Screening a tenant in Ontario without breaking the rules

01The grounds you may never refuse for

Choosing a tenant is a real right. It is not an unlimited one.

The regulation that governs tenant selection ends with a sentence that overrides everything else in it. Nothing in it authorises a landlord to refuse accommodation to any person because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status, disability or the receipt of public assistance.

Two of those catch people out constantly.

Family status covers having children. An advertisement that says adults only, or a decision that a two bedroom is not suitable for a family, is a problem.

Receipt of public assistance covers a tenant paid by a social programme. You cannot treat that income as worth less than a paycheque because of where it comes from.

The safest way to think about it is that you are allowed to assess whether someone will pay the rent and look after the place. You are not allowed to assess who they are.

02The order the rules put things in

Ontario Regulation 290/98, made under the Human Rights Code, sets out what a landlord may actually do. It is short, and the order in it is deliberate.

You may request credit references and rental history information, or either of them, and you may ask the applicant to authorise a credit check.

You may consider those things, alone or in any combination, and select or refuse the applicant on the basis of them.

You may request income information only if you also request the information above. Income is not a thing you may ask for on its own.

And you may consider income only together with all the other information you obtained. There is one exception: if you asked for everything and income is the only thing that came back, you may consider income alone.

So the sequence is: ask for references and rental history and credit consent first, then ask about income, then weigh the whole picture. Asking about income before anything else reverses the order the regulation requires.

1. 1

   1. Ask for the things the regulation puts first

   Credit references, rental history, and written permission to run a credit check. Get the permission in writing and keep it. That written consent is what makes the check lawful and what you will want on file later.

2. 2

   2. Then ask about income

   Pay stubs, a letter from an employer, a bank statement, a notice of assessment. Ask every applicant for the same thing.

3. 3

   3. Weigh it together

   Look at all of it as one picture, not as a series of pass or fail gates. That is what the regulation requires and it is also a better decision.

4. 4

   4. Write down why

   Two lines on the file for the applicant you chose and the ones you did not. The reason should be something in the picture: no rental history that could be verified, or a landlord reference that described repeated arrears.

03The 30 per cent rule is not a rule

A lot of landlords use a ratio: the rent should be no more than 30% of gross income, or the income should be at least three times the rent. It feels objective, which is why it spread.

The Ontario Human Rights Commission's policy on rental housing is direct about it. It states that it is illegal for housing providers to apply a rent to income ratio such as a 30% cut-off rule. The exception is housing where the rent is geared to income by design.

The reason is not that income is irrelevant. It is that a ratio applied on its own screens out people the Code protects, particularly people on lower or non-standard incomes, without saying anything about whether they actually pay their rent.

The policy also confirms the sequencing point: income information can only be considered on its own when no other information is made available.

In practice, an applicant with a modest income, three years of verifiable rent paid on time and a clean credit report is a better bet than a higher earner with no history. The rules are pointing you at the more accurate answer.

04References that tell you something

The previous landlord is the single most useful call you will make, and most people waste it by asking questions with only one answer.

Would you rent to them again gets you a yes from someone who wants them gone. Ask for facts instead.

What were the move-in and move-out dates. What was the rent. How many times was it late in the last twelve months. Was any notice ever served. Was the deposit applied to the last month as it should have been.

Then check that the person you are talking to is the landlord. Look up who owns the address. A reference who cannot describe the building's parking arrangement usually did not manage it.

The current landlord has an incentive to be positive about a tenant they want to move on. The one before has none. Ask for both.

05What to do before your next showing

How TenantBay helps: it records the screening consent and keeps the reports you ran elsewhere attached to the applicant's file, so the written permission and the decision live with the tenancy rather than in an inbox.

• Write down your criteria before you advertise, and use the same ones for everyone.
• Use one application form that asks for references and rental history first, then income, then consent to a credit check.
• Get the credit check consent in writing and keep it with the file.
• Ask reference questions that have factual answers, and call the previous landlord as well as the current one.
• Record the reason for your decision on every applicant, not just the one you accepted.
• Never ask for extra months up front, a larger deposit, or a guarantor from one applicant and not another. That is both an unlawful charge and a Code problem in one move.