Anyone interested in becoming a landlord in Ontario could learn some lessons from a recent court case which demonstrates how an unscrupulous tenant was able to live rent-free for 18 months.

Rogers Afam Nwabue was the tenant of an  apartment on Howell Square, in Scarborough. On April 1, 2015, he stopped paying rent. After the landlord launched eviction proceedings at the Landlord and Tenant Board, the tenant consented to an order for eviction as of July 31, 2015. In exchange, the landlord agreed to waive rent arrears to June 30.

Instead of moving out as he agreed to do, the tenant applied to the board for a review of the eviction order he had already agreed to. On July 29, 2015, the board refused the request for a review.

In a textbook example of how to delay eviction, the tenant then appealed both orders of the Landlord and Tenant Board to a three-judge panel of the Divisional Court.

The tenant filed the required appeal papers in September 2015, but made no effort to set a hearing date. The landlord’s lawyer sent the tenant letters in February, March and June 2016, but the tenant did not reply.

Finally, in November last year, the landlord filed a request with the court to quash the appeal as “frivolous, vexatious and an abuse of process . . . manifestly devoid of merit and . . . designed for an improper purpose — to remain in the premises without paying.”

The tenant was notified of the November 22 hearing date but did not appear. Incredibly, on that date, the judge refused to quash the appeal but instead set a new hearing date for December 6.

A few days before the new date, the tenant faxed the court to say that the date was inconvenient and conflicted with his exams outside of Toronto.

By December 6, nothing further had been heard from the tenant and the court proceeded with the appeal.
On behalf of a three-judge panel of the Divisional Court, Justice Michael Dambrot dismissed the tenant’s appeal on December 9 and wrote: “It is plain that the tenant was evading contact and avoiding a hearing, particularly in light of the fact that he had been in possession of the apartment rent-free since April 1, 2015.”
The court awarded the landlord costs of $5,000, although the likelihood it can be collected, along with the rent arrears, seems remote given the history of the case.
The court directed the sheriff to give possession of the unit to the landlord “immediately.” In Toronto, the sheriff’s office is typically backlogged and evictions can take weeks or even months.
Names of tenants who do not pay rent are not made public by the Landlord and Tenant Board. This, I believe, contravenes the principle of an open and transparent judicial process and makes it difficult to keep a database of deadbeat tenants.

It is only when tenancy cases wind up in court that the names of the tenants are made public.
The Ontario government needs to take action to prevent scofflaws from getting away with not paying rent for months on end. The solution, I suggest, would be to require tenants to pay rent arrears to the board in order to dispute an eviction application based on nonpayment.

Landlords should always be very careful to check credit, as well as job and landlord references before handing over the keys to a rental unit.

Forewarned is forearmed.


Bob Aaron is a Toronto real-estate lawyer. He can be reached at , on his website, and Twitter @bobaaron2.


February 3, 2017 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 5,188 residential transactions through TREB's MLS® System in January 2017. This result was up by 11.8 per cent compared to 4,640 sales reported in January 2016. Annual rates of sales growth were higher for condominium apartments than for low-rise home types.

January 2017 picked up where 2016 left off: sales were up on a year-over-year basis while the number of new listings was down by double-digit annual rates for most major home types.

"Home ownership continues to be a great investment and remains very important to the majority of GTA households. As we move through 2017, we expect the demand for ownership housing to remain strong, including demand from first-time buyers who, according to a recent Ipsos survey, could account for more than half of transactions this year. However, many of these would-be buyers will have problems finding a home that meets their needs in a market with very little inventory," said Cerqua.

The MLS® Home Price Index (HPI) Composite Benchmark price was up by 21.8 per cent on a year-over-year basis in January. Similarly, over the same period, the average selling price was up by 22.3 per cent to $770,745, with double-digit gains in the average prices for all major home types.

"The number of active listings on TREB's MLS® System at the end of January was essentially half of what was reported as available at the same time last year. That statistic, on its own, tells us that there is a serious supply problem in the GTA – a problem that will continue to play itself out in 2017. The result will be very strong price growth for all home types again this year," said Jason Mercer, TREB's Director of Market Analysis.

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Bank of Montreal’s chief economist finally came out and said on Wednesday what many others have been thinking recently.

“Let’s drop the pretense,” Douglas Porter wrote in a report. “The Toronto housing market — and the many cities surrounding it — are in a housing bubble.”

It's the first time, in years of debate on the issue, that an economist at a major Canadian bank has declared themselves on the side of the bubble-believers.

Porter’s comments came as the Canadian Real Estate Association issued its January numbers, showing Greater Toronto’s benchmark house price rising 22.6 per cent over the past year, to $705,900.

The average price nationwide was $470,253, roughly the same as a year ago. Toronto’s house price gains were offset by declines in Vancouver and Alberta's markets.

"Toronto and any city that is remotely within commuting distance are overheating, and perhaps dangerously so."
— Douglas Porter, chief economist, Bank of Montreal

Toronto house prices are seeing “the fastest increase since the late 1980s — a period pretty much everyone can agree was a true bubble,” Porter wrote.

Porter said that though there are different precise definitions of a bubble, most would agree it’s “when prices become dangerously detached from economic fundamentals and start rising strongly simply because people believe they will keep rising strongly, encouraging more buying.”

Many observers have pointed out that Toronto’s economic and demographic fundamentals don’t justify what has been happening with house prices.

There are fewer people around to buy Toronto homes than usual

This chart from a Royal Bank of Canada report from earlier this year shows the growth in Toronto's adult population is lower than normal.

As Canadian Business noted, Toronto’s population growth between 2011 and 2016 was the slowest it’s been in at least 40 years.

Porter suggested that, despite what the industry is saying, there is little evidence of an overall supply shortage.

“Housing starts in Toronto and Vancouver have been chugging along at almost 70,000 units per year recently, an all-time high, while overall Canadian starts are above demographic demand at 200,000 units in the past year,” he wrote.

Montreal has the same housing "shortage" as Toronto. So why aren't Montreal house prices soaring?

This chart from a Royal Bank of Canada report from earlier this year shows that, on a per-person basis, Montreal is seeing a similar level of new home supply as Toronto, despite Montreal's price growth being modest, and Toronto seeing rapid price run-ups.


“And, we are seeing near-20-per-cent price gains in Toronto condo prices, where supply constraints are not a major issue" Porter continued.

“No, the massive price gains are being driven first and foremost by sizzling hot demand, whether from ultra-low interest rates (negative in real terms), robust population growth, or non-resident investor demand.”

The Bank of Montreal's headquarters in downtown Toronto. (File photo: Getty Images)

In its outlook for 2017, the Toronto Real Estate Board (TREB) predicted another hot year for the city’s housing market.

“As a result of very strong demand for ownership housing up against an extremely constrained supply of listings in 2017, double-digit annual rates of price growth are expected to remain in place for the majority of home types across the GTA.” TREB stated.

It sees the average house price rising another 10 to 16 per cent in the metro area, to between $800,000 and $850,000.