Rent Strikes Will Hurt Tenants Much More Than Landlords

Summary

The article discusses the potential negative consequences of rent strikes for tenants, suggesting that landlords may actually benefit from eviction protections and the ability to raise rents to market rates after evictions.

Abstract

The author, a landlord, expresses concern over the advocacy for rent strikes during the COVID-19 pandemic, which initially caused worry about mortgage payments and credit scores. However, due to Ontario's eviction moratorium, the landlord realizes that non-payment of rent could lead to evictions and the opportunity to rent out properties at market value, potentially recouping losses quicker. The article emphasizes that tenants engaging in rent strikes could face severe repercussions, including loss of rent control, damaged credit scores, and difficulty securing future housing due to poor references and collection agency reports. The landlord asserts that the intention is not to threaten tenants but to highlight that so-called tenant rights groups may not have tenants' best interests at heart, as the fallout from rent strikes could be more detrimental to tenants than to landlords.

Opinions

The author believes that tenant rights groups advocating for rent strikes may not fully understand or convey the negative impact on tenants.
The landlord initially feared the financial implications of rent strikes but later recognized the potential financial advantage due to Ontario's eviction laws during COVID-19.
The author suggests that evicted tenants would suffer from losing rent control, facing collection agencies, and having a damaged credit score, which could hinder their ability to secure future housing and credit.
The article implies that the landlord values tenant stability and satisfaction, preferring to work out payment arrangements rather than evict.
The landlord criticizes the narrative that rent strikes are an effective solution, pointing out that they could ultimately harm the very people they aim to protect.

Rent Strikes Will Hurt Tenants Much More Than Landlords

When COVID hit, there were many people, who like me, were impacted financially. Across the globe there were a lot of people who lost their source of income, and were trying to find out what options they had.

This rapid increase of unemployment lead to some so called “tenant rights groups” to begin advocating for tenants to stop paying rent and to begin a “rent strike” on April 1st.

Being a landlord this was a little worry-some, in the news and all over facebook I was seeing posts popping up in support of rent strikes, and against landlords. After all, if my tenants stopped paying rents, I wouldn’t be able to make mortgage payments. Not being able to make mortgage payments could ruin my credit report, and could erase the years of hard work that went into accumulating rental units.

At first glance I saw this and was worried about what it would mean for myself; but after a few days of worry I realized something — if all my tenants stopped paying rent I would actually be better off.

Before I continue, I should point out that none of my tenants took place in any rent strikes, and after working out options with a couple tenants to allow rent to be paid a couple weeks late, or for them to use their last month’s deposit towards April’s rent, all my tenants paid their rent in April and May. I don’t ever want to have to remove a tenant from a property because I do believe it is their home, and I want to let them stay as long as they would like.

Why Would I Have Been Better Off?

It is hard to believe, but had my tenants stopped paying rent, I would have been better off. The way the laws stand in Ontario during COVID is that no tenant can be evicted due to non payment of rent during the state of emergency. This means that tenants could potentially go without paying rent for 3–4 months before I could apply for an eviction. Once COVID ends, I would be able to apply for an eviction unless the tenants were able to pay the back rent before the proceedings. — In the case of most people this would be an impossible task. So if I handed a rent-striking tenant an eviction notice they would be forced to leave.

The thing is, most of my properties are rented way below market value. Due to rent controls the tenants living in the units in most cases are paying between 50% and 60% of market rent. If a tenant was to leave I would be able to increase the rent and make back any money I lost in under a year.

In Ontario you can also send a collections agency after a tenant for unpaid rent, so there is a chance that even after the eviction I would be able to recoup the lost months of rent.

Why Tenants Would Suffer?

Tenants who have been renting for over a year have rent controlled units, meaning that their rent can only be increased by a small percentage each year. If a tenant was to be evicted for non-payment of rent, they would lose their rent control and could end up having to pay more, in some cases maybe double or triple what they are currently paying.

While non payment of rent isn’t a criminal offence, you can still send the rent bills to a collection agency. This means that if a tenant refuses to pay, it would show up on their credit score, tanking it and making it hard for them to qualify for credit cards, loans, or mortgages in the future.

Tenants would lose their references. When you apply for a rental unit almost every landlord will ask for your last two landlord’s contact information for references. If you can’t provide this, chances are you will lose out to someone else.

Wrapping Up

I don’t want this to sound anti-tenant, or for this to sound threatening to tenants. I want my tenants to stay in their homes and be happy. I think most good landlords do too. What I want is for tenants to realize that these anti-landlord groups that pretend to be “tenant rights groups” don’t always have their best interest in mind.