’s rental market has<br />

improved dramatically since vacancy decontrol was<br />

introduced in the late 1990’s."<br />

With higher than average vacancy rates seen in the lowest<br />

ranges of monthly rents, especially below $600 to $700 per<br />

month, the results seem to debunk any myth that there is a<br />

shortage of rental housing for lower income households in<br />

Ontario. For some, the relationship between rents and<br />

vacancies is counterintuitive: many would expect lower<br />

priced rental units to be snapped up as higher priced rental<br />

units experience more availability. The pattern we do see, of<br />

vacancies decreasing as monthly rents increase, is actually<br />

very logical with several good explanations.<br />

One cause is related to the consistent pattern of renter<br />

households moving from lower-priced suites and into<br />

higher-priced rental units, and even into homeownership,<br />

as they become more affluent over time.<br />

“As the shift to homeownership accelerated at the turn of the<br />

new millenium, higher-end conventional rental units were<br />

competing with newly completed condo rentals.”, says Ted<br />

Tsiakopoulos, an economist with Canada Mortgage & Housing<br />

Corporation. Tsiakopoulos then adds, “Landlords were offer-<br />

Vacancy Rate %<br />

Vacancy Rate %<br />

Vacancy Rate %<br />

3.0%<br />

2.5%<br />

2.0%<br />

1.5%<br />

1.0%<br />

0.5%<br />

0.0%<br />

5.0%<br />

4.5%<br />

4.0%<br />

3.5%<br />

3.0%<br />

2.5%<br />

2.0%<br />

1.5%<br />

1.0%<br />

3.0%<br />

2.5%<br />

2.0%<br />

1.5%<br />

1.0%<br />

0.5%<br />

0.0%<br />

Apartment Vacancy Rate by Rent Range<br />

(Kitchener)<br />

< $600<br />

$600 - $699<br />

$700 - $799<br />

< $550<br />

$550 - $649<br />

$800 - $899<br />

Monthly Rent Range<br />

$650 - $799<br />

$900 - $999<br />

$800 - $999<br />

Monthly Rent Range<br />

$1000 +<br />

Apartment Vacancy Rate by Rent Range<br />

(London)<br />

< $700<br />

$700 - $799<br />

$800 - $899<br />

$900 - $999<br />

$1000 - $1249<br />

Apartment Vacancy Rate by Rent Range<br />

(Ottawa)<br />

Monthly Rent Range<br />

$1000 +<br />

28


Vacancy Rate %<br />

6.0%<br />

5.5%<br />

5.0%<br />

4.5%<br />

4.0%<br />

3.5%<br />

3.0%<br />

2.5%<br />

2.0%<br />

1.5%<br />

1.0%<br />

Apartment Vacancy Rate by Rent Range<br />

(St. Catherines - Niagara)<br />

< $550<br />

$500 - $599<br />

$600 - $699<br />

$700 - $799<br />

Monthly Rent Range<br />

$800 +<br />

ing significant incentives at the high end such that greater value<br />

was had if tenants traded up to units with superior amenities.<br />

As units at the high end became available for occupancy,<br />

tenants with above average incomes shifted out of less superior<br />

units, resulting in higher vacancy rates at lower rent ranges.”<br />

This shift created significantly more availability and vacancy<br />

in more affordable, lower-rent units across the province.<br />

For many things we purchase, consumers believe that ‘you<br />

get what you pay for’. This is becoming increasingly true for<br />

rental housing as well. Tenants are increasingly seeking out<br />

higher quality rental suites, and this is creating higher<br />

demand for higher priced units, and again more vacancy in<br />

lower-priced units.<br />

Vacancy Rate %<br />

Vacancy Rate %<br />

7.0%<br />

6.0%<br />

5.0%<br />

4.0%<br />

3.0%<br />

2.0%<br />

1.0%<br />

0.0%<br />

4.0%<br />

3.5%<br />

3.0%<br />

2.5%<br />

2.0%<br />

1.5%<br />

1.0%<br />

Apartment Vacancy Rate by Rent Range<br />

(Thunder Bay)<br />

< $400 - $499<br />

$500 - $599<br />

$600 - $699<br />

Apartment Vacancy Rate by Rent Range<br />

(Toronto)<br />

< $700<br />

$700 - $799<br />

$800 - $899<br />

$900 - $999<br />

$700 - $799<br />

Monthly Rent Range<br />

$1000 - $1099<br />

Monthly Rent Range<br />

$800 +<br />

$1100 +<br />

“Price is not the only factor people look at when renting an<br />

apartment, customer service is just as important as price”,<br />

says Bonnie Hoy, of Bonnie Hoy & Associates. “People will<br />

pay more to get better service which is more frequently seen<br />

in better communities with a little higher rents.”<br />

Another factor behind vacancy rates at the lower rent ranges<br />

is income levels and employment stability (or instability) of<br />

households with affordability challenges. These households<br />

may be more likely to move out to other housing arrangements<br />

if their jobs and incomes are at risk.<br />

“You see higher vacancy at the lower end of the market<br />

because lower income renters tend to rent these units”,<br />

explains Derek Lobo, of the DALA Group of Companies.<br />

“What you’ll find is that in a recession, and we’re just<br />

heading into a recession so this impact is just starting, is<br />

lower income renters tend to face greater risk of unemployment,<br />

and find they have to move either back home with<br />

family members otherwise double up in another dwelling.”<br />

Choice and quality across Ontario’s rental market has improved<br />

dramatically since vacancy-decontrol was introduced in the late<br />

1990’s. There is increased competition among landlords, and<br />

the differences in vacancy rates help illustrate how tenants are<br />

benefiting from the healthy market we now have.<br />

Whether due to tenants’ incomes, housing preferences or<br />

landlords’ investments in better quality, demand for highend<br />

units is creating more availability for affordable private<br />

sector rental housing. F<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

29


Associate Members<br />

2008 - <strong>2009</strong><br />

ADVERTISING AND PUBLISHING<br />

Lawlor & Company<br />

Mediapeach<br />

Metro Toronto<br />

Renters News<br />

Star Media Group<br />

Toronto Star<br />

APPLIANCES<br />

Coinamatic<br />

Harco Leasing Inc<br />

MABE Canada, GE Appliances<br />

Phelps Apartment Laundries Ltd.<br />

Sparkle Solution<br />

APPRAISERS<br />

Altus Group<br />

Altus Health Trust Canada<br />

Veritas Valuation Inc.<br />

ASSESSMENT AGENCY<br />

Municipal Property Assessment Corp.<br />

ASSET MANAGEMENT<br />

Institute of Housing Management<br />

Larma Management<br />

Mer Holdings Limited<br />

TMDL Property Management<br />

CABLE/SATELLITE/TELECOM<br />

Rogers Cablesystems Ltd.<br />

CONSULTING<br />

A-Team Strategies<br />

WP Osborne Executive Search<br />

ENERGY SERVICES<br />

Carma Industries<br />

ECNG Limited Partnership<br />

Enbridge Electrical Connections<br />

Enbridge Gas Distribution<br />

Enersource<br />

<strong>No</strong>vitherm Canada Inc.<br />

Stratacon Inc.<br />

Wyse Solutions<br />

ENVIRONMENTAL AND ENGINEERING<br />

CONSULTANTS; BUILDING ENVELOPE<br />

The C3 Group<br />

Efficiency Engineering Inc.<br />

Halsall Associates Limited<br />

Jacques Whitford Ltd.<br />

Mann Engineering Ltd<br />

<strong>Mar</strong>itime-Ontario Environmental Inc.<br />

FINANCES; REAL ESTATE/<br />

MORTGAGE SERVICES<br />

