Landlording in Canada. Michael Drouillard

      In this chapter, you will learn to:

      • Know the answers to tenancy law basics in your province before renting out your property.

      • Never accept tenancy law advice from your tenant: Always double check what the tenant tells you is the law.

      • Be aware of good practices to avoid discrimination: Know the difference between direct discrimination and constructive discrimination, and know the human rights legislation in your province.

      • Be aware of the need to protect a tenant’s private information. Only collect the information you need, use it only for the reasons stated to the tenant, and keep the information safe.

      • Be aware of the privacy rights of a tenant. Never enter a tenant’s suite without consent (following the tenancy laws of your province) and do not excessively monitor a tenant’s activities.

      Property management books universally tell readers to familiarize themselves with tenancy laws in their area. This book is no different.

      Few landlording books tell you what you need to know about the law. Are you supposed to print out the entire text of the Residential Tenancies Act for your province and memorize it before placing a classified ad? What are the chances of that happening?

      Knowledge of tenancy law will come over time and you don’t have to be a tenancy law expert to be a successful landlord. You will find that for many legal issues, it is more important that you know where to find the answer. For instance, your provincial rental authority’s website will have information about how to obtain a Writ of Possession, the last-resort step in the eviction process. Knowing the precise details isn’t important now, because if you screen your tenant properly you might never need to apply for one.

      However, before you rent out a home, you should know the answers to tenancy law basics like these:

      • Does your province or territory require you to have the tenant sign anything else other than a rental agreement before the tenancy begins?

      • Does your province or territory permit pet and smoking restrictions?

      • What kind of deposits can you collect? Do you collect last month’s rent or a security (damage) deposit? Can you collect extra deposits for pets, keys, and garage remote controls? What about application deposits?

      • Does your province require you to perform a move-in/move-out inspection report with the tenant? What recourse do you have if the tenant refuses to complete the inspection report with you?

      • If your tenant doesn’t pay rent on time, brings in an unauthorized pet or occupant, conducts illegal activity, or harasses neighbours, how do you start the eviction process? In other words, what form do you serve the tenant? Where do you get this form? How should the form be served?

      • Can you charge a fee if the rent is late or if the rent cheque bounces?

      • If the tenant doesn’t pay rent or doesn’t move after you serve them with an eviction notice, what is the next step in the eviction process? What hearing must you apply for and what form must you fill out?

      • When and how can you increase the rent? Does your province have rent controls? Do the rent controls prevent you from freely negotiating the initial rent with the tenant?

      • How much notice must the tenant give you if he or she wants to move out?

      • If you discover damage after the tenant has moved out and if you are permitted to collect a security deposit, what are the rules regarding deducting the cost of the damage from the deposit?

      If you know the answers then you’re probably ready to advertise and begin the renting process. If you don’t know the answers, look in the back of this book where you’ll find websites for the legal resources you need. Your provincial landlord association might have a hotline you could call with questions as well. Some even offer publications — “landlord survival guides” — that detail the ins and outs of tenancy law in your area.

      But what other laws should you be aware of before you place the classified ad? The following summarizes the more significant laws that affect the relationship between a landlord and a tenant.

      Human Rights Legislation

      Every province has some sort of legislation that prohibits landlords from discriminating against tenants. Generally speaking, landlords are prohibited from directly discriminating against tenants on the basis of race, ancestry, place of origin, marital status, family status, lawful source of income, physical or mental disability, and so on. This means, for example, that declining a tenancy on the basis that the applicant has a child is going to land you in a lot of trouble. This should be obvious to any twenty-first century landlord. Discrimination of this kind is never acceptable. It is amateur and it leads to bad business decisions.

      However, what is less obvious to many landlords is a legal concept known as “constructive discrimination.” This refers to a situation where the landlord engages in a practice that does not openly discriminate against anyone, but which leads to the practical result of discrimination.

      One example of constructive discrimination is the use of an income ratio as the sole basis to decline or accept a tenancy. If a landlord requires all of his or her tenants to have an income that is equivalent to, for example, three times the rent and if a landlord declines a tenancy application solely because the tenant does not have such an income, this could be considered discrimination because it guarantees that tenants who receive income from other sources, such as government subsidies, will never be able to rent your property. Landlords cannot decline a tenancy based on a tenant’s lawful income and so this practice of relying exclusively on an income ratio is discrimination.

      The reach of constructive discrimination is somewhat controversial. On one hand, landlords should not be allowed to discriminate, but on the other, landlords have legitimate business interests that they have to protect. In any event, constructive discrimination is the law and it affects you. The best advice I can give you to avoid getting into trouble is to read the website for the human rights authority in your province to see what advice they have for landlords, and also to join a landlord association so that you have access to experienced help in your province.

      Be aware that you can do everything you can to avoid discrimination and still become subject to a complaint from a tenant who is trying to pressure you with a frivolous claim. The chances of this happening are quite low, but the best thing you can do is to be aware of good practices for landlords to avoid discrimination, to keep good records, and to always act in a courteous and respectful manner to all of your existing and prospective tenants.

      Legislation designed to protect personal information

      As a landlord, you are in the privileged position of having access to very personal financial information from tenants and tenant applicants. The typical application form requires a tenant to disclose everything from a social insurance number to the addresses of all of the rental homes the tenant has resided in for the past few years. Not surprisingly, most provinces have laws that require landlords to safeguard information they obtain from tenants. Failing to do so exposes the landlord to sanctions ranging from penalties imposed by the province’s privacy commissioner, to a damages claim from the tenant.

      Again, you should be reviewing your province’s privacy commissioner’s website to see if it has any advice for landlords. Generally speaking, these laws will require