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CMHC underreporting rent arrears: OLA

Toronto has the most rent arrears in Canada—11% of all units in the metropolitan area reported missed payments—says a Canada Mortgage and Housing Corporation report, but according to the Ontario Landlords Association (OLA), that number doesn’t even scratch the surface.

“The Ontario Landlords Association did internal polling between July and September, and it was rather shocking because over 50% of our small landlords have tenants who didn’t pay rent or didn’t pay full rent during that time,” said OLA member William Blake. “[CMHC] is counting corporate landlords, but its figures don’t include small landlords who rent basement units or duplexes because they’re hard to count. CMHC’s stats are often skewed in the wrong direction because they exclude thousands of small landlords across Canada.”

The crown corporation’s Rental Market Report stated that Canada’s biggest metropolitan area has the largest share of rent arrears—0.92%— which, like Blake, it blames on the COVID-19 pandemic.

“The pandemic disproportionately affected lower paid workers in the hospitality and service sectors,” said the report. “These numbers are reflective of a larger share of population in Toronto relative to the rest of Canada, with a greater concentration of workers in these industries.”

But just as the pandemic caused unprecedented job losses and suddenly upended the lives of many tenants, Blake says the economic fallout has been disastrous for landlords.

“I have a lot of really good tenants who couldn’t pay their rents in full and we worked out payment plans,” he said, “but it’s hard on landlords who only receive 50% of rent payments because they still have to pay 100% of their mortgage, property taxes and maintenance costs.”

The contacted the Ford administration and asked it for aid in the form of rent grants or interest-free loans provided to tenants with precarious incomes so that they could pay their rent, but Blake says it was rejected.

“The tenants wouldn’t be evicted and the landlords could cover their mortgages, and there’s no conflict. This would help the entire industry survive,” he said. “There are a lot of cases of small landlords across Ontario who have not gotten a cent for one year.”

In the absence of government aid, the OLA advises its members to maintain open dialogue with their tenants because the overwhelming majority of rent arrears aren’t .

“Since Day 1, I’ve told my tenants that if they’re having trouble, not to hide it from me and that we could work out a win-win situation,” said Blake. “I had a couple who worked in the bar and restaurant industry and lost hours, so they called me and we worked out a payment plan. When things reopened, they were able to pay me. It’s important to have clear, open communication with tenants because it’s a unique time with COVID.”

About the Author

Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.

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