Canadian Mortgage Capital Corporation<br />

Canada Home Guide Inc.<br />

CMHC<br />

Cushman & Wakefield Lepage<br />

First National Financial Corp.<br />

HSBC Bank of Canada<br />

JCI Group<br />

Jenida Investments<br />

Morguard Investments Limited<br />

Murray & Company Limited<br />

Peoples Trust Company<br />

Scotiabank<br />

TD Canada Trust<br />

TD Securities<br />

Waters, Kathleen<br />

FIRE SA<strong>FE</strong>TY SERVICES<br />

Firepoint Technologies Inc.<br />

Mircom Technologies<br />

INSURANCE<br />

Dan Lawrie Insurance Brokers Ltd.<br />

LEASING PRO<strong>FE</strong>SSIONALS<br />

Bonnie Hoy and Associates<br />

DALA Group of Companies<br />

Renters News<br />

Sheryl Erenberg & Associates<br />

LEGAL SERVICES<br />

Aird & Berlis LLP<br />

Andrade Consulting Group Ltd.<br />

Blaney McMurtry LLP<br />

Cohen Highley LLP<br />

Debra Fine Barrister & Solicitor<br />

Dickie & Lyman Lawyers LLP<br />

Gardiner Roberts LLP<br />

Landlord Solution<br />

Sandler, Gordon Barristers & Solicitors<br />

SPAR Property Consultants Ltd<br />

MARKET ANALYSIS & RESEARCH<br />

Altus Group<br />

Veritas Valuation Inc.<br />

PROPERTY MAINTENANCE/<br />

CONSTRUCTION & REPAIR<br />

Advantage Bathtubs Refinishing<br />

Byng Group of Companies<br />

Certified Clean Air<br />

C.G. Maintenance<br />

Cordeiro Roofing Ltd.<br />

Cosmos Electrical Company<br />

DAJ Painting<br />

Gatemaster Inc.<br />

ICI Canada Inc.<br />

KONE Inc. Elevators<br />

Magical Pest Control Inc.<br />

Rona<br />

Servicemaster Commercial<br />

Soundivide Inc.<br />

The Home Depot Supply<br />

PROPERTY MANAGEMENT SOFTWARE<br />

Yardi Systems Inc.<br />

PROPERTY TAX CONSULTANTS<br />

Dickie & Lyman Lawyers LLP<br />

I.I. Nash Associates Limited<br />

SPAR Property Consultants Ltd<br />

REAL ESTATE<br />

CB Richard Ellis<br />

Colliers International<br />

Primecorp Commercial Realty Inc.<br />

Satco Realty Inc.<br />

Skyview Realty Ltd.<br />

Stonecap Realty Partners Inc.<br />

RENT CONTROL CONSULTANTS<br />

Applecreek Consultants Ltd.<br />

Andrade Consulting Group Ltd.<br />

Cohen Highley LLP<br />

Dickie & Lyman Lawyers LLP<br />

SPAR Property Consultants Ltd<br />

RENTAL HISTORY, TENANT<br />

AND CREDIT REPORTING<br />

Canadian Credit Protection Corp<br />

GateMaster Inc.<br />

Rent Check Credit Bureau<br />

TENANT SERVICES<br />

Coinamatic<br />

Phelps Apartment Laundries Ltd.<br />

Toronto Appliance Service Ltd.<br />

TRAINING AND EDUCATION<br />

York Communications/MMPI<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

30


By R. G. Doumani, Scot Stoll and Patrick Harrington, Aird & Berlis LLP, Barristers & Solicitors<br />

On February 23, <strong>2009</strong>,<br />

the Province of Ontario<br />

introduced Bill 150,<br />

being an Act to enact<br />

the Green Energy Act, <strong>2009</strong> and to<br />

build a green economy. The Bill<br />

received first reading on February<br />

23, <strong>2009</strong>, second reading between<br />

February 24 and <strong>Mar</strong>ch 11, <strong>2009</strong><br />

and is currently before the<br />

Standing Committee on General<br />

Government.<br />

This article examines Bill 150 from the<br />

perspective of landlords of rental residential<br />

property.<br />

Most of the practical details and effect of<br />

the Green Energy Act, <strong>2009</strong> await the<br />

preparation of regulations, so the comments<br />

in this article are subject to change.<br />

Despite its lofty purpose of energy<br />

conservation, Bill 150, which amends<br />

a number of statutes, is significant to<br />

landlords for what it does not do. It<br />

does not proclaim into force the smart<br />

metering provisions in Part VIII of the<br />

Residential Tenancies Act, 2006.<br />

In a stupefying move, just over a<br />

month after Bill 150 was given first<br />

reading, the Ontario Energy Board on<br />

<strong>Mar</strong>ch 24, <strong>2009</strong> issued Compliance<br />

Bulletin <strong>2009</strong>01 in which it took the<br />

position that the installation of smart<br />

meters in rental residential complexes<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

31


was unlawful because there was not a<br />

regulatory framework in place “to<br />

protect the interests of consumers”.<br />

There is no such framework in place<br />

because the Government has sat on<br />

proclaiming in force Part VIII<br />

Residential Tenancies Act, 2006 for<br />

twenty-seven months.<br />

Section 3 of Bill 150 permits Cabinet to<br />

designate goods, services and technologies<br />

that promote energy conservation. A<br />

person will be permitted to use such designated<br />

items “despite any restriction<br />

imposed at law that would otherwise<br />

prevent or restrict the use of” such designated<br />

goods, services and technologies. A<br />

question worth considering: If smart<br />

meters were to be designated under this<br />

section, would this provision override<br />

Part VIII of the Residential Tenancies Act,<br />

2006 (or, at a minimum, ameliorate some<br />

of Part VIII’s more problematic features)<br />

A considerable amount of press attention<br />

was given to the requirement of<br />

an energy audit on the sale of a home.<br />

However, landlords should be aware<br />

that the energy audit provisions of the<br />

proposed Act [subsection 2(1)] will<br />

apply to an offer to lease for a term in<br />

excess of a period to be prescribed by<br />

regulation. Consequently, it is possible<br />

that the energy audit requirements of<br />

the Green Energy Act, <strong>2009</strong> could be<br />

applied to the lease of rental units.<br />

Subsection 5(2) of Bill 150 will permit<br />

Cabinet to define classes of energy<br />

users and require such users to<br />

prepare a conservation and demand<br />

management plan. While small-scale<br />

landlords are unlikely to become<br />

defined energy users, owners and<br />

managers of multi-unit rental residential<br />

portfolios may be defined and be<br />

required to produce a plan. The<br />

requirements of any such plan will be<br />

prescribed by regulation.<br />

Section 14 of the Bill prohibits the sale<br />

or “lease” of an appliance that does not<br />

meet energy efficient standards. These<br />

standards are to be defined by regulation<br />

and approved appliances will be<br />

evidenced by a label, again to be<br />

described by regulation. While perhaps<br />

a stretch, future iterations of the Bill<br />

will need to clarify whether this provision<br />

includes the indirect leasing of<br />

appliances that occurs when a landlord<br />

leases a unit along with its appliances.<br />

Finally, the Bill permits the Minister<br />

of Energy and Infrastructure to<br />

make grants and loans to encourage<br />

energy conservation.<br />

To date, there has been minimal discussion<br />

of the effect of Bill 150 on<br />

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landlords and tenants. In fact, searches<br />

