Landlords aren't being paid. Tenants are feeling squeezed. And the system that's supposed to help is broken

Raj Salwan says he is living in a financial nightmare.

Every month, he is slipping deeper and deeper into debt, covering the costs of a condo he owns that's occupied by a tenant who isn't paying and will not leave.

Salwan said his tenant is in arrears of over $34,000. He has had to take out a loan against his own home to cover the mounting costs of the mortgage and utilities.

"I cannot explain the mental agony my family is going through," he said.

Salwan is considered a "small landlord" with just one rental property a one-bedroom condo in Toronto he purchased as an investment property several years ago to prepare for his retirement. His tenant paid rent for the first year, then stopped in February 2022.

Salwan is in a crisis. But so is the provincial tribunal that's meant to help people like him.

A backlog of complaints

Ontario's Landlord and Tenant Board (LTB), the only tribunal responsible for governing disputes between landlords and tenants, has had a backlog that stretches back several years.

An ombudsman report released in May revealed the LTB had over 38,000 unheard cases, with nearly 90 per cent of the complaints coming from landlords. It stated that tens of thousands of Ontarians were being denied justice because of "excruciatingly long" delays. The board, it said,was "fundamentally failing."

Salwan filed a complaint in April 2022, and received his first hearing date in February 2023. But the tribunal ran out of time that day and his case was adjourned. He received his next hearing in August 2023, but his case was thrown out due to a mistake made in the filing. Now he's starting the process all over.

Several years ago, a case like Salwan's would have been in front of an adjudicatorat the LTB within a matter of weeks.

WATCH |Landlord Raj Salwansays bills are piling up because of his non-paying tenant:

Landlord Raj Salwan struggles with unpaid rent

12 months ago

Duration 0:35

Toronto landlord Raj Salwan says he cant even open a recent tax bill on the unit he owns with a non-paying tenant because his debt has become so high.

How did this happen?

The delays had started prior to COVID-19, but thena five-month moratorium on eviction hearings during the pandemicworsened things considerably.

Pandemic measures to protect tenants from eviction many of whom had seen their incomes drastically cut were put in place across most of Canada.

While Ontario's delays are the longest, wait times have been "exploding" across the country since the pandemic, said David Wachsmuth, a McGill University associate professor and Canada Research Chair in urban governance.

He pointed to particularly challenging situations in both British Columbia and Quebec.

"In Quebec, staffing [at the province's rental board, the Tribunal administratif du logement] has actually decreased at the same time as the demand has exploded," Wachsmuth said.

"I wish I could say there's a province doing it well. I don't think I can."

At least in Ontario, there is some explanation. The ombudsman report said there aren't enough adjudicatorsand that the archaic system is so complex that landlords and tenants say they feel trapped without aid.

The LTB told CBCNews in a statement that some application wait times had improved by up to several months, but it is continuing to explore ways to decrease the backlog and support the adjudicators.

"We expect further improvements once the new staff and new adjudicators are hired, onboarded and in place," it said.

The impact of the delays doesn't affectall landlords equally, Wachsmuth said.

"If you're a small landlord and you have one tenant who fails to pay for a few months, that could be catastrophic versus larger companies that operate whole portfolioswhere, fundamentallyyou know, it's a cost of doing business that someone isn't paying rent at any given moment," he said.

Tenants caught in the squeeze

For renters, the delays are hitting them right where they live.

Wachsmuth said tribunals like the LTB are important to enforce the rules that govern rental housing and the obligations of both landlords and tenants.

He said he believes some of the increase in complaints is the result of some landlords who want to capitalize on markets where rapidly rising rents are the norm.

"Landlords are trying to make money by operating rental housing, and you can't necessarily blame them for doing that," he said.

"It's also probably true that when rents are rising the way that they are, there are going to be more tenants who are having trouble paying their rent because it's getting very hard to afford a home in Canada right now."

It really feels like the system that was there for tenants and landlords has just disintegrated. It has fallen apart, there is nowhere to go to get real answers.- Mike Reid, tenant

Mike Reid is a tenant who said he's already been waiting months for a hearing.

He and his family have been living in "chaos" for years. They begged for repairs to be done inside their unit, and when their pleas were finally answered, the results were shoddy work left incomplete for months, holes and dust left all over their home, their front door left wide open with no one inside.

"I feel like they just want us out," he said.

On top of the mess, Reid said he has also faced several above-guideline rent increases in just a few months.

"The option we want to take, getting in front of a judge, we've been told you are looking at a minimum [wait] of 24 months," Reid said.

"It really feels like the system that was there for tenants and landlords has just disintegrated. It has fallen apart, there is nowhere to go to get real answers."

Impact on the housing crisis

Canada is in the midst of a housing crisis with historic low rent availability and a continued rise of short-term rentals across major cities.

"The problems at the Landlord and Tenant Board make the [housing crisis] problem profoundly worse," according to Elaine Page, a paralegal in Toronto.

"My clients are not just selling their properties," she said. "If they are keeping them, they are moving into short-term rentals because they can't deal with what's going on."

Her point is clear: At a time when Canada needs long-term rentals more than ever, small landlords are getting out of the business out of fear of getting caught in a broken system. So they move the properties toAirbnb or other similar sites, where if there is an issue with a tenant, the police can be called.

In Toronto alone, the number of units listed on Airbnb hasgrown by more than 6,000 between Jan. 1 and the end of August 2023, according to Insideairbnb.com. During the same period, the number of publicly listedrental unitshas decreased by about 46 per cent,according to the Ontario Real Estate Association.

Page has worked on cases at the LTB for many years. She said most of her current caseload is made up of landlords desperate for help.

"I have cases with arrears of up to $100,000. It never used to be like this," she said.

Is there a way out?

The ombudsman had over 61 recommendations to resolve the problems. Most include hiring new staff, includingadjudicators and support for adjudicators,as well as simplifying the system.

The LTB has not hired any new staff yetbut says that's coming.

In the meantime, Page said she is going one day at a time and doing her best to help clients through the system.

"It's quite complex, so if you make a single error, like a date or a misspelling of a name on a notice, then your application is thrown out," Page said.

"It's supposed to be user-friendly. You're not supposed to need representation. That's probably the furthest thing from the truth."

Meanwhile, Reid and Salwan and thousands of other landlords and tenants are left to wait for their turn in front of a judge.

"We don't have much choice," Reid said.

Salwansaid he will never be a landlord again.

"It has turned out to be a total nightmare."

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