Landlords battling city over utility bills

They're challenging a plan to make them foot the bill for tenants who don't pay their tabs

London Free Press - November 30, 2003
by Jonathan Sher

London landlords have hired a lawyer to challenge plans by city council to put them on the hook for tenants who don't pay utility bills. "They'll go forward with guns blazing," said lawyer Joseph Hoffer, who has been retained by the London Property Management Association, which represents more than 350 landlords and related businesses.

"It's fundamentally unfair. It's not right to make one person responsible for the debts of another," said Hoffer.

Beginning Jan. 1, if London Hydro can't collect water and sewer bills from tenants, the city will add the arrears to the landlord's property taxes.

All taxpayers now foot the bill for tenants who don't pay their water and sewer charges.

That costs taxpayers about $240,000 a year -- the total of arrears and costs of collection efforts, city treasurer Mike St. Amant said.

That burden can now be shifted to landlords because of changes in Ontario's Municipal Act made by the former Conservative government, city solicitors concluded.

"I'd be negligent not to collect 100 cents on the dollar when we have the opportunity to do so," St. Amant said.

But the city's legal advice was wrong, Hoffer said. "That's the opinion we're going to be attacking," he said.

Council authorized the move in early September. With the city facing tough choices on tax hikes and service cuts, council had to act, London Mayor Anne Marie DeCicco said yesterday. "This is going to save taxpayers one-quarter of a million dollars."

Toronto and Hamilton have adopted similar measures, St. Amant said.

But that may mean little in court, Hoffer said. "I don't know if that's a defence for doing something wrong," he said.

Landlords were stunned when city officials told them the plan at their Nov. 19 board meeting, said Paul Cappa, vice-president of the group.

"Everybody kind of threw their hands up in the air and said, 'We can't believe you're doing this,' " said Cappa, a paralegal who works closely with landlords.

The landlords will argue their position to city council's board of control Dec. 10.

Landlords have no way of knowing their tenants haven't paid their utility bills and have no control over how large the arrears grow, Cappa said.

Federal privacy laws prevent London Hydro from telling landlords their tenants haven't paid their bills, St. Amant acknowledged.

That means landlords won't learn of utility arrears until Hydro forwards accounts to the city and they're placed on the landlords' tax bills.

At that point, the city will send notices to landlords requiring them to pay within 14 days or be charged a $50 administrative fee.

The fee adds insult to injury, Hoffer said. "Fifty dollars is outrageous for keying in a computer entry."

The change affects all landlords, but mostly those that own less than 30 residential units, Cappa said.

Tenants who know Hydro will no longer get a collection agency to chase them will have an incentive not to pay utility bills, Hoffer said. "If they find out they have a guarantor for their water and sewer bills, (some) won't pay," he said.

DeCicco and controllers Gord Hume and Russ Monteith said the city might find a way to notify landlords earlier that their tenants are running a tab at their expense. But council must collect the money, Hume said.

"The money is owed and has to be paid and that's the bottom line," he said.

Ultimately, good tenants will suffer too, Hoffer said, since landlords will pass on the cost of bad tenants to them.

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