through the Hansards of the Bill’s<br />

first and second reading debates<br />

revealed only the following comments<br />

from Ms. Cheri De<strong>No</strong>vo, the MPP for<br />

Parkdale-High Park:<br />

It's one thing to bring forth legislation.<br />

But if you don't enforce the legislation,<br />

if you don't put money behind<br />

the legislation, it's just so many words,<br />

so much paper. I wish I could say differently<br />

about Bill 150, but unfortunately<br />

I can't. It's more paper, it's<br />

pretty words and it says "green" a lot.<br />

But it's not going to help me put new<br />

windows in my house. It's not going to<br />

help the tenants in Parkdale, who are<br />

paying their own utilities, by the way,<br />

and have no control over what those<br />

utility statements say. And it's not<br />

going to help their landlords, who<br />

have these massive buildings and can<br />

barely afford to keep them up and certainly<br />

cannot afford to do the major<br />

retrofits these buildings demand.<br />

That's downtown.<br />

The Bill reaffirms the government's<br />

commitment to encourage conservation<br />

and demand management<br />

("CDM") which creates opportunities<br />

for owners to pursue such measures in<br />

conjunction with their local utility.<br />

Utilities will be under additional pressure<br />

to bring forth CDM projects which<br />

will likely be supported through the<br />

general distribution rates charged to all<br />

customers. Local utilities may be able to<br />

support owners who wish to improve<br />

the energy envelope of the building<br />

through such measures as improving<br />

the thermal insulation or by providing<br />

more efficient lighting or appliances.<br />

In addition, there may be opportunities<br />

for owners who wish to pursue<br />

The experienced lawyers<br />

you can count on<br />

From acquisitions, dispositions and financing, re-development and<br />

intensification, to tax and regulatory matters – Aird & Berlis LLP is<br />

actively engaged in all aspects of the rental housing industry.<br />

We have extensive expertise in the range of multifaceted legal issues that<br />

affect you. Rely on A&B to provide seamless, timely and cost-effective<br />

practical solutions to any multi-residential property issue.<br />

Partnership. Results. Success. ®<br />

Brookfield Place, 181 Bay Street, Suite 1800, Toronto, ON M5J 2T9<br />

T 416.863.1500 F 416.863.1515 W www.airdberlis.com<br />

the production of electricity through<br />

solar or other green energy sources.<br />

The Bill would remove several of the<br />

municipal approvals and permits that<br />

may have inhibited owners from considering<br />

small generation projects.<br />

Finally, for such projects, the price to<br />

be paid for this electricity has<br />

increased significantly from the previous<br />

Renewable Energy Standard<br />

Offer Program so projects may now<br />

be viable.<br />

For more information, please contact:<br />

Robert Doumani<br />

T 416.865.3060<br />

E rdoumani@airdberlis.com<br />

As noted above, Bill 150 has been<br />

referred to the Standing Committee on<br />

General Government. The Committee<br />

held public hearings in Toronto on<br />

<strong>Apr</strong>il 6, 8, 20 and 22, <strong>2009</strong>, and in<br />

London, Ottawa, and Sault Ste. <strong>Mar</strong>ie<br />

the week of <strong>Apr</strong>il 13, <strong>2009</strong>. F<br />

Editor’s note: At the time of this issue going to<br />

press, <strong>FRPO</strong> was scheduled to testify on behalf<br />

of landlords before the Standing Committee on<br />

General Government regarding the Green<br />

Energy Act on <strong>Apr</strong>il 22, <strong>2009</strong>.<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

33


J.D. Power<br />

Customer<br />

Service<br />

Champions<br />

Recognized<br />

For the first time, J.D. Power and Associates is<br />

pleased to recognize selected residential rental<br />

properties across Canada as J.D. Power Customer<br />

Service Champions. Nationally, 15 properties have<br />

been recognised; eight of these are in Ontario.<br />

The Customer Service Champion designation is achieved by<br />

property managers whose service performance is rated by<br />

residents as being among the top 15% of eligible properties<br />

nationally in the <strong>2009</strong> J.D. Power and Associates Canadian<br />

Resident Satisfaction Study. This recognition is only available<br />

at the individual property level and reflects voice-ofthe-customer<br />

feedback related to the application/move-in<br />

experience and property management staff performance.<br />

Our research shows that after suite quality, the performance<br />

of property management staff is the most important factor<br />

in the residents’ overall experience. The property management<br />

staff members are integral to the success of any property<br />

as they represent the face of both the property and the<br />

brand. These are the people that residents turn to should<br />

they have a question or concern - and a timely and thorough<br />

response is always expected.<br />

The following Ontario properties have demonstrated their<br />

commitment to providing a benchmark level of customer<br />

care and service.<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

10 Lisa Street Brampton, ON<br />

Bretton Place Toronto, ON<br />

Five After Five London, ON<br />

Minto ForestView Ottawa, ON<br />

Minto Roehampton Toronto, ON<br />

Residences on Bloor Toronto, ON<br />

Southwest One London, ON<br />

The Diplomat Burlington, ON<br />

The <strong>2009</strong> Canadian Resident Satisfaction Study is based on<br />

responses from 11,724 residents across Canada. The study is<br />

fielded annually in <strong>No</strong>vember. Please contact <strong>Mar</strong>c Thibault<br />

by phone at 416-847-3285 or by email at<br />

marc.thibault@jdpa.com for more information. F<br />

34


What does resident satisfaction really mean for<br />

a property manager The benefits of resident<br />

satisfaction go far beyond putting<br />

smiles on the face of your residents. When<br />

you prioritize the things that are truly important to your<br />

residents, the results can be dramatic - and can have a significant<br />

financial impact on the growth and success of your<br />

property through increased referrals and renewals as well as<br />

other positive business outcomes.<br />

Achieving and maintaining market leadership requires a<br />

systematic approach to understanding and anticipating resident<br />

needs. The most successful property managers are<br />

attentive to the voice of the resident, and align operational<br />

policies and procedures to better meet the needs and expectations<br />

of their residents.<br />

Does<br />

Resident<br />

Satisfaction<br />

Really Matter<br />

By <strong>Mar</strong>c Thibault, J.D. Power and Associates<br />

Since its inception in 2005, J.D. Power and Associates’<br />

Canadian Resident Satisfaction Study has asked residents<br />

across Canada to report on all aspects of their residentialtenant<br />

experience (from application/move-in through to<br />

lease renewal) and to share this critical information with<br />

their managers so they can better understand and respond<br />

to the voice of their residents.<br />

Given today’s challenging economic reality, we wanted to<br />

reassure managers that resources invested in improving<br />

their residents’ overall experience was money well spent. In<br />

the <strong>2009</strong> study, we examined the relationship between resident<br />

satisfaction and two desired business outcomes that<br />

are of particular interest to property managers – retention<br />

and referrals.<br />

Property managers who achieve higher satisfaction performance<br />

have residents who are nearly twice as likely to<br />

continue their tenancies than managers who exhibit lower<br />

satisfaction performance. <strong>No</strong>te that the above analysis illustrates<br />

the proportion of residents who report that they “definitely<br />

will” stay as these are the only residents who can<br />

reliably be counted on to follow through with their commitment.<br />

What is the financial impact of reducing your properties’<br />

resident turnover by half The costs for such items as<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

