Legal Framework Canada

Legal Framework For Rent Reporting In Canada

Summary1
 

FrontLobby provides a cloud platform for landlords and property managers to screen potential tenants, manage their tenancies, and a portal service to enable landlords, property managers and tenants to report rental history, including debts, to credit and consumer reporting agencies (commonly known as Credit Bureaus) when desired (the “Platform”).

Under Canadian Provincial and Federal law, landlords, property managers and tenants can report rental history (positive and negative) using the Platform. As long as the information reported is accurate, the Platform has numerous automated protections and guidance in place which help ensure our landlord, property manager and tenant members are protected and that reporting and usage of the different services remains in compliance with relevant legislation.

Here is how reporting rental history works:

For a tenant who has given consent, reporting to Credit Bureaus may occur if the reporting function is activated. Consent must be provided by the tenant logging into the Tenant Portal, verifying identity, reviewing the Lease Record, and then manually checking the consent checkbox.

For a tenant who pays on-time and does not owe money, but has not given consent, landlords may use the Platform for their internal recordkeeping and management purposes. If the landlord activates the option, then the tenant will have the choice to opt-in by consenting to receive the benefits of reporting to Credit Bureaus (e.g. improved Credit Report, positive Tenant Record). If such tenant does not opt-in by consenting, the landlord may still maintain a Lease Record using the Platform. As long as the tenant does not owe a debt, such Lease Record will remain in the control of the landlord and only be used for the landlord’s internal recordkeeping and management purposes and not shared.

For a tenant who does not pay rent when owed and thus owes a debt, applicable legislation enables landlords to report that debt without notice or consent under an approved purpose (e.g. to collect the debt). Late payments may be immediately reflected on the Lease Record and upon a debt being owed for 30+ days the debt may be shared with Credit Bureaus.

FrontLobby provides free Legal Defence for members. FrontLobby will handle the defence and cover the costs if there is ever a complaint. See Legal Defence for details and applicable terms and conditions.

FrontLobby’s constant goal is customer protection and compliance. Please ensure the information you report is 100% accurate. If accuracy is in doubt, do not report it. FrontLobby handles the protection of all individuals and the security and accuracy of information processed using the Platform with the utmost priority. Misuse of the Platform will not be tolerated.

The Details
 

Responsible Tenants Benefit From Using FrontLobby:

FrontLobby provides significant benefits for our tenant members. Tenants can finally build credit by paying rent and create a Tenant Record to help them receive priority for future housing. Even if a tenant is having financial difficulty, as long as they communicate with their landlord and create a reasonable payment plan, they can still receive the same benefits.

Rent is many consumers’ largest single monthly payment, but to their detriment it is rarely reflected on their credit report:

  1. FrontLobby facilitates tenants to positively impact their credit reports through the inclusion of rent payments.
  2.  FrontLobby assists consumers new to credit and new to Canada with building a credit file and gaining access to credit.
  3. FrontLobby enables consumers with thin credit files to positively impact their credit reports and thus unlock credit and better rates for credit.
  4. For tenants with poor credit, but a history of always paying rent, they find it harder to secure housing. FrontLobby enables them to show potential landlords that despite a low credit score, they are a responsible tenant and should be rented to.
  5. Relevant to COVID-19 and beyond, FrontLobby enables rent deferral agreements and payment plans to be registered which then enables tenants to create a positive tenant record that they can use when applying to rent in the future and still help strengthen their credit rating despite unexpected financial difficulties.
  6. From a housing supply and quality standpoint, FrontLobby helps increase the supply and quality of rental housing for responsible tenants. FrontLobby substantially reduces the risk and cost of delinquent tenants which encourages more rental housing to be created, enables smaller landlords to afford to continue providing rental housing (i.e. basement suites), and enables all landlords to afford more repairs & improvements and even reduced rent prices. The small percentage of individuals who are intentionally delinquent, cost the rental housing industry over $3 Billion per year in Canada which impacts the housing supply for everyone.

It is only tenants who choose to be delinquent and choose to not communicate with their landlord that will find there is accountability and consequences for such choices and for the problems they cause that negatively impact landlords and other tenants.

FrontLobby’s goal is for all parties to fulfill their responsibilities, act responsibly and for landlords and tenants to benefit as a result.    

Landlords May Use FrontLobby To Report To Credit Bureaus:

In Canada, it is well established practice for landlords to report debts to collection agencies and share that information with Credit Bureaus, such as Equifax and TransUnion for the purpose of collecting debts and mitigating fraud. Reporting to Credit Bureaus commonly occurs indirectly through collection agencies or directly by large landlords. FrontLobby enables landlords of all sizes to report debts to Credit Bureaus and to be involved with reporting positive rental histories to benefit tenants.

