Our guide to Landlord Credit Bureau for Landlords

To date we have only explored the Landlord Credit Bureau from a tenant perspective. What we recognized as a missing component was outreach to landlords who may be considering using the service or have already signed up. They too deserve to hear about LCB from people who aren’t trying to sell them LCB.

Landlords using the LCB need to understand the possible risks and liabilities associated with the services and advice they are being offered. To that end we first want to state very clearly that landlords looking to do business with the Landlord Credit Bureau should seek professional legal advice before proceeding to ensure they will be compliant with both Provincial and Federal laws. Engaging a service like this is not without potential risks and you want to make sure you as the landlord are protected.

Here are some examples you might want to bring up with your lawyer when you meet to to talk about how the LCB can be integrated into your business:

The LCB advises landlords that they do not have to get consent from their tenants to use the service.

If you were thinking there was a “but” coming, you’d be correct. Because how you can use LCB for a given tenant can change depending on whether they consent or not according to the LCBs own legal framework page. If consent was not an issue and not necessary, why is it that the next section breaks down into categories for consenting tenants and non-consenting tenants? Shouldn’t there be no effective difference if consent is not an issue? Does it already sound like things are more complicated than they appear in the summary?

This is fairly uncontroversial. If both a Landlord and Tenant want to agree to this kind of reporting and understand exactly what the Landlord Credit Bureau is and what their rights are then this seems to be the ideal situation – everybody agrees and is properly informed.

The situation presented here by LCB is not without its possible complications though. The claim that including the LCB Application and Lease Clauses will put you in the clear isn’t so clear – in Ontario, for example, the Province has created a standard lease agreement that can only be altered under certain circumstances. You can’t just alter the language of it as you see fit, there are rules governing how you can go about modifying the agreement and what parts you can and cannot modify.

If a landlord changed the language in the standard Ontario lease and did not negotiate this change with the tenant they could find themselves at risk. This is one example in one Province.

Make sure you are getting your lease agreements checked out by a lawyer to ensure you are compliant with Provincial housing laws.

A second point of contention is in the assumption that a tenant logging in to the tenant portal gives consent by accepting the terms and conditions presented to them. This is also a more complicated issue than the LCB is making it out to be here.

Anyone can set up Terms and Conditions for using their services and put whatever they’d like in there. People can agree to those terms (often without reading them). This does not actually mean those terms and conditions are enforceable or even legal to begin with and the only way to actually find out is to test them in court. So despite your tenant signing in to the portal and agreeing to the Terms and Conditions it is something that can still be challenged in court or in other tribunals and in the end may not be lawful or enforceable. Who is at risk now in this situation? You are.

Also worth mentioning is the fact that if tenants have to sign in to the portal to find out what the service is all about and see what is on file about them, doesn’t burying consent to enable the LCB to do all of this stuff in the Terms and Conditions when you sign in seem a bit deceptive? Tenants get an email saying they’ve been signed up to some kind of credit bureau by their landlord so they click on the link to find out just what is going on and find themselves essentially tricked into consent. It’s a practice that is bound to see a legal challenge.

This is where things start to get confusing. We were told we didn’t need to get consent but now this seems to be pretty clear that if you do not have consent, LCB functions as a spreadsheet for the landlord. That’s it. You’re allowed to report payments for internal use only.

It’s arguable that putting the tenants data on the platform at all is sharing that data with a third party and could form the basis of a legal challenge. It also remains to be seen how LCB firewalls off this data from the rest of its dataset and whether their implementation is effective.

Now what is all this stuff about debt? We need to get to the next paragraph to examine this claim a little more closely.

Very important to note that this piece right here is the Secret Sauce the LCB is claiming to have that allows it to do what no other tenant screening service in the country does.

What they are presenting here is a legal theory – that these clauses in the PIPEDA enable them to act without tenant consent and these claims are simply untested. LCB brags they have had zero complaints (another claim we take issue with) as if that is a virtue when what they are really saying is that this whole legal framework has never been taken for a test drive. Nobody has given the tires a kick.

Provincial housing laws and tribunals govern how things like debt are assigned and ordered for collection. This theory they are floating about collecting debt, investigating breach of contract, fighting fraud and all that are going to come up against Provincial laws governing residential tenancies.

Generally speaking, unpaid rent and other arrears related to a residential tenancy are not considered a debt until there is a judgment from a tribunal or small claims court and an order for the tenant to pay up. Until then, it’s a dispute over terms of a private contract. Claiming a tenant owes you money and then reporting them to LCB without their consent and in turn harming their credit before you have a legal order in your hands could expose you to risk. Before taking any kind of enforcement step like this make sure you consult the tenancy laws in your area and proceed through the housing tribunals that are set up for this purpose.

What this arguably could be perceived as is an attempt by Landlord Credit Bureau to assist in circumventing your Provincial tenancy laws and the legal tribunals tasked with adjudicating them. The legal pitfalls here are numerous and landlords should tread carefully to protect themselves and get a legal opinion before proceeding.

Don’t just take our word for it though, here’s what a commenter who claims to be a landlord had to say about it under an article about the LCB in the Huffington Post:

Not that we think you should be taking legal advice from random internet commenters, or even from us. What we are doing is illustrating that things aren’t as cut and dried as LCB would have you believe and you need to seek professional legal advice before proceeding.