35


Impact of Satisfaction on Retention & Referrals<br />

Vacancy Rate %<br />

80%<br />

70%<br />

60%<br />

50%<br />

40%<br />

30%<br />

20%<br />

10%<br />

0%<br />

2x<br />

17 25 32 13 30 38<br />

Renew Lease<br />

(% Definitely Will)<br />

Low Satisfaction<br />

Medium Satisfaction<br />

High Satisfaction<br />

Recommend Property<br />

(% Definitely Will)<br />

Source: J.D. Power and Associates <strong>2009</strong> Canada Resident Satisfaction Study SM<br />

vacancy, renovation/refurbishing and advertising can<br />

quickly add up to a significant investment.<br />

Property managers who achieve higher satisfaction performance<br />

also enjoy much higher levels of advocacy than<br />

managers with lower levels of resident satisfaction.<br />

Residents are three times more likely to become a “fan” of<br />

3x<br />

the property and/or property manager, and to refer friends,<br />

relatives and colleagues. Given this reality, every resident<br />

“touchpoint” represents an opportunity to exceed expectations<br />

and therefore to create another advocate for your<br />

property – free word-of-mouth advertising.<br />

This ‘advocacy advantage’ results in new prospects who<br />

are already predisposed to the property and property<br />

manager by virtue of the enthusiastic recommendation of<br />

a trusted family member, friend or colleague. Over time,<br />

these managers will enjoy lower advertising and promotional<br />

costs because consumers begin to seek out the property<br />

on the basis of its excellent reputation, and not due to<br />

other potentially costly incentives like low rental fees or<br />

move-in rebates.<br />

In short, managers who deliver strong satisfaction performance<br />

also deliver enhanced bottom line performance<br />

over the long run. F<br />

The <strong>2009</strong> Canadian Resident Satisfaction Study is based on responses<br />

from 11,724 residents across Canada. The study is fielded annually in<br />

<strong>No</strong>vember. Please contact <strong>Mar</strong>c Thibault by phone at 416-847-3285 or by<br />

email at marc.thibault@jdpa.com for more information.<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

36


Sifton Properties<br />

Wins Award<br />

Sifton Recognized by the Architectural Conservancy<br />

of Ontario's Local Branch<br />

By Patrick Maloney, the London Free Press<br />

A heritage preservation award<br />

for a developer<br />

Though that may be unexpected<br />

in a city where critics often<br />

blame the losses of stately old<br />

structures on developers,<br />

Sifton Properties is being applauded<br />

for its work preserving two historic<br />

London buildings.<br />

"That (the criticism) is what often<br />

makes the headlines, but obviously<br />

that's not always the case," said <strong>Mar</strong>ilyn<br />

Loft of the Architectural Conservancy<br />

of Ontario's local branch.<br />

"We're very happy to give them the<br />

recognition."<br />

The local branch of the conservancy<br />

and the Heritage London Foundation<br />

handed out the awards.<br />

Sifton is credited with preserving the<br />

Scott Farmhouse, an estate home at<br />

1603 Hamilton Rd., and Woodholme,<br />

a castle-like Wonderland Road structure<br />

that for years was home to the<br />

Lawson family.<br />

The latter was the first poured-concrete<br />

building built in Ontario,<br />

according to a Sifton statement that<br />

called the 1893 structure an example<br />

of the "Victorian gothic revival" style.<br />

Both homes are being incorporated<br />

into Sifton residential developments,<br />

with Woodholme the "focal point" of its<br />

Woodholme Park community, said Phil<br />

Masschelein, a Sifton vice-president.<br />

There were eight other heritage<br />

preservation awards handed out at last<br />

week's gala.<br />

Other recipients included Julia Beck<br />

for her longtime activism, city hall and<br />

the Friends of Labatt Park for renovations<br />

to the Roy McKay Clubhouse<br />

and the Ontario Dental Assistants<br />

Association for saving 869 Dundas St<br />

in London. F<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

37


Apartment<br />

By Alan Dutkewich ROCK Apartment Advisors<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

