Surana Baptiste represents the little guy. She also represents the biggest landlords in Ontario. And what she finds they have in common is their need for strong representation. As a paralegal specializing in rent collection, that’s what she provides to her clients.
Baptiste has been representing landlords at the Landlord and Tenant Board for more than seven years. As the manager of legal and collections at Suite Collections, she oversees the day-to-day activities of rent collection for current and past tenants or those who seek her expertise. She constantly reviews her team’s procedures to make new ones based on changes in the industry and at the Landlord and Tenant Board.
Her team includes between 30 and 34 employees. Including Baptiste herself, she has four licensed paralegals and approximately 20 collection officers who are licensed with the Ministry of Consumer Protection. They all train and specialize in residential debt collection, so they’re versed with the Residential Tenancies Act.
“We’re basically a one stop shop for landlords that have problems with a delinquent rent paying tenant,” explains Baptiste. “From the time the tenant goes into arrears, which is month one, we usually start the collection process. The first stage is to serve them the info notice. We attend the hearing, get a judgment, the tenant gets a deadline to pay to remedy the situation and we proceed with the eviction. The, if for whatever reason the tenant still owes the landlord money after the eviction, the collections side of our business goes after that.”
For some of her clients, Suite Collections will pursue an eviction from start to finish. For others, it will take over the file only once the former tenant has been evicted and it goes directly to the collections officers.
Up to the challenge
Rent collection is a challenging business, more challenging than other collections specialities because when a tenant is evicted, there is no forwarding address. Often, landlords lack the information necessary to track down an individual. They may have a common name but without specifics, it can be impossible to locate the target in question.
A collection officer’s success is dependent on many factors, according to Baptiste.
“It depends on the geographic location of the building, how old the file is and the type of file we’re given. For example, we have a lot of clients who will give us a file with just a tenant’s name. Unfortunately, there are a lot of tenants who have very common names in Canada, and we are not able to pinpoint that person. We have a lot of files like that (but) now we’re getting better files where people are getting social insurance numbers and a date of birth.”
Skiptracing (locating evicted tenants) is a big part of what Suite Collections does. Baptiste claims she has some excellent skiptracers on her team that are able to locate evicted tenants.
“Once they’re out there, we can find them.”
Once found, the next step is determining whether or not the former tenant can pay – which is usually the challenge. If the tenant went into arrears because he/she lost his/her job, the money will not be available. The individual simply does not have it.
If this is the case, “I’ll tell my clients that they need to hold tight. This file needs to sit for a couple of months, maybe a year or two, until the former tenant gets back on their feet. All our bad debts are reported to Equifax. So, in the event the person gets back on their feet and tries to get a cellphone, house or car, for example, I’ll get a phone call.”
Not all debtors, however, have gone through the process of eviction. Baptiste has found many of her clients are looking for payment from former tenants who left without giving adequate notice. If they were on a one year lease and decided to move halfway through the year without giving the requisite 60 days notice, the file will go to collections and the collector will help recover the vacancy loss.
“Most tenants are ignorant of the fact that they have to give the landlord 60 days notice before they can vacate; they always think it’s 30 days,” says Baptiste. “So, again, the landlord can request that we go after such a tenant to recover the extra 30 days or 60 days rent, depending on how the landlord was able to rent the unit.”
She continues, “When we contact a former tenant, most of our time is spent educating the person on the legislation and the need to give proper notice, and then taking them back to the lease agreement and explaining it to them. In most cases, once the person understands the reason the money is owed, we get the money – if not all of it, a big percentage of it or we put them on a payment plan.”
Finding responsible tenants
For landlords who want to avoid the costly and time-consuming work of chasing down tenants to collect money owed, prevention is the key. Through her years of experience in the business, Baptiste has learned a few tricks and tips to help landlords come out on top.
Baptiste understands that many landlords are doing their best to keep vacancies low but she claims it’s much less costly to keep an empty apartment than to rent it to someone who will habitually overlook their rent when paying bills.
“A lot of landlords try to keep their vacancy under one per cent,” says Baptiste. “It’s sometimes tough because of the economy and a lot of people are now able to buy a house. At the end of the day, though, you have to be careful who you let in.”
Thankfully, it’s getting easier for landlords to find out whether prospective tenants have been delinquent on their rent payments in the past thanks to credit reporting agencies. Any landlord receiving applications should be able to find out whether an individual would make a good tenant.
As well, “we have a good percentage of the landlords (as clients) and because our debts are reported, any tenant that is going to rent an apartment, if they owe a landlord in Ontario money, that landlord will see there’s an outstanding debt with Suite Collection, so they will know – red flag.”
When refusing tenants, however, Baptiste advises landlords not to simply tell them they have not met the criteria to rent a unit in the building. And though screening is an important way for landlords to avoid accepting tenants who will probably have trouble paying their rent, the decision to reject a tenant should be based on more than one factor.
A landlord should not refuse a tenant simply because they’re not employed or they’re on social services. But a landlord can refuse a tenant if it feels the tenant is not able to afford the unit.
