“Toronto Newcomers Forced to Pay Up to 12 Months’ Rent Up Front to Secure Housing”
In the increasingly competitive Toronto rental market, newcomers are facing a daunting reality: to secure housing, many are being forced to pay up to a year’s rent in advance. This unregulated practice, though technically illegal for landlords to request, is becoming commonplace due to the desperate circumstances of many immigrants lacking local credit scores, reference letters, and stable employment.
Andrea Carranza and her husband are among those who have experienced this firsthand. Arriving in Toronto last summer from Lima, Peru, where Carranza had worked for IBM for nine years, the couple faced repeated rejections from landlords despite applying for numerous condo units. Without local credit scores, reference letters, or jobs, their applications were consistently turned down. After two months of couch-surfing in a cramped downtown apartment shared with two other couples, their real estate agents suggested they offer up to a year’s rent up front to improve their chances. Desperate for a place to call home, Carranza found an apartment through Kijiji and handed over $28,300—her and her husband’s life savings—to secure it.
Carranza’s experience is not unique. CBC News spoke with eight newcomers, including Raffaela Cruz, who faced similar challenges. Cruz moved to Toronto from Quito, Ecuador, in 2023 and, after spending over $270 a night for an Airbnb, she worked with three real estate agents to find a more permanent solution. Two agents suggested she pay 12 months’ rent up front due to skepticism from landlords about her Latin American background. Ultimately, Cruz and her husband managed to secure an apartment by paying six months’ rent in advance.
The practice of demanding large sums of rent up front exists in a grey zone of Ontario’s Residential Tenancies Act, which only legally permits landlords to request first and last months’ rent. However, tenants, particularly newcomers, often feel compelled to offer more to prove their reliability. Real estate agents, incentivized by commissions, frequently advise clients to make these large payments to secure a competitive edge in the housing market.
Sue Heddle, an Oakville-based real estate agent, notes that the practice began around 2017 and has since become the norm. “It’s hard for you to say no to a cheque that’s coming across the table for $60,000, right?” Heddle remarked, underscoring the financial pressures both landlords and tenants face. This sentiment is echoed by Elaine Page, a paralegal with the Law Society of Ontario, who represents landlords and acknowledges the temptation to accept large upfront payments.
Despite these pressures, the practice leaves many newcomers vulnerable to exploitation and financial instability. Angela Chaves, a transitional services manager at the Halton Multicultural Council, works with newcomers and confirms that those who can speak English and work with real estate agents are slightly better off. However, even these individuals are often advised to pay up to 12 months’ rent upfront due to inherent biases and the competitive rental market.
The issue extends beyond Toronto. Low vacancy rates and a backlog at the Landlord and Tenant Board, which resolves disputes between tenants and landlords, exacerbate the problem across Ontario. The Federation of Metro Tenants’ Association receives about 40 calls a day from tenants reporting illegal practices, including demands for multiple months’ rent up front. Lily Xia, from the association, points out that newcomers are particularly vulnerable, often caught “between a rock and a hard place.”
For landlords, accepting large sums up front seems like a way to safeguard against potential losses. However, this practice can lead to further complications, including the acceptance of tenants who may provide fraudulent documents, as seen in the case of Larry Williams, a Toronto landlord now owed $35,000 in unpaid rent.
The Ontario Ministry of Municipal Affairs and Housing acknowledges the issue but maintains that increasing housing supply is the only long-term solution. Meanwhile, they suggest that tenants facing exploitation file complaints with the Landlord and Tenant Board, a process that can take months to resolve, leaving many in precarious situations.
For newcomers like Andrea Carranza, who now relies on her husband’s salary for daily expenses and is under immense pressure to find a job, the struggle to secure housing has been a harsh introduction to life in Canada. Despite their financial strain, Carranza remains grateful to their landlords for providing a home when they had nowhere else to turn. “They are actually good people. They trusted us,” she reflects, highlighting the complex and often personal nature of landlord-tenant relationships in this challenging housing market.
As the housing crisis continues, the stories of newcomers like Carranza and Cruz underscore the urgent need for regulatory clarity and increased housing availability to protect vulnerable tenants and create a fairer, more stable rental market for all.