Security is a feeling of<br />

freedom from danger, doubt,<br />

fear, or a condition of being<br />

protected against danger or<br />

loss. People like the concept that they<br />

are being protected from dangers that<br />

originate outside. As a police officer<br />

with the City of Brantford Ontario for<br />

thirty years I investigated thefts and<br />

other related problems at various<br />

apartments. The following article is<br />

based on personal observations and<br />

literature I have read.<br />

Exterior Protection<br />

The first thing I would like to address<br />

is the outside of the building. Are<br />

there trees and shrubs that are so close<br />

to a building that people can hide<br />

using them for protection It is beneficial<br />

to have the apartment building<br />

pleasing to the tenants, but it is also<br />

necessary to protect them. Cutting<br />

bushes that are too close to the building<br />

to a height of about a foot and a<br />

half, and eliminating hedges close to<br />

basement or ground level units would<br />

provide a degree of security. Trees<br />

within twenty-five feet of any building<br />

should have the branches trimmed so<br />

that they are not lower than eight feet<br />

from ground level. And they should be<br />

no closer than ten feet from balconies.<br />

A determined person can scale a tree<br />

to get on to a balcony.<br />

Eliminating hiding spots not only discourages<br />

criminals, but it also permits<br />

residents to observe and report suspicious<br />

persons or behaviour, and to<br />

avoid danger themselves.<br />

Lighting<br />

Criminals would rather not be seen<br />

committing their criminal activities.<br />

Appropriate lighting is a relatively<br />

inexpensive security measure to deter<br />

some criminals.<br />

Apartment and condo parking lots and<br />

garages are often the target of thieves.<br />

Criminals are usually drawn to these<br />

areas because there is an abundance of<br />

vehicles to steal or steal from. If your<br />

building has had a rash of crime or<br />

continued problems in this area then<br />

proper security must be addressed.<br />

There should be enough lighting to<br />

cover the parking area and make it<br />

visible to anyone in the building. Any<br />

darkened area is a calling card for a<br />

thief to use as protection. These<br />

lights should be controlled by a timer<br />

and they should be covered to<br />

protect them. I have investigated<br />

damage to lights and that shows that<br />

they were doing the job and annoying<br />

the criminals.<br />

Lighting in a parking garage is very<br />

important in taking away some of the<br />

hiding areas made available by the<br />

building structure. A glossy white<br />

paint should be used to enhance the<br />

lighting. This lighting should be maintained<br />

on a twenty four hour basis as<br />

day light does no penetrate all areas.<br />

Exterior lighting should emit enough<br />

light so that the surroundings leading<br />

to the building are visible and any<br />

person in the area can be seen.<br />

Videos<br />

Proper lighting also helps if you have<br />

video surveillance at the door areas<br />

and parking lots as this can help<br />

reduce criminal activities and help in<br />

the apprehension of persons. In the<br />

Toronto Star a bike thief was shown<br />

stealing a bike from an apartment. The<br />

video shows him trying to get in the<br />

front door and then going to the side<br />

door where he got the attention of a<br />

tenant. Unfortunately this person let<br />

him in and it then shows him going to<br />

the garage picking out a bicycle and<br />

walking out with it. A police officer<br />

saw the paper, recognized the thief and<br />

they arrested him. This is an example<br />

of what good lighting and video can<br />

provide in the way of security<br />

Unwanted Persons<br />

In the above paragraph I mentioned a<br />

tenant letting in a thief. I always wondered<br />

why people who are worried<br />

about theft or vandalism would let<br />

people they don’t know into their<br />

buildings, yet it happens all the time.<br />

Tenants should be made aware that<br />

suspicious or unknown people should<br />

38


Security<br />

not be allowed in. Criminals will buzz<br />

apartments until some one lets them<br />

in. They may say they have a delivery or<br />

another excuse. If the tenant they are<br />

buzzing has not answered them then<br />

there must be a reason for it. If your<br />

building has a superintendent let<br />

him/her know and they can check the<br />

person out. It may be hard for some<br />

people to do but when exiting or entering<br />

a building, do not let anyone in<br />

who has not been approved to enter.<br />

Apartment Door Security<br />

If a person gets into the building then<br />

you want to be prepared with secure<br />

doors. A good quality dead bolt<br />

installed with a security strike plate on<br />

the door frame is better than a key<br />

cylinder in the doorknob. Make sure all<br />

doors are mounted with hinge bolts<br />

facing on the inside. A wide angle<br />

viewer installed in the door will provide<br />

a good view of whoever is at the door.<br />

The sliding doors at the balcony<br />

should be locked when not in use and<br />

a security bar should be in place to<br />

prevent the door from being forced<br />

open. You can drill a hole through the<br />

upper frame and insert screws to<br />

prevent the door from being lifted<br />

from the track. The same could be<br />

done for the windows also.<br />

Balconies<br />

Ground floor balconies can be a stepping<br />

stone for a thief. There was a<br />

rapist in Toronto who used this means<br />

to get into the victims apartments. He<br />

would lift himself up by standing on<br />

one upper rung and the lift himself up<br />

to the next. A metal plate wrapped<br />

around the balcony is a determent but<br />

it must cover the area where a person<br />

could get a finger grip.<br />

Emergency Lighting<br />

The 2006 Ontario building code<br />

section 3.2.7.4 covers Emergency<br />

power for lighting but this can apply<br />

anywhere. It states that “an emergency<br />

power supply shall be provided to<br />

maintain the emergency lighting<br />

required by this subsection from a<br />

power source such as batteries or generators<br />

that will continue to supply<br />

power in the event that the regular<br />

power supply to the building is interrupted,<br />

and so designed and installed<br />

that upon failure of the regular power<br />

it will assume the electrical load automatically<br />

for a period of 2hrs for a<br />

high rise, 1 hour for a group B building<br />

and 30 min for a building of other<br />

occupancy ,6 stories, in height.”<br />

A strong emitting light afixed at the<br />

exit sign should show a person a clear<br />

path to the exit. This I can’t stress<br />

enough because I’ve been involved in a<br />

situation where this wasn’t provided.<br />

In <strong>No</strong>vember of 1974 I was dispatched<br />

to an apartment fire and upon arriving<br />

a woman came out yelling that her<br />

kids were inside. I went in and was<br />

met with dense smoke but no light. I<br />

crawled on the floor and found a two<br />

year old which I grabbed and crawled<br />

back to the top of the stairs and<br />

handed her off. I then went back<br />

towards the screams of the other two<br />

but I couldn’t see a thing and eventually<br />

left when the fire department<br />

arrived. I always wondered if a strong<br />

light cutting through the smoke made<br />

any difference. In my mind, I believe it<br />

would have. F<br />

Disclaimer<br />

This article is based on personal<br />

observations and data gathered from<br />

other sources. This article should not<br />

be used for making security decisions.<br />

The author of this article shall not be<br />

liable to any person or entity with<br />

respect to any loss, liability, or damage<br />

alleged to have been caused by the use<br />

or application of any information in<br />

this article.<br />

Alan Dutkewich is a Sales Representative and a<br />

retired police officer. Free apartment building<br />

security checks available upon request. For<br />

more information, contact ROCK Apartment<br />

Advisors Inc. Brokerage,<br />

adutkewich@rockaptadvisors.ca, (519)717-2497.<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

39


STAND OUT<br />

FROM THE CROWD<br />

20 Upjohn Road, Suite 105<br />

Toronto, Ontario<br />

M3B 2V9<br />

Toll free: 1-877-688-1960<br />

Fax: 416-385-7112<br />

Phone: 416-385-1100<br />

WWW. CRBPROGRAM. ORG


Overwhelming Need<br />

Sophia sat, carefully examining the rain boots and<br />

debating the advantages of butterflies over pink<br />

daisies. <strong>No</strong>t a decision to be made frivolously.<br />

Ted, Sophia's grandfather anticipating her long<br />

deliberation, sat patiently.<br />

Beside them, William and his mom were waiting their turn<br />

for the attention of the sales associate. William studied<br />

Sophia and her grandfather, taking in every detail. Unable<br />

contain his curiosity any longer William asked Sophia if her<br />

grandfather was a lawyer. "<strong>No</strong>, he fixes apartment buildings"<br />