Applicable credit reporting, consumer protection and privacy legislation enables landlords to report to Credit Bureaus: a) with consent; b) through implicit consent; or c) without consent when they are doing so for an approved purpose such as for the purpose of collecting a debt owed to them, for investigation of a breach of an agreement or a law, or to detect or suppress or prevent fraud.

FrontLobby does not maintain any “tenant lists”. FrontLobby facilitates the reporting of both positive and negative rental history to Credit Bureaus, enables free tenant access to Lease Records, and provides several dispute mechanisms.

As long as the information reported is accurate, the Platform has numerous automated protections and guidance in place which help ensure our landlord, property manager and tenant members are protected and that reporting and usage of the different services remains in compliance with relevant legislation.

Landlords May Screen Applicants Through FrontLobby:

The ability for housing providers to screen their applicants for rental history, credit and tenancy-worthiness and the practice of providing rental history references to other landlords is recognized as an accepted and established practice throughout the industry.

With consent, landlords may view information from Credit Bureaus (e.g. Equifax, Landlord Credit Bureau) and background information from other third parties through the Platform in connection with the applicant wanting to enter into or renew a tenancy agreement. Landlords must have consent from the applicant before viewing such information.

Accuracy Of Data:

Before allowing users to contribute data, FrontLobby verifies all user’s identification, using document submission and/or a secure process provided by Equifax. FrontLobby does not allow information to be contributed anonymously. FrontLobby only reports information from landlords and tenants who have had their identity and legitimate purpose verified.

Users contractually agree to only report factual information and to only use FrontLobby for a valid purpose, or risk personal liability.

FrontLobby also maintains a viewable record of anyone who contributes or views data.

Other Protections For Tenants:

FrontLobby proactively endeavours to notify tenants, provides free access to review records, and if information is disputed, there are multiple mechanisms in place to handle such disputes. FrontLobby will then investigate.

Tenants may review and dispute information that a landlord has provided by submitting a dispute to FrontLobby or directly to the landlord. If the tenant disputes information directly to the landlord, the landlord and tenant may contact FrontLobby for assistance.

Further, tenants are provided a grace period before data is shared with Credit Bureaus, so that there is time to review the Lease Record, verify the accuracy of the information, dispute inaccurate information, and to pay any debts or agree to a payment plan.

Requests and disputes can be made by:

  • Emailing support@frontlobby.com; or
  • Mailing a request to:
    Attn: FrontLobby Legal & Privacy
    5331 Headland Drive, Unit 93071,
    West Vancouver, B.C. V7W 3C6.

If the individual requests, the landlord or property manager must inform them of the name and address of the Credit Bureaus they accessed reports from pertaining to the individual.

If a report from a Credit Bureau wholly or partly informs a decision to deny the individual’s application for tenancy, the recipient landlord or property manager must notify them of that fact. If the individual requests, the landlord or property manager must inform them of the name and address of the relevant Credit Bureau.

Legislation prohibits persons from knowingly supplying false or misleading information to a Credit Bureau.


Clauses to Add To All Application and Lease Templates

 


FrontLobby recommends adding the clauses below to Applications for Tenancy and Lease templates:

Specific Legislation & Guidance Regarding Landlords Reporting to Credit Bureaus
 


Examples of tenants being convicted of fraud for not paying their rent:


Office of the Privacy Commissioner of Canada

  • Can a landlord put my name on a “bad tenant” list?


    “Our office has found that landlords do not have the right to disclose information such as a poor payment history to an unregulated or ad hoc ‘bad tenants list.”
    However, formal and regulated mechanisms, such as credit agencies, may be notified in appropriate circumstances.”

    https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/privacy-in-the-landlord-and-tenant-relationship/

  • Don’t shame ‘bad’ tenants


    “Despite best efforts, a rental relationship may not go smoothly. From your perspective, the tenant may have been disruptive or damaged the unit, had a poor payment history, or other factors. However, this does not give you the right to disclose this information by, for instance, contributing to an unregulated ‘bad tenants list.’ Formal and regulated mechanisms, such as credit agencies, may be notified in appropriate circumstances; however, ‘vigilante’ actions are seldom, if ever, permitted by law.”

    https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/02_05_d_66_tips/

  • Debt collection is not a blank cheque for disclosure


    “Lastly, there are certain exceptions to PIPEDA’s consent requirements for disclosure of personal information to pursue a debt. It is important to keep in mind that these are limited to, among other factors, purposes that a reasonable person would consider appropriate under the circumstances. For instance, in past investigations our Office has found broad disclosure of detailed information about an outstanding debt to an individual’s family members, co-workers or on social media, to be wholly inappropriate.”

    https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/02_05_d_66_tips/

For Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, Nunavut, Northwest Territories, and the Yukon:

