Montreal, August 2, 2022 - The Corporation des propriétaires immobiliers du Québec (CORPIQ) is releasing the results of a survey conducted among 1,200 rental landlords in the context of an imbalance in the supply of housing in several regions of the province. On the eve of an imminent election campaign, we invite all candidates to take note of these worrying results.
Rent payments in Quebec
Each year, non-payment of rent generates more than 40,000 files at the Tribunal administratif du logement (TAL). For 2020-2021, the context of the COVID-19 pandemic has reduced this number to 24,000 due to circumstances and the flexibility of landlords with payment agreements. However, this situation is expected to reach new heights and is reflected in this survey. In fact, 22% of landlords have been confronted, in the last 24 months, with a situation where the tenant does not pay the last month before the end of the signed lease. In fact, 16% of landlords say they have discovered that their tenant has left without warning or payment of rent. "Non-payment of rent causes a loss of $225 million a year to landlords. This is money that does not go into the maintenance of the rental stock, 2/3 of which was built before 1980. We are all collectively losing out and the other tenants are losing out despite themselves. The current economic situation worries the landlords in this respect ", explained Mr. Marc-André Plante, Director, Public Affairs and Government Relations of CORPIQ.
The importance of a security deposit.
Following the recent period of moving in Quebec, landlords point out that 44% of tenants left a dwelling in a state deemed unacceptable for the new tenant and that in 28% of moving activities, damages were caused to the dwelling. "These initial results reinforce the importance of the security deposit when a tenant signs a lease. A previous CORPIQ survey revealed that 15% of the moves generated an unexpected work bill of more than 1000$ per dwelling, equivalent to nearly 150 M$ on a Quebec scale. These expenses could certainly be reduced with the security deposit. The legislator must quickly examine this question and be inspired by Saskatchewan to guarantee the deposit for the most vulnerable tenants," said Mr. Plante.
The changing context of the housing rental environment
While vacancy rates are very low in many parts of Quebec and the real estate market appears to be more volatile today, other indicators in this survey are worrisome for the housing sector. In addition to rising labour costs, landlords are now facing rising borrowing costs as interest rates soar. More than 50% of rental owners have a variable rate mortgage and in 60% of cases, the value of the mortgage is more than half the value of the original loan. Also, 30% of rental landlords plan to reduce their renovation expenses in the context of an increase in the Bank of Canada's key interest rate. It should be noted that 81.5% of rental owners in general have a mortgage balance and that 13% of them have taken a unit off the market or plan to do so within the next five years. "With regard to the results of the present survey, CORPIQ notes a high level of indebtedness of landlords and the effects on the management and maintenance of the rental stock in Quebec. With the lack of housing in many regions of Quebec, an integrated strategy will be needed to increase the number of units and ensure the maintenance of the existing stock. More social and affordable housing is also needed. All partners in the housing sector and governments have a duty to take swift action to provide housing for all. To do this, we must improve the regulatory environment to stimulate the development of housing in Quebec," concluded CORPIQ's Director of Public Affairs and Government Relations.
A non-profit organization bringing together 30,000 landlords and managers who own nearly 500,000 rental units and condos, CORPIQ is the largest association to offer services to landlords and to defend their interests, for over 40 years. It serves all regions from four offices with a total of 70 employees. Quebec landlords provide housing to 1.3 million renter households, seven out of ten of which own a duplex or triplex. Rental housing represents gross annual revenues of $10.5 billion, of which $1.6 billion is returned in municipal and school taxes.
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