For a client, part of the value proposition when evaluating a Realtor is the depth and quality of advice they can provide. Good advice makes for successful decision-making. On legal issues, the right move is generally to have them speak to a lawyer or paralegal, depending on the nature of the issue.

However, like most things in life, it’s never that cut and dried. A Realtor with 20 years’ experience will have enough knowledge in a variety of different fields to offer solid advice. This might relate to legal issues, market conditions, renovation costs, parking pads or condo declarations.

But it’s easy to run into trouble, because none of us know what we don’t know. With more than 25 years as both a Landlord and Tenant Board (LTB) adjudicator and a paralegal, I’ve seen horror stories that could have been avoided if the advice given was to consult with a professional.

I used to teach courses to real estate boards. I was RECO-certified in the days of in-person training. Too often I held my tongue when lectured by someone attending a session, boasting to me that they knew everything about the Landlord and Tenant Act. A statute that hadn’t existed in 20 years. (The Landlord and Tenant Act became the Tenant Protection Act in 1998, and the Tenant Protection Act became the Residential Tenancies Act in 2007.)

I remember imploring the packed room at the TREB theatre, begging those with contacts with the higher-ups to have them sit down with me. They needed to modify dangerous clauses in the Form 400 and their standard lease clauses. These were clauses that were inconsistent with the Residential Tenancies Act. Not just inconsistent, but in some cases, potentially dangerous.

 

Where to draw the line

 

Which brings us back to how you give advice. And where you draw the line. Any person not licensed by the Law Society of Ontario should not be giving legal advice. Let me give you one example of what happens when you cross that line.

There is, or at least there was, a standard clause provided by the industry related to renewal of a lease term by a residential tenant. It went something like:

A tenant may, if the tenancy is in good standing, provide the landlord with written notice, given at least 60 days prior to the end of the existing lease term, to renew the lease term for one additional year.

This sounded great. Except it wasn’t. It didn’t explicitly limit the exercise of that option to just one use. Whoever drafted it allowed for perpetual renewals, at the tenant’s option, until the end of time.

 

A tenancy without end

 

So along came an investor who purchased a condo in downtown Toronto near the university as an investment. But long term, the investor hoped that if any of her children eventually went to the University of Toronto, they could live there. So, with the assistance of a Realtor, they closed on the condo, found a tenant and drafted a lease.

All was well for several years. Great tenant. So the owner didn’t mind when each year the tenant picked up the renewal option in accordance with the lease.

Until her son was accepted at U of T. Again, she consulted her Realtor, who suggested that they serve an N12 notice to the tenant to evict so that her son could move in.

So they served the N12. And the tenant smiled and said that no, he would not be moving out.

So, off to the LTB. After a hearing, the board member refused to evict because the tenant was still in the lease term. You can’t evict with an N12 or N13 during a lease term.

She asked her Realtor, “When can I evict my tenant?” The answer, of course, was “NEVER.” The standard clause, written by God knows who, gave the tenant the right to a perpetual term. The tenant, keeping out of breach, could live there forever. The landlord’s investment had turned into a poorly paying annuity, with rent control limiting the return.

All from one tiny mistake. With a clause provided and used throughout the industry.

This is a true story. And it is not an isolated story. I could give dozens of examples of bad advice related to a rental resulting in harm to the client.

Residential tenancy law is perversely complicated. It is not logical. It doesn’t matter how smart you are when you don’t know what you don’t know.

 

Know your lane

 

In some ways, the introduction in 2018 of the Ontario Standard Lease created more issues. The Form 400 was no longer enough, and often Realtors are pressured into drafting leases. Which they shouldn’t be doing. Your broker of record likely doesn’t like it. And your insurer likely won’t consider a claim when you are acting outside your lane.

The best you can do is to create a team of professionals around you. Good people you can trust who can apply their knowledge and experience to best protect the interests of both you and your client.