  • If the tenant has given consent, that is all that is required (Note: FrontLobby recommends adding the Lease clauses to all Applications for Tenancy and Lease templates).
  • If the tenant has not given consent, the Federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) enables landlords to still report for certain purposes:
  • Disclosure is allowed without the tenant’s knowledge or consent pursuant to:
    • Section 7(3)(b) for the purpose of collecting a debt owed by the individual to the organization;
    • Section 7(3)(d.1) for the purposes of investigating a breach of an agreement or a contravention of the laws of Canada or a province that has been, is being or is about to be committed;
    • Section 7(3)(d.2) made to another organization and is reasonable for the purposes of detecting or suppressing fraud or of preventing fraud that is likely to be committed.
    • Link to the Act: Personal Information Protection and Electronic Documents Act

For British Columbia:

  • If the tenant has given consent, that is all that is required (Note: FrontLobby recommends adding the Lease clauses to all Applications for Tenancy and Lease templates).
  • If LandlordBC’s template “Application for Tenancy” was used, then consent may already have been given pursuant to Section E in that application (Note: FrontLobby still recommends adding Lease clauses to all Applications for Tenancy and Lease templates).
  • If the tenant has not given consent, the B.C. Personal Information Protection Act (“PIPA”) enables landlords to still report for certain purposes:
  • Disclosure is allowed without the tenant’s consent pursuant to:
    • Section 18(1)(c) it is reasonable to expect that the disclosure with the consent of the individual would compromise an investigation or proceeding and the disclosure is reasonable for purposes related to an investigation or a proceeding;
      • Note: Section 1 defines “investigation” to mean an investigation related to (a) a breach of an agreement, (b)a contravention of an enactment of Canada or a province, (c) a circumstance or conduct that may result in a remedy or relief being available under an enactment, under the common law or in equity, or (d) the prevention of fraud if it is reasonable to believe that the breach, contravention, circumstance, conduct, or fraud in question may occur or may have occurred;
    • Section 18(1)(g) the disclosure is necessary in order to collect a debt owed to the organization;
    • Section 18(2); (3); and (4) may also apply if the above two sections do not.
    • Link to the Act: Personal Information Protection Act
  • Monetary orders from the Residential Tenancy Branch (RTB) are NOT REQUIRED to report to Credit Bureaus:
    • RTB Decision October 14, 2011: Landlord sent a debt to a collection agency without first establishing an entitlement to recover that amount by way of obtaining a Monetary Order. Such conduct does not negate the tenant’s obligation to pay the landlord. The landlords’ actions, with respect to sending the debt to a collection agency is not a violation of the Residential Tenancy Act, Residential Tenancy Regulations or tenancy agreement. Therefore, any claims related to such conduct fall outside the jurisdiction of the Residential Tenancy Act and its authority to resolve such a dispute. Dispute Resolution Services – Decision1698
    • RTB Decision November 8, 2016: Landlord sent tenant’s debt to a collection agency and did not file any Application for Dispute Resolution with the RTB nor get a monetary order. Tenant complained. The tenant’s application was refused pursuant to section 59(5)(a) of the Residential Tenancy Act because the tenant’s application did not disclose a dispute that may be determined under the Act. Dispute Resolution Services – Decision6592
    • RTB Decision March 8, 2019: Landlord sent tenant’s debt to a collection agency. Tenant complained the Landlord didn’t have a monetary order. Landlord did not apply for a monetary order and thus the RTB did not issue a monetary award in regards to this tenancy. As the Branch was not involved in this matter at any point and did not issue the monetary order, they dismissed the application in its entirety without leave to reapply. Section 9.1(1) of the Residential Tenancy Act. Dispute Resolution Services – Decision6370

For Alberta:

  • If the tenant has given consent, that is all that is required (Note: FrontLobby recommends adding the Lease clauses to all Applications for Tenancy and Lease templates).
  • If the tenant has not given consent, the Alberta Personal Information Protection Act (“PIPA”) enables landlords to still report for certain purposes:
  • Disclosure is allowed without the tenant’s consent pursuant to:
    • Section 20(i) the disclosure of the information is necessary in order to collect a debt owed to the organization
    • Section 20(m) the disclosure of the information is reasonable for the purposes of an investigation or a legal proceeding;
    • Section 20(n) the disclosure of the information is for the purposes of protecting against, or for the prevention, detection or suppression of, fraud, and the information is disclosed to or by (i) an organization that is permitted or otherwise empowered or recognized to carry out any of those purposes (e.g. a Credit Bureau).
    • Link to the Act: Personal Information Protection

For Quebec:

  • FrontLobby does not currently operate in Quebec.

1 Disclaimer: The information contained herein does not constitute, and is not intended to constitute, legal advice. This information is for general information purposes only. Information may not be the most up-to-date or address local requirements (e.g., city or province). This document contains third party links, FrontLobby is not responsible for the content on such third-party websites.