Posted by Dan McIntyre on 9/8/2009, 1:42 pm, in reply to "Landlord Licencing"
Here is the position paper from 2007 when the consultation process started.
A Regulatory Strategy for
Multi-Residential Rental Properties
Background
For many years, the FMTA has been interested in developing a method for the City of Toronto to proactively monitor property standards in residential buildings. In our view, the most cost-effective and reasonable way of achieving this is by creating a licensing system for landlords, apartment buildings, or a combination of the two. Our goal is to ensure the fair treatment of tenants in Toronto while enforcing their right to good health and safety of tenants. Most businesses require a license in order to operate, and the idea of licensing rental properties is not new. If a hotdog vendor must be licensed in order to sell a hotdog, a landlord ought to be licensed to provide housing.
In late December, the City of Toronto’s Municipal Licensing & Standards began a consultation process for creating a “Regulatory Strategy for Multi-Residential Rental Properties”. The FMTA is eager to participate in the process of creating a regulatory strategy and we recognize the need for a comprehensive position.
Potential Regulatory Systems
Building License
A building license is probably the easiest for the City to implement. The principle behind it is similar to that of a restaurant license – An inspector inspects a building, and the building is issued a pass, fail, or conditional pass depending on how it adheres to property standards. Presumably, a pass would allow the building to operate, and a conditional pass would allow the building to operate if it did the necessary work.
What would be the penalty for a building that received a fail? If we use the restaurant model, the building would be immediately be shut down until it conformed to property standards. If a building were shut down (or condemned) what would happen to the tenants? How can the City enforce a violation (or a failed inspection) without putting the tenants at risk?
Escrow Account
One solution to the problem of buildings that fail an inspection is by creating an escrow program that operates when there is work to be done on a building. This escrow account would allow the city to collect rent from a sub-standard building and reinvest it in repairs. The escrow account relies on individual buildings being licensed. The penalty for not adhering to the rules of the license is that a building could end up with an escrow held against it, ensuring that the necessary repairs would get done.
Landlord License
Licensing landlords conveniently evades the problem of ‘failing’ a building altogether. The model works the similarly to a building license, but instead of violations being issued against a building, the violations are issued against the owner or manager of a building. With a landlord licensing program, the repair and maintenance issues in a building are linked to the owner of the property, allowing a building to continue operating even if there is outstanding work.
The difficulty with licensing property owners arises when a property owner owns more than one building. What would the penalties be for not maintaining a building? Would the landlord have their license revoked? What if the other buildings the property owner owns don’t have any outstanding violations?
Current Activities
On February 1st the FMTA met with members of ACORN and the Parkdale Tenants’ Association (with the support of the Tenant Action Group). We have formed a coalition of tenant advocates and activists whose goal is to create a strong tenant voice for the regulation of landlords and the promotion of a proactive monitoring system. We have agreed to mutually support a strong monitoring system without necessarily having a particular system in mind. The point is to be for some kind of licensing program.
[Our concern is that in their new ‘consultation’ process, the City loses sight of fact that a regulatory strategy is intended to protect tenants and allow Municipal Licensing & Standards to proactively inspect and, more importantly, enforce property standards violations.]
The FMTA Position
The FMTA believes that:
o The regulatory strategy be universal – all property owners and managers are to have a license, including not-for-profit housing providers
o The regulatory strategy be self-funded – a fee per unit in a property owner’s portfolio (the more units an owner has, the more expensive the fees – allowing ‘Mom & Pop’ and other small landlords to be regulated)
o The regulatory strategy be proactive – working the same way that restaurant inspections are done
o The license be issued to property owners according to the buildings they have – [Ms. Jones has a license to manage 10 buildings]
o If property standards are not upheld, an escrow account is created per building with a licensed property manager to manage it until the repairs are done – [the property owner is not allowed to collect income from that property until the issues are resolved, thereby allowing tenants to maintain their tenancy in a building with outstanding violations]
o Additional license fees or penalties may be imposed on buildings that operate below property standards
o The licensing criteria not be limited to property standards, but include issues raised by the Ontario Human Rights tribunal, for example, a property owner’s duty to accommodate, freedom from discrimination, etc.
o The license include an online list of buildings and their license standing (e.g. pass, conditional pass, fail)
--Previous Message--
: During the past week a lot of us did the
: following
:
: - got a haircut
: -got a manicure
: -ate out in a restaurant
: - went to a bar and had a drink
: -took a taxi
: -had a hot dog at a hot dog stand
: -had a massage
: -walked in the labour day parade with
: electricians and carpenters
: - had a prescription filled
: -talked to a real estate agent
: -dealt with a para legal or a lawyer
: - drove a car
: - paid rent to a landlord
:
: The only matter that was not with some one
: who was licenced was paying rent to our
: landlord.
:
: The FMTA and other tenant groups have
: proposed an inexpensive licencing scheme to
: the City.
:
: This will give a sanction against those
: landlords who do not take their
: responsibilities properly, with the most
: serious non maintenance. The monies raised
: will pay for a virtual doubling of
: pro-active property standards inspectors.
: It will help groups help tenants, and it
: would replace the need for other programs.
: More people would have paying jobs.
:
: The cost? A mere 2 bucks a month per
: apartment.
:
: Right now tenants pay the highest rate of
: taxes, yet unlike every diner in town, we do
: not know whether our apartments have been
: routinely inspected to ensure they meet
: health and safety and maintenance standards.
:
: Ironically, once all landlords get the
: message that the City will pro-actively
: enforce property standards, there will be
: fewer who will flaunt the rules. We would
: not only be able to "dine safe",
: we can "rent safe"
:
: This years multi residential apartment blitz
: has found thousands of deficiencies in just
: over 100 buildings. There are over 4300
: multi residential apartment buildings in
: Toronto. Of course, we will also continue to
: seek a fairer tax regime for rental
: properties.
:
: And if you want a different reason - try
: these - Why are landlords so scared of it?
: Hot dog vendors pay a licence fee, and can
: expect to see a city inspector 3 or 4 times
: a year. Landlords are afraid of seeing an
: inspector once or twice a year?
:
: And why can we only buy a house through a
: licenced real estate agent, but we can rent
: a house from any one? Just wondering.
:
: We have published a discussion paper and I
: will try to get it re-posted to our web site
: (seemed to get lost in the transition. The
: FMTA first called for licencing in 2002.)
:
:
:
:
Message Thread:
« Back to thread