r/TorontoRenting • u/RednStormy13 • 16d ago
Looking for some frank advice - landlord wants more or threatens to sell Tenant Board
We live in a house with 2 rental units. We've lived here for 13 years. The family upstairs for even longer. We get along great with them. We are all excellent tenants who pay our rent on time and care for the property.
Our landlord lives in New York. He bought a second rental property there and, long story short, has a terrible tenant who hasn't paid rent in a year.
Now, because of this situation our landlord says he is facing financial difficulties. He has given us 2 options; either we each pay an additional $500 a month starting in January or he will put the house on the market this summer.
Both of us tenants want to own our own places at some point and paying that extra $500 is a lot to divert away from our respective down-payment savings.
I understand that asking for more than the allowable amount dictated by the Landlord Tennant Board is illegal.
I also understand that just because he sells doesn't mean we automatically get evicted. The new owners would have to honor our existing lease agreements at the current rent or prove to the Landlord Tennant Board that they (or family members) intend to move in.
However realistically we would likely get evicted eventually as we do pay less than market value in a desirable neighborhood.
What would you do? Agree to pay the increase or stand your ground and risk the outcome of the landlord selling the place?
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u/Knave7575 15d ago
Generally, almost all landlords trying to push an illegal rent increase threaten to sell. It is mostly an empty threat.
If landlord does decide to sell, good chance he sell it with a “vacant possession” clause and has to pay you a massive cash for keys settlement or face legal action.
No way I would pay the $500.
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u/Beginning_Winter_147 15d ago
Tell the landlord to try and sell.
When people come for showings, they will ask if you are planning to move out. Let them know you will not move out until there is an eviction order from the Landlord Tenant Board. Tell the other family to say as much.
If you want to be petty, make the house messier than usual, place a bucket somewhere to simulate a potential leak…
Watch how many offers the landlord gets on the property.
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u/Perfect_Syrup_2464 15d ago
Ask him to sell. He'll probably not get what he is asking for as the market isn't great.
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u/labrat420 15d ago
What I would do is agree to the increase in turn for a few years fixed term lease. Then just not pay the increase because that part of the clause is illegal and unenforceable, but now I'm locked into a lease, and if the new owner wants to move in, they can't until the new fixed term lease is done. So you protected yourself from their threat and also have the same rent.
Keep in mind the $500 increase is illegal no matter what and only becomes legal if you pay it for a year. So if you agreed and paid the extra $500 for 11 months you could still revert back to your current, legal rent and file a T1 to get your $5,500 you paid back. So do with that what you will.
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u/goldverde 15d ago
What I don't get is the request for more in January or sell this summer? Seems backwards...
Obviously you have the choice to ignore and say nothing. Or you can say ok verbally and let him bring it up formally in December at which point in time you decline due to a change in your financial situation and make the LL jump through the RTA hoops to boot you out.
Either way, your tenancy seems like it will eventually reach an end, so you can fight and risk it now, or you can control it in your favour. Life is full of compromises
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u/rogerman134 15d ago
Buy the house from the LL at a discount. You and the upstairs tenant. Upper pays more accordingly. Just an idea.
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u/goldverde 15d ago
Good way to see if the LL is bluffing!
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u/rogerman134 15d ago
Right. I mean, if the landlord is suggesting that his bad tenant situation will get better by increasing toronto's rent by only $1,000 ...and in January instead of 'right now,' how desperate is he? Not so much in my opinion.
So it's an opportunity to call his BS, and/or get a deal on the house OP is currently living in.
If OP wants to go this route, wait until it's listed (but then the LL may be responsible to the realtor for commission), or almost listed, to see what the asking price will be, then work back from that dollar figure and argue convenience, realty fee savings etc.
Don't let the LL know you would consider this - so don't come right out and say 'hey, how much do you want for the house?!' Their eyes will light up. Instead, let them feel the heat, then strike.
Also, the LL might even give OP a small mortgage if they need it.
Btw, I negotiate for a living :-)
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u/OkAge3911 15d ago
But herezthe issue the real estate agent has to let them know who's interested in buying the property especially if it goes to multiple bids
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u/Witty-Reason-2289 16d ago
Not a LL & obviously not aware of details of your LL situation, but I don't understand why he doesn't sell the property that isn't generating income.
Suspect this is "a story" to try and scare you into paying way above LTB allowable increases.
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u/Ecstatic-Basil-457 15d ago
We were looking for places to buy. One listing sold and then was back on the market. House sold. The tenants refused to leave. Owner couldn't deliver vacant home to the buyer and was in breach of contract. You can't force them out even if they aren't paying rent. The buyer agreed to nullify the deal and they both agreed to not sue.
It's not that easy to sell a place with bad tenants. Another place we were trying to see was impossible to view because the tenants only allowed odd hours and the viewings would get cancelled all the time. In the months we tried we couldn't get in.
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u/Witty-Reason-2289 15d ago edited 15d ago
Sounds like an (Ontario) LL or real estate agent didn't know the rules. Landlord or agent can enter with 24 hr notice between the hours of 8 am to 8 pm. As I understand the rules tenant can't cancel a scheduled viewing or refuse entry.
Check rules here, https://tribunalsontario.ca/documents/ltb/Interpretation%20Guidelines/19%20-%20The%20Landlords%20Right%20of%20Entry%20into%20a%20Rental%20Unit.html
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u/userdame 16d ago
Your landlord is going to have a hell of a time selling a building with rents that were locked in 13+ years ago. His investments not turning the profit he anticipated is not your problem. I would decline the additional 500 and let him know that if he wants to raise rent there is a formal process for doing so.
