Disclaimer: This article is for information only, and should not be used as legal advice. Please retain the services of a licensed legal professional to obtain legal advice specific to your situation.
There has been widespread news coverage of the Canadian Government’s commitment to settle 25,000 refugees from war-torn Syria. It is likely that many of these newcomers will look to rental housing for their accommodation. The government is also looking at other housing options such as military bases and decommissioned hospitals to provide shelter for new refugees. The arrival of a large number of refugees from Syria in a short time period will pose a logistical challenge, but also a long-term opportunity for our country and our province.
For rental housing providers, some questions may be raised about the application process for refugees who may have no credit history or record of income in Canada. It is vital that all housing providers treat all prospective tenants equally under the law, and ensure their business practices are not in violation of the Human Rights Code.
Once a housing provider decides to offer a rental opportunity to the public, they must do so in a non-discriminatory way. A landlord or other housing provider who denies a rental opportunity to a person because of a personal characteristic such as citizenship, refugee status or race/religion, could be found guilty of a human rights offence. This is both a costly and unnecessary mistake.
Tenant Screening and the Human Rights Code
In almost all cases, rental housing providers assess prospective tenants by requesting information on Rental history, credit references and/or credit checks may be requested. A landlord can also ask for income information, but only if they ask for and consider together any available information on rental history, credit references and credit checks (such as through Equifax Canada or Rent Check Credit Bureau).
It is very important to note that a lack of rental or credit history should not be viewed negatively. Many suitable tenants may lack a credit history for various reasons. This could include young adults, students, or women returning to the workforce after lengthy periods of care-giving or after the breakdown of a marriage. Obviously this could also include refugees or new immigrants.
Regulation 290/98 permits landlords to request credit references and to conduct credit checks (with permission from the prospective tenant), and to consider this information in selecting or refusing a tenant.
However, refusing applicants with little or no credit history may have a disparate impact based on Code grounds. Landlords cannot equate the absence of a credit rating with a bad credit rating. Landlords should not reject tenancy applications based on a lack of credit history. Not only would you be potentially discriminating against certain applicants, you may also be turning away the ideal tenant. There is no evidence to suggest that newcomers are any less dependable on paying the rent on time compared to any other renter.
One option is to review the applicant’s income information. As noted in Human Rights Code R. 290/98, income information can be considered on its own when no other information is made available. Sources of income could include social history or employment.
Landlords should note that, under the Code, income information should be limited to confirming that the person has enough income to cover the rent. It is illegal for rental housing providers to apply a rent-to-income ratio such as a 30% cut-off rule.
Section 2(1) of Regulation 290/98 permits landlords to require guarantees for rent. The most common way of doing this is to require a “guarantor” to sign the lease – but only if the landlord has the same requirements for all tenants, not just for people identified by Code grounds, such as recent immigrants, students or people receiving social assistance. As a best practice (and to be on the right side of the law), housing providers should request a guarantor’s signature on all lease agreements.
Also, when landlords request a co-signer or guarantor, they cannot require that this person meet minimum rent-to-income ratios that they could not impose on the prospective tenant.
Every year, over 26,000 refugees arrive in Canada from a wide variety of countries, but always to find a better life. Many of them become ideal, long-term tenants in rental housing. By using common sense, practical business practices, and consistent assessment methods in compliance with the Human Rights Code, housing providers can gain excellent customers while providing a welcoming place for those making Canada their new home.
WHY NEW IMMIGRANTS ARE NOT A RISK TO RENTAL PROVIDERS
With the recent influx of refugees and immigrants into the European Union, and now into Canada and the United States, landlords have expressed concern about fairly assessing and welcoming new rental applicants. This is due to perceptions that poor language skills, unfamiliarity with Canadian society, or misinformation acquired in their countries of origin could increase risks of default, vandalism, or other inappropriate conduct.
Recent Citizenship and Immigration Canada policy, however, affirms that new immigrants – particularly refugees from failed states – pose a far lower risk group than the general populace.
Here are some helpful points for rental providers:
- Know the minimum documents immigrants and newcomers must have (such as a Permanent Resident Card or 8-digit Client ID from Citizenship and Immigration).
- Know what questions are appropriate and compliant with current Human Rights legislation. Sponsors and/or translators can be helpful guides.
- Require contact and/or presence of the applicant’s sponsor or official case-worker.
- Stay abreast of significant resettlement programs in your area and how to respond; staff of local MPs’ offices are generally prompt and helpful in answering questions.
- Remember: a rental experience is most likely the first ongoing and traceable economic relationship immigrants will establish in their new homes.
Source: Rent Check Credit Bureau