Reference letters from landlords are not common, but why experts make a case

The idea of ​​landlords asking potential tenants for a reference letter has long been considered a standard practice in the rental industry, says William Strange, professor of economic analysis and policy at the University of Toronto Rotman School.

Although the example of tenants asking landlords for a reference letter from previous tenants is much less common.

“I haven’t heard much about it, [and] I doubt it will be so common, “Strange told CTVNews.ca in a telephone interview Tuesday. “There is no standard data source that tracks things like this.”

While this may not happen often, Strange says it presents an interesting idea: why are homeowners not already automatically forced to provide their own reference letters?

Landlords request a reference letter to learn more about potential tenants who are interested in renting their unit, as well as to verify if they will be able to pay the rent. Tenants, however, are curious about what kind of landlord they will deal with, Strange said.

“From tenants’ perspectives, they want to know a lot about landlords that are not trivial and are not guaranteed by laws that protect tenants,” Strange said.

“They may want to know, is this the landlord who will come to fix the washing machine when it needs to be fixed?” Or does he just not pay attention when you tell him something to do? ”

A Sydney man made the request in Australia earlier this year. In a TikTok video posted in January, Tom Cashman explained that when looking for an apartment for rent, he asked a landlord to give him a reference letter from a previous tenant.

“I’ve never heard anyone ask this, but they’ve asked me for three references, for example, to see if I’m a good person,” Cashman said in the video. “What about them? Are you a good person?”

According to Cashman, his application was initially granted but In a follow-up videoHe told the audience that his rental application had been withdrawn, although Cashman said he had not asked for it to be rejected.

Las Hvitted, a legal advocate at the Tenant Resource and Advisory Center in British Columbia, said he had seen a similar story involving a Canadian tenant who requested that a potential landlord provide references from past tenants.

“I have heard many tenants express concern about their new landlords and do not know how to deal with them. [or] Whether they are good people or not, ”he told CTVNews.ca in a phone interview in March. “But I don’t think I’ve ever heard anyone specifically request a previous tenant reference from a landlord.”

Part of the reason may be due to a power imbalance between landlords and tenants, Hvitved said. In the province of BC, for example, there are strong indications that the current rental market in the province is skewed in favor of landlords as opposed to tenants.

A rental market report published by the Canadian Mortgage and Housing Corporation (CMHC) in February collected data on vacancy rates in major Canadian cities. These rates correspond to the percentage of rental units available in a given market While some cities, such as Edmonton, are seeing high vacuum rates close to seven percent, other cities, such as Vancouver, have dramatically lower rates at just 1.2 percent. According to the CMHC report, the vacancy rate in the city of Victoria, as well as parts of Ontario, is as low as one percent.

The lower vacancy rate in these units means less for tenants to choose, Hvitved said. As a result, soliciting reference letters from potential landlords may serve little purpose in helping tenants secure a rent, he said.

“Most tenants are not deciding between the 14 landlords, ‘Oh, I wonder which apartment I would choose,'” he said. “Beggars cannot be selectors [and] At the moment, the tenants are beggars. “

Possibility of zamindar law

Hvitved says he acknowledges the value of trying to ask landlords for references from past tenants as a form of protest. With the rise in average rental prices in Canada, it will probably persuade tenants to become more political and take similar initiatives to try to correct the power imbalance between landlords and tenants, he said.

“I can see how some people see this as a very unpleasant way to deal with a more serious problem,” Hvitted said. “What a way to try to regain control or take back some of the energy that was snatched from you.”

But the current reality is that it may not be helpful to address some of the legitimate issues currently facing Canadian tenants, Hvitved said. It is quite easy for a landlord to reject an application from anyone requesting a reference, as there are probably many more candidates to choose from.

“If you are a landlord, you rent a place and you have 40 applicants, why not try if you can’t?” Says Hvitved. “If someone asks for a reference, you just don’t pick them because you want people who are going to get you the least trouble.”

That’s why some of the laws that make landlord references necessary are important, Strange says.

MLA Michael Peterson has introduced a proposal in the Australian Legislature that would give tenants the right to ask their landlords for references from past tenants. After watching Cashman’s video, Peterson said that allowing tenants to request references from landlords could benefit residents of the Canberra capital, which he presides over, to help tenants maintain the same lifestyle as unit owners.

Although there is currently no such law in Canada, Strange says he sees landlords suing a unit for presenting tenants with reference letters from past tenants, if asked.

Strange said that in the context of general investment, such as transactions with a bank, efforts are made to disclose the terms of the agreement, including benefits and associated risks. Signing a leasing agreement with the landlord serves as a form of investment, so it is understandable that landlords also take steps to submit a reference letter, he said.

“If you’re looking for someone to invest in, you shouldn’t keep in the dark about the investment situation,” he said. “Literally, entering into a lease agreement does not look like buying stock, but it is really an investment in the sense that you are entering into a contract.

“Such an investment would work well for all parties if they could understand each other.”

Strange said landlords who are reluctant to provide information or other relevant details of the unit from past tenants should be the cause of suspicion.

“A good landlord has every reason to tell you [about] Previous tenants, ”he said. “Landowners may want to get a letter that proves their eligibility as a landlord and a good landlord wants to do it voluntarily.”

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