she replied. Before Sophia's grandfather could respond,<br />

William looked up at Ted "Can you fix our building" he<br />

said, "There are holes in the walls and mice."<br />

Ted, was taken. "From the mouths of babes" he thought. "I<br />

don't really fix apartments but I can certainly tell your mom<br />

were you both can find an apartment you will be happy in."<br />

Ted Whitehead, Sophia's grandfather is the Director of<br />

Certification for the Certified Rental Building Program.<br />

CRB launches its public campaign for William and all the<br />

families across Ontario. It was clear from the first Certified<br />

Rental Building launch in Toronto's High Park that savvy<br />

property owners and PM's understood value and marketing<br />

advantages of the CRB Program.<br />

campaign. The Certified Rental Building Program is gathering<br />

momentum. This month transit shelters, radio and print ads<br />

will let the public know - there is a program that stands for<br />

quality assurance in the apartment rental industry. F<br />

<strong>No</strong>w, a casual conversation, a<br />

chance encounter and an overwhelming<br />

need are driving<br />

the public awareness<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

41


<strong>2009</strong> CORPORATE MEMBERS<br />

Aird & Berlis LLP<br />

BCE Place, Suite 1800, Box 754,<br />

181 Bay Street, Toronto, ON M5J 2T9<br />

Phone: 416.863.1500<br />

Fax: 416.863.1515<br />

Appliance Canada<br />

8701 Jane Street<br />

Concord ON L4K 2M6<br />

Attention: Harley Zaretsky<br />

Tel: 905 660 2424<br />

Bell Canada<br />

100 Wynford Dr, 6th Floor<br />

Toronto ON M3C 4B4<br />

Attention: Greg Ranson<br />

Tel: 416 353 8544<br />

Carma Industries Inc.<br />

494 The Parkway, Peterborough, ON K9J 7L9<br />

Attention: Rick Williams<br />

Phone: 888 298 3336<br />

Fax: 705 743 3575<br />

CMHC Ontario Business Centre<br />

100 Sheppard Ave. E, Suite 300,<br />

Toronto, ON, M2N 6Z1<br />

Phone: 416 221-2642<br />

Fax: 416 218-3310<br />

Coinamatic Canada Inc.<br />

301 Matheson Boulevard West<br />

Mississauga, ON L5R 3G3<br />

Phone: 905 755 1946<br />

Toll Free: 1 800 361 2646<br />

Fax: 905 755 8885<br />

Cordeiro Roofing Ltd.<br />

343 Olivewood Rd. Toronto, ON M8Z 2Z6<br />

Phone: 416 234 9901<br />

Fax: 416 234 9581<br />

info@cordeiroroofing.com<br />

Enbridge Electric Connections<br />

PO Box 650, Scarborough ON M1K 5E3<br />

Attention: Wendy Mortson<br />

Tel: 905 747 5589<br />

Fax: 905 881 1732<br />

Enbridge Gas Distribution<br />

P.O. Box 650, Scarborough ON M1K 5E3<br />

Attention: Adrian St. Kitts<br />

Phone: 416 495 5263<br />

Fax: 416 495 8350<br />

First National Financial LP<br />

100 University Ave., <strong>No</strong>rth Tower, Suite 700,<br />

Toronto ON M5J 1V6<br />

Attention: Mr. Peter Cook<br />

Phone: 416 593 1100<br />

Fax: 416 593 1900<br />

GE Appliances Commercial Sales<br />

Suite 300, 5420 <strong>No</strong>rth Service Rd,<br />

Burlington, ON L7R 5B6<br />

Attention: Doug Price<br />

Telesales Area Sales Manager, Commercial<br />

Phone: 905 315 2348 Toll Free: 1 800 361 2500<br />

Fax: 1 800 307 8927<br />

HSBC Bank of Canada<br />

3000 Steeles Avenue East,<br />

<strong>Mar</strong>kham, ON L3R 4T9<br />

Attention: Tony Iannello<br />

Phone: 905 475 6339<br />

Fax: 905 475 5957<br />

Jacques Whitford<br />

7271 Warden Avenue,<br />

<strong>Mar</strong>kham, ON L3R 5X5<br />

Attention: Chris Welch<br />

Phone: 905 474 7704<br />

Fax: 905 479 9326<br />

J.D. Power and Associates<br />

2225 Sheppard Avenue East<br />

Toronto ON M2J 5C2<br />

Attention: David Hanson<br />

Tel: 416 499 3033<br />

Fax: 416 499 6626<br />

<strong>Mar</strong>sh Canada Limited<br />

70 University Ave, Suite 800<br />

Toronto ON M5J 2M4<br />

Attention: Neil Gilbertson<br />

Tel: 416 349 6656<br />

Midnorthern Appliance<br />

137 Chrislea Drive<br />

Vaughan, ON L4L 8N6<br />

Attention: Michael Gnat<br />

905-850-5335 phone<br />

1-877-353-2850 toll-free<br />

905-850-5348 fax<br />

Murray & Company Limited<br />

40 University Avenue, Suite 502,<br />

Toronto ON M5J 1S3<br />

Attention: Mr. Robert Lynch, Vice-President<br />

Phone: 416 598 0950<br />

Fax: 416 597 8415<br />

Reliance Home<br />

Comfort<br />

Reliance Home Comfort<br />

2 Lansing Sq, 12th Floor<br />

Toronto ON M2J 4P8<br />

Attention: Joanne Druce<br />

Tel: 416 499 7245<br />

Fax: 416 499 7095<br />

Rogers Cable Communications<br />

855 York Mills Road, Toronto, Ont M3B 1Z1<br />

Attention: Mr. Tim Stipic<br />

Tel: 416 446 6500<br />

Fax: 416 446 7416<br />

Rona<br />

220 chemin du Tremblay<br />

Boucherville PQ J4B 8H7<br />

Phone: 514 599 5900<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

Sparkle Solutions<br />

2700 Steeles Avenue West, Unit 4<br />

Concord ON L4K 3C8<br />

Phone: 905 660 2282<br />

Wyse Meter Solutions Inc.<br />

31 Davisville Avenue<br />

Toronto ON M4S 1G3<br />

Tel: 416 869 9900<br />

Stratacon<br />

641 Chrislea Road, Unit 8,<br />

Woodbridge, ON L4L 8A3<br />

Attention: Peter Mills<br />

Phone: 905 856 4001<br />

Fax: 905 856 1513<br />

Yardi Systems Inc.<br />

5925 Airport Road, Suite 510,<br />

Mississauga ON L4V 1W1<br />

Attention: Mr. Peter Altobelli<br />

Phone: 905 671 0315<br />

Fax: 905 671 9424<br />

email: peter.altobelli@yardi.com<br />

TD Canada Trust Multi-Unit<br />

Residential Mortgages<br />

55 King Street West 39th Floor, TD Tower,<br />

Toronto ON M5K 1A2<br />

Attention: Mr. David Gale<br />

Phone: 416 944 6574<br />

Fax: 416 944 6650<br />

York Communications,<br />

a division of MMPI<br />

3080 Yonge Street, Suite 3020<br />

Toronto ON M4N 3N1<br />

Phone: 416 512 1215<br />

Toronto Star<br />

1 Yonge Street, 4th Floor Toronto<br />

ON M5E 1E6<br />

Tel: 416-869-4879<br />

42


<strong>FRPO</strong> Bulletin Wrap-Up<br />

OEB Announces Submetering Freeze<br />

Without consultation with affected parties (including<br />

<strong>FRPO</strong>), the Ontario Energy Board has released a<br />

Compliance Bulletin which effectively freezes and halts the<br />

submetering of residential complexes.<br />

<strong>No</strong> explanation is provided with the bulletin about just<br />

how projects which are part way through installation will<br />

be affected, so <strong>FRPO</strong> cannot at this time answer questions<br />

to those who are part way through submetering projects.<br />

Neither can we answer questions as to whether or not<br />

there are implications for recently submetered projects.<br />

The bulletin implies that all such submetering activities<br />

are “prohibited”, so it is not clear to <strong>FRPO</strong> what the implications<br />

are.<br />

Real Property Energy Audits Prior to Sale<br />

The Act states that a requirement for energy audits<br />

takes effect when a person sells or leases an interest in<br />

“real property”.<br />

The legislation does not specify the class of property to be<br />

included in this requirement, and there are no rules on how<br />

multi-residential properties will be affected. <strong>FRPO</strong> is currently<br />

