It’s important for Toronto real estate investors to understand their limits as a landlord, especially if they are new to being a landlord. Landlords have to be careful that they respect the privacy rights of their tenants, especially throughout the tenant application process. Landlords need to follow the regulations set by organizations like the Landlord and Tenant Board (LTB) and the Ontario Human Rights Commission (OHRC) – failure to do so can result in massive financial penalties.
What landlords are legally allowed to ask about during the application process
It’s important to be aware of what the right and wrong questions are. Keeping your question list to only those that are legal will keep you out of hot water, and minimize the chances of you getting involved with the LTB or OHRC for discriminating (whether accidental or not) during the application process. As such, it’s best to avoid any questions that might fall into the area of being questionable and instead focus on what you know for a fact is legally permissible. Here’s what landlords are able to legally ask of their tenant applicants:
- What is your income? – This is an important question to ask in order to ensure that the applicant will be able to reliably pay the rent and cover any additional utilities.
- What is your rental history? – Landlords are legally permitted to ask about rental histories, including the length of rentals and if they have ever rented in the past.*
- Can I run a credit check on you? – In order to find out the extent of an applicant’s financial standing and history, landlords are allowed to ask for consent to run a credit check on applicants – however, consent must first be given.*
- Can you provide me with references from past landlords? – Landlords may naturally be concerned about who they choose to allow to live in their property, and are legally allowed to ask for references from past landlords. Again, consent should first be obtained from applicants before proceeding.
- Can you provide a guarantor or co-signer? – This may be required for applicants who have never rented in the past or who may have an unreliable credit or rental history.**
- Who will be living in the unit? – As the property owner, you have the right to know who will be living in your property and how many people will be living within in.
*The Ontario Human Rights Commission makes it clear that landlords are not legally allowed to hold a lack of credit or rental history against applicants.
** The Ontario Human Rights Commission says that this requirement can only be applied if the same standard applies for all applicants
The biggest question you may be asking yourself is what if a prospective tenant does not pass a credit check, especially if their income is sufficient to cover the cost of the rent each month. The short answer is that you don’t want a tenant with bad credit, but you can’t tell them that is why you are turning them down. In these cases, it is best to let them know that you simply went another way or something equally vague and unincriminating. It is frustrating as you are legally allowed to ask to run a credit check, but can’t cite a bad one as the reason you are turning down a tenant – even if it is.
What you cannot legally ask your applicants about
There are many questions that Ontario landlords are barred from asking applicants – this is because of the anti-discrimination laws that exist to protect tenants from being denied housing. It’s vital that landlords follow the rules and regulations set out by the LTB and OHRC throughout the application process, failure to do so can result in financial penalties, tribunal hearings, and a massive blow to your reputation as a landlord. Here’s what Ontario landlords can’t ask applicants:
- What age/ethnicity/race/gender/sexual orientation are you? – The Ontario Human Rights Commission clearly states that asking personal questions can be deemed as violating an applicants human rights and will be viewed as discriminatory behaviour.
- What religious affiliation do you identify with? – Any questions regarding religious beliefs are restricted.
- Are you pregnant, do you have children, or do you plan to have children? – The OHRC strictly prohibits questions about family status.
- Are you married or single? – Landlords are prohibited from asking questions about marital status, including situations where applicants may have a same-sex partner.
- What is your citizenship status? – Questions about Canadian citizenship or refugee status cannot be asked by landlords.
- Are you on social assistance? – Landlords cannot ask about social assistance – all that needs to be proven by an applicant is whether or not the applicant can reliably make rent and utilities payments.
- Have you ever dealt with the Landlord and Tenant Board? – Landlords are not allowed to ask about previous dealings with the LTB.
- Do you have pets? – Asking about pets is at best currently considered to be a legal gray area by Canadian real estate lawyers, so it’s best to avoid them until the LTB or OHRC makes an official decision about the matter.
- Do you smoke? – While landlords can’t ask applicants about smoking, they are legally permitted to establish non-smoking rules in their rental agreements.
To avoid asking many of these questions, it is best to not make small talk with any prospective tenants. Simply show the property and lay out the terms of the rental agreement. Be pleasant, but don’t get roped into a conversation about anything else except the business at hand.
The importance of effective tenant screening
Effectively screening tenant applicants can be a long and complicated process for Toronto landlords, but it’s important that this process is done legally and correctly in order to avoid the headaches that come with legal problems and renting to bad tenants. The best way to ensure that screening is done effectively and that your Toronto properties are rented to reliable tenants is to enlist the services of an experienced property management firm like Highgate Properties.
Our experienced team of property management experts knows how to legally screen and interview tenant applicants – including how to navigate the legalities of obtaining information from applicants, what red flags to look for during the application process, and how to effectively deal with bad tenants. Hiring a property management company like us gives you access to a responsive team of property managers who will oversee the day-to-day operations of your property, and free you up to take care of the more important things in your life.
For more information about the property management and realty services offered by the experienced team at Highgate Properties, contact us today.