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Tenants who have late payments on their records may have more difficulty accessing loans – credit cards, mortgages, and others. The Ontario government says it is studying “the feasibility” of working with credit rating agencies to penalize tenants who do not pay their rent.
In this sense, orders from the Landlord and Tenant Commission (CLI) could be given to credit agencies.
The project appears to still be under study and the Ford government has not revealed further details, but some landlords who have had to deal with difficult tenants say they are very happy that the government is considering the idea.
However, the vagueness surrounding the project worries at least one tenant defense organization.
Not always counted
Harry Fine, a paralegal and former Commission adjudicator, explains that credit reporting agencies do not have direct access to LTB orders.
Agencies can view published orders on CanLII, a website managed by the Canadian Legal Information Institute. However, according to Fine, there are often significant delays in publishing decisions and coverage is incomplete, as noted on the site itself.
Additionally, landlords can send CLI orders to credit reporting agencies if they want their tenants’ credit scores to be affected by the decision.
In recent years, new websites dedicated to disputes between tenants and landlords have also been created, such as Openroom, FrontLobby and Rentcheck.
On its website, the Ontario government states: Ontario is exploring the feasibility of arrangements with one or more approved consumer reporting agencies to facilitate access to Landlord and Tenant Board orders when tenants have prior late payments. This initiative will improve accountability and strengthen transparency.
No additional information was provided. CBC contacted the Ministry of the Attorney General, the CLI and TransUnion, but received no response before publication.
In a statement, Equifax said it was not receiving information from the CLI, but looked forward to working with the province on this initiative.
Currently, Equifax Canada integrates rental data into consumers’ credit files in accordance with applicable legislation, including the consent provision, it reads.
Tens of thousands of dollars
Alex Solga is a former London real estate owner who recently sold his rental properties. He says he sold them after dealing with several problem tenants. In addition, the long delays at the CLI only exacerbate his frustration.
Mr. Solga hopes that this initiative will allow landlords to obtain information on the rent payment history of potential tenants.
That would be the most important information a homeowner could ask for, he said. He believes current law protects bad tenants and says the eviction process is extremely painful.
Get your money back [de locataires qui refusent de payer leur loyer] is impossible. […] You can sue them, but you’ll never get a cent back, especially if they owe you $18,000 or $20,000.
Mike Rosehart says he once had a tenant who refused to pay his rent for 15 months. He said he later learned that this same tenant had used the same ploy with other landlords. Mr. Rosehart manages approximately 80 homes in the London area.
Mr. Rosehart says tenants like this shouldn’t get away with it. [La compagnie de gaz naturel] cut off your gas if you don’t pay. But if you don’t pay a landlord, no one cares.
He claims that it is less costly to pay delinquent tenants to move out than to wait to receive an eviction order from the CLI.
For its part, the London Property Management Association believes that such a change would simplify tenant selection and reduce the risk of non-payment.
However, we believe it is essential to implement this initiative in a way that respects tenant privacy and ensures accurate reporting to avoid potential abuse or unintended consequences, reads an email. from the London Property Management Association sent to CBC.
One way?
The details of the proposal remain unclear, worrying Douglas Kwan, director of legal and advocacy services at the Ontario Tenant Advocacy Centre.
For example, if someone carries a prescription [de la CLI] on appeal, what happens if TransUnion or Equifax have already received a report?, he says. We have seen many orders overturned by a court, in which the LTB was wrong to make its decision.
He added that long-term damage to a credit score can prevent a person from obtaining student and business loans or becoming homeowners.
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“Credit score influences your mortgage interest rate,” emphasizes the Government of Canada on its website. (Archives)
Photo : getty images/istockphoto / marchmeena29
For Mr. Kwan, this is a one-way project.
There is no question of passing on debts owed by landlords to credit bureaus, we are only talking about tenants’ arrears, he said.
MM. Fine, Kwan, Rosehart and Solga indicated they would like to see sweeping reform of the CLI. It had a backlog of 53,000 files when these statistics were last published at the start of 2023.
With reporting from CBC’s Matthew Trevithick
**How might the proposed policy of reporting late rent payments to credit agencies disproportionately impact low-income tenants and potentially exacerbate existing inequalities in accessing safe and affordable housing?**
## World Today News Interview: Tenant Late Payments and Credit Scores
**Welcome to World Today News. Today we are discussing a controversial proposal from the Ontario government that would potentially penalize tenants with late rent payments by reporting them to credit agencies. To help us understand this issue, we have two guests in the studio. Alex Solga, a former landlord who has experienced the frustrations of non-payment, and Douglas Kwan, Director of Legal and Advocacy Services at the Ontario Tenant Advocacy Centre, who represents tenants’ rights.**
**Section 1: The Problem of Late Rent Payments**
* **Mr. Solga, you have spoken publicly about the challenges you faced with tenants refusing to pay rent. Can you share some of your experiences and how they led you to sell your rental properties?**
* **Mr. Kwan, how prevalent is the issue of late rent payments in Ontario, and what are some of the underlying reasons that contribute to this problem?**
* **Both of you have mentioned the significant backlog at the Landlord and Tenant Board (LTB). How does this backlog impact both landlords and tenants involved in dispute resolution?**
**Section 2: The Proposed Solution: Reporting Late Payments to Credit Agencies**
* **Mr. Solga, the government’s proposal aims to allow landlords to report late payments to credit agencies. What are your thoughts on this potential solution, and would it address the concerns you raised about tenant accountability?**
* **Mr. Kwan, your organization has expressed concerns about the potential consequences of this proposal for tenants. Could you elaborate on these concerns and the potential impact on vulnerable populations?**
* **Both of you have mentioned the importance of tenant screening. How could the government balance the need for a fair system that protects both landlords and tenants in the selection process?**
**Section 3: Alternatives and Solutions**
* **Mr. Solga, are there any other solutions you believe the government could implement to address the issue of late rent payments and improve the rental landscape for both landlords and tenants?**
* **Mr. Kwan, what kind of safeguards or alternatives would you like to see in place to ensure fairness and prevent harm to tenants while still addressing the concerns of landlords?**
* **Beyond legislative changes, what are your suggestions for proactive measures that can be taken by landlords and tenant organizations to prevent disputes and promote responsible tenancy?**
**Closing:**
* **Thank you both for providing such insights into this complex issue. This is a topic that will undoubtedly remain in the public conversation, and we appreciate your valuable perspectives. **
**We invite our viewers to share their thoughts on this policy proposal and contribute to the ongoing dialog about housing affordability and tenant rights in Ontario. **