consulting with the government to determine the<br />

impact on landlords.<br />

The estimated costs for single family home energy audits are<br />

about $300 ($150 after a government rebate). There is no<br />

requirement for energy efficiency problems found in an<br />

audit to be rectified.<br />

The bulletin refers to its intention to ensure that “the appropriate<br />

regulatory framework is in place to protect consumers”.<br />

The provincial government has indicated to <strong>FRPO</strong><br />

that it plans to bring in new legislation and regulations<br />

regarding submetering in the fall, so presumably this<br />

measure is closely tied to provincial plans to regulate this<br />

activity in the fall.<br />

<strong>FRPO</strong> is very disappointed that this regulatory body chose<br />

to take such a sudden harsh regulatory action without consultation.<br />

<strong>FRPO</strong> will provide additional information on this<br />

matter to members once we have a better understanding of<br />

its implications.<br />

For more information, contact Vince Brescia,<br />

President & CEO, <strong>FRPO</strong>, 416-385-1100 x20<br />

Green Energy Act, <strong>2009</strong>:<br />

Sweeping Energy Bill Introduced<br />

The Green Energy Act introduced in the Ontario legislature<br />

on February 23, <strong>2009</strong>, amends no less than 15 different laws<br />

and statutes, and is focused on promoting both renewable<br />

energy sources and energy conservation programs in the<br />

public and private sector. Following is a summary of key<br />

changes and potential impacts on landlords.<br />

Incentive Programs<br />

The Minister stated at the introduction of the Bill that the<br />

proposed Act will foster a culture of conservation by assisting<br />

homeowners, government, schools and industrial<br />

employers to transition to lower energy use.<br />

There is no specific mention or description of any subsidy<br />

or incentive programs for the private rental housing sector.<br />

As recommended in <strong>FRPO</strong>’s input for the <strong>2009</strong> Ontario<br />

Budget, we will continue to advocate for a rental housing<br />

energy conservation tax credit.<br />

Building Code Changes<br />

The Ontario Building Code is amended to include requirements<br />

for energy conservation. The proposed Act requires the<br />

Minister to initiate reviews of the building code with reference<br />

to standards for energy conservation, at five-year intervals.<br />

The Minister of Energy stated yesterday that for new buildings,<br />

Leadership in Energy and Environmental Design-<br />

LEED-silver will be the new standard.<br />

Low Income Programs<br />

The Minister’s announcement yesterday indicated the new<br />

legislation will set the stage for requiring targeted conserva-<br />

continued...<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

43


Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

44<br />

tion measures to protect low income Ontarians from<br />

increases in energy prices. The class of consumers that<br />

would be affected, and what conservation measures will be<br />

required, are not known yet and will likely be determined by<br />

future regulations or directives.<br />

Establishing the "Right to Connect" to the Electricity Grid<br />

for Renewable Projects<br />

The Electricity Act is amended to require transmitters and<br />

distributors to connect generation facilities to their<br />

transmission systems or distributions systems if specified<br />

criteria are satisfied. The class of market participants that<br />

would be eligible will be determined by future<br />

Ministerial directives.<br />

The example given by the Minster of Energy yesterday was<br />

distributed generation projects that, for example, transform<br />

roofs that currently reflect the sun to rooftops that put it to<br />

use to generate electricity. It is not known yet if projects<br />

located on multi-residential rental properties would meet<br />

the required criteria.<br />

Energy Supply and Costs<br />

The proposed Act will promote the supply of renewable<br />

energy generation by streamlining the approvals process for<br />

new projects and incent proponents, large and small, to<br />

develop projects by offering an attractive price (a “Feed-in<br />

Tariff”) for renewable energy. Specific amounts are not<br />

known yet, but the general consensus among experts is that<br />

the per kilowatt hour costs for electricity in Ontario will rise<br />

as more expensive renewable sources replace cheaper fossil<br />

fuel energy sources.<br />

For more information, contact Mike Chopowick,<br />

Manager of Policy, 416-385-1100 ext 21<br />

<strong>2009</strong> Ontario Budget Increases Industry<br />

Costs and Rents<br />

The Ontario <strong>2009</strong> Budget proposed some of the most<br />

sweeping tax reform measures seen in many years.<br />

There will be an overall negative impact on the rental<br />

housing industry and its customers due to the implementation<br />

of a harmonized sales tax (HST). The budget<br />

also proposes several relief measures targeted to individuals<br />

and businesses that may partially offset the<br />

impact of the HST. The highlights of the <strong>2009</strong> Budget<br />

are listed below.<br />

Harmonized Sales Tax (HST) Will Increase Rental Costs<br />

The Ontario government has announced that the PST and<br />

GST will be harmonized in Ontario. It is proposed that,<br />

starting July 1, 2010, Ontario’s Retail Sales Tax (RST) would<br />

be converted to a value-added tax structure and combined<br />

with the federal Goods and Services Tax (GST) to create a<br />

federally administered single sales tax. The single sales tax<br />

would have a combined tax rate of 13 per cent. The provincial<br />

portion would be eight per cent — the same as the<br />

general RST rate — and the federal portion would be five<br />

per cent.<br />

<strong>FRPO</strong> estimates that this new action will increase residential<br />

rents in Ontario by 2.5 to 3.0 percent, or an average annual<br />

rent increase of $270 to $320 per year.<br />

Rental housing is one of the few types of businesses in<br />

Canada that is “GST-exempt” (others include health and<br />

dental services, financial services, and day-care for<br />

example). There is no GST on rents. But rental housing<br />

providers must pay GST on their input costs – they do not<br />

get an input tax credit.<br />

The impact of harmonization is to extend the PST to a<br />

variety of new input costs that previously were exempt. In<br />

apartments this includes such costs as gas heat, electricity,<br />

maintenance contracts, property management services,<br />

maintenance contracts, renovation contracts, and so on.<br />

The <strong>2009</strong> Budget proposes an exemption for home purchasers.<br />

<strong>FRPO</strong> is calling on the province to exempt rental<br />

housing providers in the same way it plans to exempt new<br />

homes, since the impact will be borne by much lower<br />

income households in the rental market. <strong>FRPO</strong> is also continuing<br />

to analyze the impact of the HST on the rental<br />

housing industry, and will provide future information<br />

updates to <strong>FRPO</strong> members.<br />

Housing Rebate<br />

The government is proposing a new housing rebate to<br />

ensure that, on average, new homes under $400,000<br />

would not be subject to an additional tax burden.<br />

Homebuyers would be able to claim a rebate of part of the<br />

provincial portion of the tax for new homes priced up to<br />

$500,000. The rebate for new primary residences under<br />

$400,000 would be 75 per cent of the provincial portion<br />

of the tax (or six per cent of the purchase price), with the


ebate amount reduced for homes priced between<br />

$400,000 and $500,000. Resale homes would not be<br />

subject to the single sales tax.<br />

Ontario Sales Tax Transition Benefit<br />

As part of the sales tax reform proposed in the Budget, $4<br />

billion in one-time tax relief would be provided to<br />

Ontarians. Benefits would be delivered to eligible Ontario<br />

tax filers aged 18 and over in each of June 2010, December<br />

2010 and June 2011, totalling a maximum of $300 for<br />

single people and $1,000 for single parents and couples.<br />

Each maximum benefit would be reduced by five per cent<br />

of the recipients’ previous year’s adjusted family net<br />

income over $80,000 for single individuals and over<br />

$160,000 for families.<br />

To qualify for the two benefits in 2010, a <strong>2009</strong> tax return<br />

