How bureaucracy is adding to the problems in Canada's rental market
Landlords and tenants in search of a compromise in a crowded housing market.
Problems in the Canadian rental housing market are worsening because of a specific problem. Local experts talk about the phenomenon of delayed decisions on disputes between tenants and landlords. Recently, there has been an increase in the number of agreements in which tenants offer to vacate the property in exchange for monetary compensation, so-called "cash for keys" deals.
What's that?
Tenants facing eviction often use the overload of cases at the Ontario Landlord and Tenant Board as a bargaining chip to pressure landlords by demanding money for not taking their case to the Board. Hearings can reach 8-12 months (and sometimes 2 years!), during which time the tenant can continue to occupy the rental property. Alternatively, some tenants offer a 'cash for keys' deal — leaving for a round sum of cash.
The landlord must decide whether to wait for long months or pay up. Many property owners, especially in Toronto, often choose the second option.
How widespread is this problem?
The Ontario Ombudsman's May 2023 report revealed that the number of pending cases has reached 38,000. Delays become an even more pressing issue when it comes to selling a property. In such cases, if tenants refuse to leave and intend to take the matter to Council, it can delay the eviction process for many months, which discourages potential buyers.
The reluctance of tenants to leave rented accommodation is also contributed to by the constant rise in rental costs. High moving costs and difficulties in finding a new place to live encourage some to delay the eviction process.
The problem is not only relevant to Ontario. Due to problems arising from long wait times for decisions by rent boards, landowners in British Columbia have petitioned the Ministry of Housing for changes to the legislation. In the petition, they state that they face uncertainty due to tenants abusing the flaws in the system.
The existing gaps in the legislation and the Council's long processing times make landlords vulnerable to the law. Experts recommend them to be more careful in choosing tenants to minimize possible risks.