But wait, they claim they will provide free legal defence if someone files suit against you for using their services. Surely that means the service is safe to use, they are assuming all of the risk?

Let’s unpack some of this and see.

This is a completely new feature they are claiming. It didn’t exist on their site until sometime after November of 2020.

If you visit the Legal Defence Page what you learn is that you need to be a premium member and meet a bunch of other qualifications before they will cover you. We’re planning a deeper dive into this new feature of theirs so watch for it.

A few quick points on this section though:

  1. Again, zero complaints does not mean the service is legal. It doesn’t even mean the legal framework is strong, potentially the opposite. What they are telling you is that all the legal theory they are claiming enables and protects them (and you) is just that – theory that hasn’t been tested in court. Do you want to be their test case?
  2. This section about misuse of the platform really needs to be called out here because Landlord Credit Bureau themselves are the biggest misusers of the platform by far. Landlord Credit Bureau CEO Zachary Killam is also in the landlord business with his stake in LiveWell Property Management. This relationship is exploited to harvest data from LiveWell tenants without their consent. The ethical problems raised by this relationship are huge and potentially criminal in nature. This is a gross misuse of their platform and they are the main perpetrators.
  3. Continuing on the subject of misuse, the LCB has refused to comply with the Consumer Reporting Act and provide details of the data they have on file for tenants when asked by that tenant. I know this because they did it to me and to other neighbours of mine. They also don’t provide information about the tenants rights regarding security freezes anywhere on their public facing page despite a legal obligation to do so.

Recall that LCB is connected to LiveWell Property Management. How do they propose to impartially arbitrate disputes involving these tenants? The credit bureau is also the creditor. Do you think LiveWell tenants can expect a fair hearing when it financially benefits LCB to arbitrate against them? Is LCB really going to investigate LiveWell?

What are these mechanisms they claim tenants can use? I’ve had disputes with LCB and all I got in return was utterly rude, dismissive treatment and a refusal by them to actually comply with the law. I’ve already filed complaints, COVID has utterly derailed that process.

If the LCB are flippant about their legal obligations in this area, what makes you sure they aren’t also being flippant about their obligations elsewhere? Landlords need to ask tough, probing questions and get legal insight or else end up getting dragged into a whirlwind of risks.

Finally I want to unpack this section a little bit because it deals with Ontario and I can speak to it. They make similar arguments for other jurisdictions which I suspect suffer from similar weaknesses.

Again, right off the bat we can see that while they are saying consent isn’t needed they identify consensual scenarios and non-consensual scenarios. They say they PIPEDA enables you to report for certain purposes (which we will unpack a bit as well) but you could take the same facts and say that the PIPEDA doesn’t allow you to share data without consent, except under specific circumstances. They choose enabling language because it sounds like their consent argument still holds up this way. But does it? Aren’t they implicitly admitting they need consent to do anything without invoking special circumstances?

We’ve already talked about debt and how housing tribunals and small claims courts typically have to award an order to pay before a landlord can pursue debt collection and credit reporting. So how is this advice really helpful to the landlord? If you have an order for the tenant to pay arrears you already have legal mechanisms to pursue collection. What is the value you are getting here? Will LCB attempt to collect on behalf of the landlord? If not, how does reporting without consent assist in collecting the debt? The only utility in doing so seems to be for the purposes of blacklisting a tenant to other landlords subscribing to the service and that is an illegal practice.

How many landlords out there are “investigating a breach of agreement or contravention of the laws”? Would you consider yourself even qualified to do so? Or how about “detecting fraud or preventing fraud”? Again, these seem like clauses which are there to assist professional fraud investigators associated with the government and financial institutions, not somebody just trying to make a living as a landlord. These defences, just like the rest of them, are untested legal theory being projected by the LCB. Ask yourself if you want to pay a monthly fee to end up a test case.

This is by no means an exhaustive list, just a cross section of concerns that hopefully give you some things to consider.

We aren’t telling you whether you should or shouldn’t use the service. That’s entirely up to you as a landlord and businessperson. What we are trying to say with all of this is that this service hasn’t been legally stress tested and the risks are currently unknown. You should absolutely be getting legal advice from an accredited professional you trust, not a company trying to sell you a product or even a tenant trying to make sense of all of this. Talk to other landlords in your community and get their perspective. Do your due diligence and keep yourself protected.

Have questions? Want to share your experience as a landlord? Drop us a line: info@landlordcreditbureaufacts.com

UPDATE 01/28: We received some feedback about part of this article which was entirely fair and want to expand on.

The parts where we talked about debt and needing an order to properly enforce a debt really came off poorly and probably left people with the impression that an order is required in order to report to collections and/or a credit bureau and that’s simply not the case. Your landlord can try and enforce a debt as soon as there is an an arrears.

What we failed to communicate properly was that without an order from a court or tribunal the debt is a claim that risks a legal challenge from the accused debtor.

This doesn’t really come across in the piece so we wanted to be sure to correct things and try and be more precise. We are leaving the original text in place for historical purposes.