would have to be filed, and a 2010 tax return would have to<br />

be filed for the June 2011 benefit. About 6.5 million individuals<br />

and families in Ontario would qualify for sales tax transition<br />

benefits.<br />

Cutting Corporate Income Tax (CIT) Rates<br />

Ontario’s current general Corporate Income Tax (CIT) rate<br />

is 14 per cent of taxable income. The small business CIT<br />

rate currently is 5.5 per cent. The government is proposing<br />

to cut CIT rates, beginning July 1, 2010, as follows:<br />

• the general CIT rate would be cut from 14 per cent to<br />

12 per cent and further reduced to 10 per cent over<br />

three years;<br />

• the CIT rate on M&P and resource sectors would be<br />

cut from 12 per cent to 10 per cent;<br />

• the small business CIT rate would be cut from 5.5 per<br />

cent to 4.5 per cent; and<br />

• the small business deduction surtax of 4.25 per cent<br />

would be eliminated.<br />

Ontario Sales Tax Transition Benefit<br />

Single Individuals<br />

Ontario’s Proposed Corporate Income<br />

Tax Rate Cut Plan<br />

Rates (Per Cent)<br />

Date General Small Small Business<br />

Business Deduction<br />

Surtax<br />

Current 14 5.5 4.25<br />

July 1, 2010 12 4.5 0<br />

July 1, 2011 11.5 4.5 0<br />

July 1, 2012 11 4.5 0<br />

July 1, 2013 10 4.5 0<br />

Reducing the Corporate Minimum Tax (CMT)<br />

As a result of the CIT reform proposals in the Budget, a corresponding<br />

reduction in the CMT rate is necessary to ensure<br />

that corporations subject to the CMT are able to fully benefit<br />

from the proposed CIT rate reductions. In addition, the government<br />

is proposing to exempt more small and mediumsized<br />

businesses from calculating and paying the CMT.<br />

It is proposed that effective for taxation years ending after<br />

June 30, 2010:<br />

• the CMT rate be reduced to 2.7 per cent; and<br />

• a corporation or an associated group with under $50<br />

million in total assets or under $100 million in annual<br />

gross revenues would not pay CMT.<br />

• The 20-year CMT credit carry-forward mechanism<br />

would continue to apply.<br />

• The proposed rate reduction would be pro-rated for<br />

taxation years straddling the effective date.<br />

Personal Income Tax Relief<br />

The government is proposing to provide more than $1.1<br />

billion annually in broadly based personal income tax relief<br />

by cutting the first tax rate by one percentage point, from<br />

6.05 per cent to 5.05 per cent, effective January 1, 2010.<br />

Single Parents or Couples<br />

Payment Month Maximum Benefit Phase-out Range Maximum Benefit Phase-out Range<br />

June 2010 $100 $80,000 - $82,000 $330 $160,000 - $166,600<br />

December 2010 $100 $80,000 - $82,000 $335 $160,000 - $166,700<br />

June 2011 $100 $80,000 - $82,000 $335 $160,000 - $166,700<br />

Total $300 $1000<br />

The Voice of the Federation of Rental-housing Providers of Ontario<br />

45


Ontario Personal Income Tax Rates (%)<br />

Taxable Income Current (<strong>2009</strong>) Proposed (2010)<br />

$0–$36,848 6.05 5.05<br />

$36,848–$73,698 9.15 9.15<br />

> $73,698 11.16 11.16<br />

tax credit would replace the current sales tax relief, provided<br />

through the Ontario Property and Sales Tax Credits, with<br />

advance payments. The sales tax credit would be refundable<br />

and paid quarterly starting in July 2010, when the new sales<br />

tax would come into effect.<br />

Ontario Property Tax Credit<br />

Property tax relief, currently provided through the Ontario<br />

Property and Sales Tax Credits, would be replaced by a new<br />

refundable Ontario Property Tax Credit for low- to middleincome<br />

homeowners and tenants that would provide an<br />

additional $270 million in property tax relief on an annual<br />

basis. The new credit would maintain existing benefit<br />

amounts while extending property tax relief to more<br />

Ontarians. Few additional tenant households will benefit<br />

from this measure.<br />

The new sales tax credit would provide annual relief of up<br />

to $260 for each adult and each child. It would be reduced<br />

by four per cent of adjusted family net income over $20,000<br />

for single people and over $25,000 for families.<br />

For example, for the period from July 2010 to June 2011, a<br />

single individual with income of $20,000 or less would receive<br />

$260; a single parent with one child or a couple with $25,000 or<br />

less of income would receive $520; and a couple with two children<br />

and family income of $25,000 or less would receive $1,040.<br />

Fair Exchange • <strong>Mar</strong>ch / <strong>Apr</strong>il <strong>2009</strong><br />

The credit would be based on occupancy cost — that is,<br />

property tax paid or 20 per cent of rent paid. A credit would<br />

be provided for occupancy cost of up to $250 for nonseniors<br />

or $625 for seniors, plus 10 per cent of occupancy<br />

cost. The credit would not exceed occupancy cost and<br />

would be subject to a maximum of $900 for non-seniors<br />

and $1,025 for seniors. It would then be reduced by two per<br />

cent of adjusted family net income in excess of $20,000 for<br />

single individuals and $25,000 for families.<br />

For example, for the 2010 taxation year, a single individual<br />

with income of $20,000 or less and $500 in monthly rent<br />

would receive $370 in Ontario Property Tax Credit; a couple<br />

with $1,500 in property tax and $25,000 or less of family<br />

income would receive $400; and a senior couple with $4,000<br />

in property tax and $25,000 or less in family income would<br />

receive $1,025.<br />

The amounts and thresholds would be indexed for inflation.<br />

About 2.3 million families and individuals would be<br />

affected from this measure. Eligible senior homeowners will<br />

continue to receive additional assistance with their property<br />

taxes through the Ontario Senior Homeowners’ Property<br />

Tax Grant.<br />

Ontario Sales Tax Credit<br />

This Budget proposes a new ongoing sales tax credit. Under<br />

the current tax system, Ontario families have to wait until<br />

their income tax returns are processed to receive sales tax<br />

relief for sales tax paid in the previous year. The new sales<br />

Unlike the current sales and property tax credits, the maximum<br />

benefit and thresholds would be indexed for inflation.<br />

For more information, please contact:<br />

Mike Chopowick 416-385-1100 ext 21<br />

Upcoming Events<br />

Residential Tenancy Act Seminar:<br />

A refresher course <strong>Apr</strong>il 29, <strong>2009</strong> at the Waterfront<br />

Centre in Hamilton<br />

Residential Tenancies Act Webinar<br />

for Landlords and Property Managers – May <strong>2009</strong><br />

<strong>FRPO</strong>’s <strong>2009</strong> Golf Classic,<br />

Angus Glen Gold Club, <strong>Mar</strong>kham – May 26, <strong>2009</strong><br />

Practical Environmental Seminar<br />

July <strong>2009</strong><br />

Rental Housing Human Resource Seminar<br />

August <strong>2009</strong><br />

<strong>FRPO</strong> MAC Awards Dinner<br />

December 3, <strong>2009</strong><br />

For more information or to register, please contact<br />

<strong>FRPO</strong> at 416-385-1100 or info@frpo.org<br />

46

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