Delays in resolving issues between landlords and tenants are creating problems in Canada's rental market, one expert said.
David Fleming said the industry is seeing an increase in so-called "cash for keys" deals; renters ask for cash in exchange for moving out and returning their keys.
Some renters facing eviction are using the backlog of cases at the Ontario Landlord and Tenant Board as leverage in these deals, saying they won't bring their case to the board in exchange for a certain amount of money, Fleming said.
In these instances, tenants are refusing to leave the property and are using the eight- to 12-month wait for a hearing as a bargaining tool to get cash, the real estate expert told CTV's Your Morning.
"Then the landlord has to make a decision: 'Do I wait to go to the landlord and tenant board? Or do I buy out the tenant?'" Fleming said. "So what we're seeing specifically in Toronto, is a lot of times the landlords are simply buying out the tenants."
A report from Ontario's ombudsperson in May 2023 shows the backlog of cases has grown to 38,000, taking an average of seven to eight months — and sometimes up to two years — for a hearing to be scheduled.
There are more issues if the landlord is selling the residence, as the buyer is allowed to give notice to vacate, Fleming said.
"If that tenant says, 'I don't care, I'm not leaving, I want to go in front of the LTB,' it could take eight months, and in eight months that buyer has walked away," he said.
In Ottawa, a landlord faced what he called a "nightmare" situation when he was trying to sell his home. He offered tenants $10,000 and a moving truck, but they still refused to leave.
The landlord was attempting to sell the home because his mortgage was coming due and he didn't want to resign with the elevated interest costs.
Daniel Vyner, principal broker at DV Capital, told BNN Bloomberg these deals started increasing in 2023.
They happen most often in rent-controlled condos where the tenants' monthly rent payments "are insufficient" to cover the needs of the investor, he said.
Vyner said this is happening more because investors are being squeezed by higher interest rates.
While Fleming spoke about the problem in Ontario, cash-for-keys-type deals are being seen elsewhere in Canada.
Sherwin Flight, a housing advocate in St. John's, runs the Newfoundland Tenant & Landlord Support group on Facebook, which has more than 27,000 members.
In his province, Flight said cash for keys deals generally fall within two categories.
"(Either) a termination notice has been served by a landlord, and the tenant is disputing the termination through the dispute resolution process," he wrote in an email. "(Or) a new owner purchases a property and wishes to use it for a different purpose, such as living in it themselves. Sometimes, they'll offer cash for keys if a tenant agrees to terminate their fixed-term agreement early."
Flight said, in many cases, landlords don't need a reason to evict a tenant in the province and "just wait it out." While the deals do happen, they’re not as common there.
In some cases, housing court backlogs can also harm renters who are trying to dispute evictions.
A woman in British Columbia was forced out of her unit and had to move into her car. She alleges the landlord did this unfairly and said she is homeless at least until the province's Rental Tenancy Board reviews her complaint.
Rent price increases are also a factor in the rise of tenants refusing to leave. Increased costs of moving and the difficulties of finding vacant units, some look for the backlog to buy more time to save money and search for their next home.
But Fleming said it's unfair to use this as an excuse to break rules surrounding evictions.
"I'm sympathetic, but I don't think that excuses the nature of tenants taking advantage of — in some cases— a cheque for $30,000," he said.
In B.C., landlords have come together to ask the Ministry of Housing to make changes to its tenancy laws.
The province's Residential Tenancy Branch has long wait times, the group's petition read, and landlords said they're "left in a dubious state" with tenants "who are misusing" the system while they wait for resolutions.
In these situations, where resolutions could be months away, Fleming said there's little landlords can do.
"Choose your tenants very carefully," he said. "(Landlords) have to be diligent, they have to be hands on."
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