The FMTA Position

The FMTA believes that:

• The regulatory strategy be universal – all property owners and managers are to have a license, including not-for-profit housing providers
• The regulatory strategy be self-funded – a fee per unit in a property owner’s portfolio (the more units an owner has, the more expensive the fees – allowing ‘Mom & Pop’ and other small landlords to be regulated)
• The regulatory strategy be proactive – working the same way that restaurant inspections are done
• The regulatory strategy include education for landlords, their agents and staff
• The license be issued to property owners according to the buildings they have – [Ms. Jones has a license to manage 10 buildings]
• If property standards are not upheld, an escrow account is created per building with a licensed property manager to manage it until the repairs are done – [the property owner is not allowed to collect income from that property until the issues are resolved, thereby allowing tenants to maintain their tenancy in a building with outstanding violations]
• Additional license fees or penalties may be imposed on buildings that operate below property standards
• The licensing criteria not be limited to property standards, but include issues raised by the Ontario Human Rights tribunal, for example, a property owner’s duty to accommodate, freedom from discrimination, etc.
• The licensing program include both an online list and an onsite posting of buildings and their license standing (e.g. pass, conditional pass, fail)

Potential Regulatory Systems

Building License

A building license is probably the easiest for the City to implement. The principle behind it is similar to that of a restaurant license – An inspector inspects a building, and the building is issued a pass, fail, or conditional pass depending on how it adheres to property standards. Presumably, a pass would allow the building to operate, and a conditional pass would allow the building to operate if it did the necessary work.

What would be the penalty for a building that received a fail? If we use the restaurant model, the building would be immediately shut down until it conformed to property standards. If a building were shut down (or condemned) what would happen to the tenants? How can the City enforce a violation (or a failed inspection) without putting the tenants at risk?

Escrow Account

One solution to the problem of buildings that fail an inspection is to create an escrow program that operates when there is work to be done on a building. This escrow account would allow the city to collect rent from a sub-standard building and reinvest it in repairs. The escrow account relies on individual buildings being licensed. The penalty for not adhering to the rules of the license is that a building could end up with an escrow held against it, ensuring that the necessary repairs would get done.

            Landlord License

            Licensing landlords conveniently evades the problem of ‘failing’ a building altogether. The model works similarly to a building license, but instead of violations being issued against a building, the violations are issued against the owner or manager of a building. With a landlord licensing program, the repair and maintenance issues in a building are linked to the owner of the property, allowing a building to continue operating even if there is outstanding work.

            The difficulty with licensing property owners arises when a property owner owns more than one building. What would the penalties be for not maintaining a building? Would the landlord have their license revoked? What if the other buildings the property owner owns don’t have any outstanding violations?

For a printable version of our position paper, click here