Unpaid rent could affect tenants’ credit reports in Ontario | Toronto housing crisis

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 Fineparalegal and former Commission adjudicator, explains that credit reporting agencies do not have direct access to the orders of the CLI.

Agencies can view published orders on CanLII, a website managed by the Canadian Legal Information Institute. However, according to Mr. Finethere are often significant delays in the publication of decisions and coverage is incomplete, as the site itself indicates.

In addition, owners can send the orders of the CLI to credit reporting agencies if they want their tenants’ credit scores to be affected by the decision.

In recent years, new websites devoted to disputes between tenants and landlords have also been created, such as Openroom, FrontLobby et Rentcheck.

On its website, the Ontario government states: Ontario is exploring the feasibility of arrangements with one or more licensed consumer reporting agencies to facilitate access to Landlord and Tenant Board orders when tenants have a history of 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 CLIbut that she looked forward to working with the province on this initiative.

Currently, Equifax Canada integrates rental data into consumers’ credit files in accordance with applicable law, including the consent provisiony lit-on.

Tens of thousands of dollars

Alex Solga is a former real estate owner of London who recently sold his rental properties. He says he sold them after dealing with several problem tenants. In addition, the long delays 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.

This would be the most important information a homeowner could ask for he declared. He believes current legislation 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 Roseharthe says he already 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 around 80 housing units in the region London.

M. Rosehart says tenants like this shouldn’t get away with it so easily. [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 cheaper to pay delinquent tenants to move out than to wait for an eviction order from the CLI.

For its part, the London Property Management Association believes such a change would simplify tenant screening 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 possible abuse or unintended consequenceswe read in an email from the London Property Management Association sent to CBC.

One way?

Details of the proposal remain unclear, causing concern 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 said. We have seen many orders overturned by a court, in which the CLI was wrong to make his decision.

He added that long-term damage to a credit score can prevent a person from getting student and business loans or becoming homeowners.

For Mr. Kwan, this is a one-way project.

There is no question of transmitting debts owed by landlords to the credit bureaus, we are only talking about tenant arrearshe declared.

MM. FineKwan, Rosehart and Solga indicated that they would like to see in-depth 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