“For example, if the (prospective tenant) is unemployed and does not have a source of income, then by all means,the landlord has the right to reject and that’s perfectly fine,” says Baptiste. “But (a landlord) should not use just one thing to make that decision – race, gender, whatever. It should not be one thing.”
On top of mind
One of the mistakes landlords often make when dealing with delinquent tenants is giving them too much time to make excuses before serving them a notice. The system provides tenants with many opportunities to pay overdue rent. So if a landlord does not notify them quickly that the case will go before the Landlord and Tenant Board if payment is not received, the bill will grow substantially throughout the process making it more difficult for the tenant to catch up on late payments.
“If a tenant does not pay April’s rent, for example, and you serve a notice on April 3, you will probably get a termination date of April 23. On April 24, you’re able to file an application with the board.”
Landlords who serve notices on the third of the month are able to file an application with the Landlord and Tenant Board that same month. Those who give tenants more time to try to catch up before serving the notice the next month will be out two month’s rent before the application is even filed.
Baptiste also recommends giving residents reminders that their rent is due.
“Often, with other bills, you get a statement in the mail. With rent, you don’t get a bill in the mail, so I often encourage my clients to give their tenants a ‘friendly reminder’,” she says. “If you check your receivables on the second and find they have not paid, you send them a little reminder.”
Baptiste continues, “And if they do not get it paid on the second or third, on day 15 you give them another reminder.”
Another helpful tip – have a team at the building itself to door knock. When tenants see building staff, they’ll know they haven’t been forgotten. And once a landlord has approached them once or twice, they’ll have rent on the top of their list when writing out their cheques.
Collecting rent is a big and important job that requires a lot of time and effort, according to Baptiste, who says many landlords leave the job to building staff who are often too busy with other issues to give rent collection the attention it requires.
That’s why she recommends landlords get outside help from an agency that is able to monitor receivables because it is a separate job in itself that requires constant attention.
“More and more, I think landlords are realizing that you can’t have the superintendent do it all.”
For some of her clients, only 40 per cent of tenants pay their rent in the first week of the month; the other 60 per cent require active rent pursuit. Some tenants pay their rent in two parts.
“It’s a high number. They use the rent money to do other things because they now know they have until the end of the month to pay,” she says. “So a landlord collects 40 per cent in the first 10 days of the month, and then coming up to day 15 or the second part of the month, it may get another chunk of it. And then maybe 30 per cent or 25 per cent you’ll have delinquent and will be chasing with litigation.”
Landlords are at a disadvantage because the system affords tenants many opportunities to pay the amount owing without consequences – and there are tenants who use this knowledge for their own gain. Baptiste calls these individuals “professional tenants.”
“You have ‘professional tenants’ who know how to play the system. We’ve had tenants that within a year or so, we’ve taken them to court four or five times. And as the ‘sherriff’ comes (to evict them), they hand over their cheque,” says Baptiste. “Since the law changed in 2007, the tenant can pay whatever rent is outstanding before the ‘sherriff’ comes and changes the locks. And the landlord has to accept that money.”
Sophisticated tenants know how the system works
Though not all delinquent tenants are out to play the system, Baptiste and her team at Suite Collections have come across many cases where individuals have found ways to profit from the system’s bias against landlords. She says that approximately five per cent of a good portfolio know the ‘ins and outs’ of the system.
One of the ways tenants can gain the upper hand is to raise maintenance issues in the non-payment application. If a landlord is not ready for such a complication, the adjudicator will put off the hearing for another day – maybe four to six weeks later.
“What we encourage landlords to do before every single hearing is a suite inspection. That inspection will tell you if there’s any outstanding maintenance issues. Also, look at the tenant’s file to make sure there is no outstanding City orders for repairs and, if possible, get the tenant to sign-off.”
Often, at that stage, the tenant will not want to sign any documents. However, if staff members have been in a tenant’s unit, they’ll be prepared to argue their case if a maintenance issue does come up. It’s also a good idea to do an annual suite inspection for the same reason.
“The tenant may have moved in six months ago and destroyed the unit. So it’s really important that you document all the work that is done in the unit (before a tenant moves in) and do the inspections before the hearing.”
Baptiste has seen cases where tenants have destroyed their unit and taken pictures for the adjudicator, claiming they have been living in poor conditions.
Professional tenants may also spend extra time watching public hearings to prepare for their cases and learning what kinds of excuses are effective with a particular adjudicator. A tenant that sees a case where someone is awarded an extra six months to pay off arrears because of bedbugs may use the same tactic to gain time.
“Usually, once (a tenant) says ‘bedbugs’ or ‘mould,’ the pressure is on the landlord to prove otherwise,” says Baptiste. “If a tenant complains about bedbugs, there are a number of treatments that need to be done to rectify the problem. If that is not done, the adjudicator may give an abatement to the tenant.”
To avoid the expense of paying for water and hydro use for a squatter, it’s important to have a process in place to deal with delinquents.
Amie Silverwood is editor-in-chief of Canadian Apartment Magazine.