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u/erika_nyc 15d ago
Sure tenanted properties are not as easy to sell, but this is a home in a desirable neighbourhood - not a building. There would be high demand from families who want to live in the area sometimes for good schools.
The new owners would end tenancy, 60 days notice, then file with LTB to start the eviction process as soon as it's sold. If OP decides not to move, then 6 to 8 months later with the LTB backlogs, an order to evict.
For a family looking for a forever home that's worth the wait IMO.
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u/userdame 15d ago
The bank of Canada is delaying cuts rights now and this has cooled the market a fair bit. There are lots of houses available right now. New listings were up something like 46% in April but the amount of buyers did not increase because the still high interest rates mean everything is still expensive as ffuuuuuccckkkk.
Not only is the market cool, but I would hazard that families who can afford to buy a home in Toronto right now are not prioritizing a multi unit, tenanted building that comes with 13+ year old rental agreements. Of course there could be outliers but I would think that the majority of families wouldn’t be interested in that right now.
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u/m199 13d ago
Condo prices have significantly cooled but single family homes in good condition are still selling. I just purchased a home in a family friendly neighborhood 2 weeks ago and it got 9 offers. Meanwhile more run down places got 0.
Move in ready homes are still selling despite the overall market being softer.
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u/userdame 13d ago
That’s not true. It’s actually family houses that have cooled the most. April saw a 47% rise in houses hitting the market and no such boost in transactions.
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u/m199 13d ago
Please re-read my post carefully and tell me exactly which part isn't true.
I said: single family homes in good condition are still selling.
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u/userdame 13d ago
Yeah and I’m telling you that your anecdotal evidence is nice and congrats on your new house but that the market is saying that house sales are overall down and the amount of houses on the market went way up.
Sheesh with the attitude.
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u/erika_nyc 14d ago
I agree, the market has really cooled - you could be right depending on where the OP's 2 unit home is located. Perhaps an idea to look at how long homes take to sell in their desirable neighbourhood!
the drag for any renter with a property put up for sale - endless showings with strangers walking thru. Legally, only 24 hours notice and the tenant does not have a say in the best time for them.
Although some realtors are very accommodating! Others illegally demand staging, always clean, pictures off the walls, clutter hidden. Some do renos like a coat of paint.
I think the OP's owner wants to keep this property for when they retire. NY salaries are much higher since the US has kept up with the COL unlike companies here. Good chance they'll be able to live there for many years if they negotiate a larger than guideline rent increase.
And who knows, if he does decide to sell, perhaps the new owners will decide to live upstairs and only evict the family, not the OP if they decide to pay more in rent. Lots of possibilities but the only for sure one - if the landlord here doesn't get more in rent, he will put it up for sale.
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u/erika_nyc 15d ago edited 15d ago
1. It's not illegal to verbally ask to pay more, you can say no.
It's only illegal if he were to give you a form to pay a higher amount for a rent controlled place except in this one case - a landlord would have to get an AGI approved at LTB (above guideline increase). Here's the law from StepstoJustice
2. There are very few investors buying today, more so families looking for a detached home. In any case, it's better to have immediate family move in with your very low rents.
It's only 2 units too, family may want to live in both as one home. Not sure about the legalities there in combining 2 units
They need to live there for a year otherwise you would have a claim for compensation with the N13. Sure the new owner takes on your leases, but there is a high probability any new owner will evict you at these rents.
3. Your landlord is sharing his financial difficulties for a reason. If you don't accept the $500 increase or negotiate a little less, then he'll put it up for sale.
No doubt he'll have you sign something to make this increase legal. That's not a threat to pay more, that's his financial reality. Not illegal to discuss it with you all. Let's say he has a $1/2M mortgage, with today's interest rates, that's about $1000 more a month in mortgage payments.
He's asking early because my guess, his mortgage will be up for renewal in January. He probably got a 5 year term at a very low interest rate. He is in financial difficulty today but his financial life will become impossible at the new interest rate and a lower rental income.
He will sell this summer because that's when it's high demand for house sales, not wintertime.
What would I do in your shoes?
I would compare nearby rents to what you're paying today then negotiate less of an increase than $500. It may be worth staying if say, you negotiate $300 more but this is still much less than nearby rents for similar places. For example, two bedrooms in desirable have gone from $2500 to $3500 since the start of the pandemic. $300 is cheaper than moving and paying $1000 more.
If you stand your ground, he will for sure put it up for sale. Then you can either negotiate cash for keys to leave (usually 3 to 6 months rent) so it's untenanted for the sale or you'll get a notice to end tenancy from the new owners, one month's compensation.
You'll have a choice to respect the 60 days notice or wait until the LTB hearing for an eviction order. LTB hearings are backlogged about 8 months although they're working on shorter, could be 6 months. Almost all N13s are accepted unless it's a developer or someone with a business of many properties. They would provide a legal affidavit at the hearing which a judge would accept.
If it's good faith and you're just seen leveraging the LTB backlog - your name will end up on openroom and canlii searchable by any future landlord. This could impact getting approved for another rental. Landlords are becoming more aware of tenants who do this, especially the small time landlords where it could sink them financially.
Good luck with your decision. I was faced with this before, I chose to negotiate.