Ontario eyes giving credit bureaus access to LTB orders for renters with history of arrears

A proposal to make Landlord and Tenant Board (LTB) orders accessible to consumer credit bureaus for tenants with a history of rent arrears would make it easier to weed out bad prospective renters, London, Ont., landlords say.

Renters' advocacy groups worry it could hurt low-income tenants who fall behind by damaging their credit scores and unfairly penalize tenants who withheld rent for negligent maintenance or other issues.

The Ford government revealed the plan in a media backgrounder issued Wednesday as it tabled the Cutting Red Tape, Building Ontario Act as part of a larger omnibus package.

"Ontario is exploring the feasibility of arrangements with one or more registered consumer reporting agencies to facilitate access to Landlord and Tenant Board orders where tenants have a history of missed payments," it reads.

It would also "enhance online information about rights and responsibilities" of consumer reporting and collection agencies.

Unless submitted by a landlord following an eviction, credit reporting agencies don't have a direct way to access LTB orders, said Harry Fine, a paralegal and former LTB adjudicator. LTB orders may not be included by default in credit checks landlords perform.

The agencies can access LTB orders posted to CanLII, a website run by the Canadian Legal Information Institute, but Fine said decisions are often significantly delayed, and coverage is incomplete, something the website itself notes. 

Landlords can submit LTB orders to credit reporting agencies, but only if they have a membership in one, Fine said. Alternatively, they can upload them to websites such as Openroom.

Rent payments can also be submitted by landlords through services like FrontLobby, which are shared with the Landlord Credit Bureau and Equifax. The tenant has to consent for on-time payments to be submitted if they do not owe money.

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Most LTB cases involve rent arrears, but most eviction applications for non-payment don't end with an eviction, even if granted, Fine said, so orders may paint an incomplete picture.

"If the tenant pays following the decision, the tenant stays. The province doesn't know who's evicted. The province … only knows who's been ordered to pay."

Details on the proposal remain murky, and no further information has been made available. CBC News contacted the Ministry of the Attorney General, the LTB, and TransUnion, but received no responses by publication.

In a statement, Equifax said it doesn't receive information from the LTB, but looks forward to working with the province on the initiative.

"Currently Equifax Canada is ingesting rental data into consumers' credit files, in compliance with applicable legislation including consent provision," they said.

Douglas Kwan, director of advocacy and legal services at the Advocacy Centre for Tenants Ontario, worried that it would "open up the taps" to credit bureaus if implemented.

"If there's an appeal of an order, what happens to that initial referral to TransUnion or Equifax?" he said, adding a two to three-year referral delay would be preferred.

"We've seen many orders overturned by the court, in which the LTB was wrong in making their decision."

He added long-term damage to a credit score can prohibit one from obtaining school and business loans or becoming a homeowner. It could also hurt low-income tenants if rent were to rise significantly or if they lost rent subsidies.

"It doesn't talk about referring debts owed from landlords to tenants to credit reporting agencies, it only speaks to tenant arrears," he said. "It really harms the reputation of the LTB as a neutral body."

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Some current and former landlords CBC News spoke with praised the idea, including Alex Solga, who sold his rental properties during COVID-19, frustrated with problem tenants and long delays at the severely backlogged LTB.

"That would be the most important information a landlord could ask for," he said. He believes current legislation protects bad tenants, saying the eviction process is "extremely painful."

"The process to get your money back is impossible … You can go after them in small claims, but you're never getting a dime, especially if they owe you $18,000-$20,000."

Mike Rosehart, who oversees about 80 London-area units, recalled one tenant who went 15 months in arrears and claimed to have done the same with other landlords.

"They'll shut your gas off if you don't pay. But a landlord doesn't get paid, no one cares. It's not criminal, nothing happens," Rosehart said. He said it was cheaper to pay delinquent tenants to move out than fight.

In a statement, the London Property Management Association said the change would streamline tenant selection and reduce risks of non-payment.

"However, we believe it's essential to implement this initiative in a way that respects tenant privacy and ensures accuracy in reporting to avoid potential misuse or unintended consequences."

Fine, Kwan, Rosehart and Solga indicated they would like the LTB to be reformed. Wait times have improved from a year ago but still range from four to six months on average, Fine said.

The agency had 53,000 unresolved cases in early 2023, according to a Toronto Region Real Estate Board report.