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Raj Salwan says he is living a financial nightmare.
Every month, he goes deeper into debt, covering the costs of a condo he owns that is occupied by a tenant who won’t pay and won’t leave.
Salwan said his tenant has arrears of more than $34,000. He has had to take out a loan on his own home to cover the rising costs of the mortgage and utilities.
“I can’t explain the mental agony my family is going through,” he said.
Salwan is considered a “small landlord” with just one rental property: a one-bedroom condo in Toronto that he purchased as an investment property several years ago to prepare for his retirement. His tenant paid rent for the first year and then stopped doing so in February 2021.
Salwan is in crisis. But so is the provincial court that must help people like him.
An accumulation of complaints
Ontario’s Landlord and Tenant Board (LTB), the sole court responsible for regulating disputes between landlords and tenants, has had a backlog stretching back several years.
A Ombudsman report published in May revealed that the LTB had more than 38,000 unresolved cases, with almost 90 percent of the complaints coming from landlords. He claimed tens of thousands of Ontarians were being denied justice due to “unbearably long” delays. The board, he claimed, was “fundamentally failing.”
Salwan filed a complaint in April 2021 and received his first hearing date in February 2022. But the court ran out of time that day and his case was adjourned. He received his next hearing in August 2023, but his case was dismissed due to a filing error. He is now starting the process again.
Several years ago, a case like Salwan’s would have been before an LTB judge within weeks.
Toronto landlord Raj Salwan says he can’t even open a recent tax bill for the unit he owns with a non-paying tenant because his debt has become so high.
How did this happen?
Delays had started before COVID-19, but then a five-month moratorium on eviction hearings during the pandemic made things considerably worse.
Pandemic measures were taken to protect tenants from eviction (many of whom had seen their incomes drastically cut). put in place in most of Canada.
While Ontario’s delays are the longest, wait times have “skyrocketed” across the country since the pandemic, said David Wachsmuth, an associate professor at McGill University and Canada Research Chair in Urban Governance.
He noted particularly difficult situations in both British Columbia and Quebec.
“In Quebec, staffing [at the province’s rental board, the Tribunal administratif du logement] has actually declined at the same time that demand has skyrocketed,” Wachsmuth said.
“I wish I could say there is a province that is doing well. I don’t think I can.”
At least in Ontario, there is some explanation. The Ombudsman’s report says there are not enough judges and the archaic system is so complex that landlords and tenants say they feel trapped without help.
The LTB told CBC in a statement that some application wait times had improved to several months, but it continues to explore ways to decrease the backlog and support adjudicators.
“We expect further improvements once the new staff and new judges are hired, onboarded and in place,” he said.
Canada is in the midst of a housing crisis and experts warn that current problems at the Ontario Landlord and Tenant Board could be making the situation worse. (Breaking:)
The impact of the delays does not affect all homeowners equally, Wachsmuth said.
“If you’re a small landlord and you have a tenant who doesn’t pay for a few months, that could be catastrophic compared to larger companies that operate entire portfolios where, fundamentally, it’s a cost of doing business for someone not to pay rent in any time,” he said.
Tenants trapped in the crisis
For renters, the delays are affecting them right where they live.
Wachsmuth said courts like the LTB are important in enforcing the rules governing rental housing and the obligations of both landlords and tenants.
He said he believes part of the increase in complaints is the result of some landlords wanting to capitalize on markets where rapidly rising rents are the norm.
“Landlords are trying to make money by operating rental housing and you can’t necessarily blame them for doing so,” he said.
“It’s also likely that when rents rise the way they do, there will be more tenants who will have trouble paying rent, because right now it’s becoming very difficult to afford a home in Canada.”
It really feels like the system that existed for tenants and landlords has just disintegrated. It has collapsed, there is nowhere to turn for real answers.– Mike Reid, tenant
Mike Reid is a tenant who said he has been waiting for a hearing for months.
He and his family have lived in “chaos” for years. They begged for repairs to be made inside their unit and when their pleas were finally answered, the results were poor: the work was left incomplete for months, holes and dust were left throughout the house, the front door was left wide open with no one inside.
Toronto renter Mike Reid recorded a home video after the management company made repairs to his home but did not finish them.
“I feel like they just want us out,” he said.
In addition to the disaster, Reid said he has also faced several rent increases above the guidelines in just a few months.
“The option we want to take, appearing before a judge, they have told us that it is a minimum [wait] 24 months,” Reid said.
“It really feels like the system that existed for tenants and landlords has just disintegrated. It’s fallen apart, there’s nowhere to go to get real answers.”
Impact on the real estate crisis
Canada is in the midst of a housing crisis with historically low rental availability and a continued rise in short-term rentals in major cities.
“The problems at the Landlord and Tenant Board make the [housing crisis] the problem is much worse,” according to Elaine Page, a paralegal in Toronto.
“My clients don’t just sell their properties,” he said. “If they stay with them, they move into short-term rentals because they can’t deal with what’s going on.”
His point is clear: at a time when Canada needs long-term rentals more than ever, small landlords are getting out of business for fear of being trapped in a broken system. They then move the properties to Airbnb or other similar sites, where if there is a problem with a tenant, the police can be called.
In Toronto alone, the number of units listed on Airbnb has increased by more than 6,000 between January 1 and the end of August 2023, according to Insideairbnb.com. During the same period, the number of publicly traded rental units decreased by approximately 46 per cent, according to the Ontario Real Estate Association (OREA).
Toronto paralegal Elaine Page represents landlords who have arrears of up to $100,000 from non-paying tenants. (Li Yanjun/CBC)
Page has worked cases at the LTB for many years. She said the majority of her current cases are made up of homeowners desperate for help.
“I have cases with arrears of up to $100,000. It’s never been like this before,” he said.
Is there a way out?
The Ombudsman had more than 61 recommendations to resolve the problems. Most include hiring new staff, including judges and support for judges, as well as streamlining the system.
The LTB hasn’t hired new staff yet, but says that’s coming.
In the meantime, Page said he will take it day by day and do everything he can to help customers through the system.
“It’s quite complex, so if you make a single mistake, like a date or a misspelling of a name on a notice, your application is thrown out,” Page said.
“It’s supposed to be easy to use. It’s supposed to not need representation. That’s probably the furthest thing from the truth.”
Meanwhile, Reid and Salwan and thousands of other landlords and tenants must wait their turn before a judge.
“We don’t have much of a choice,” Reid said.
Salwan said he will never own property again.
“It’s turned out to be a total nightmare.”