Landlord Credit Bureau

Legal to Report Tenants

Is it legal to report tenants to LCB? Is consent required from the tenant?

Summary

 

Yes, it is legal for landlords and property managers to report to LCB. No, they do not require consent from the tenant.

For a tenant who has paid late or owes money, applicable privacy and consumer protection legislation enables landlords to report to LCB without notice or consent under an approved purpose (i.e. to collect the debt, investigate the breach of their lease, or to detect, suppress or prevent fraud, all of which LCB assists with).

For a tenant who has never paid late, does not owe money and has not given consent, landlords may create a record using LCB’s platform for their internal recordkeeping purposes. The tenant then has the choice to opt in to receive benefits from LCB (i.e. improved credit rating with Equifax, positive Tenant Resume). If such tenant does not opt in nor provide consent, the landlord is still entitled to maintain a record of their tenancy using LCB’s platform, and as long as the tenant does not pay late nor owe a debt, such record will solely be used for the landlord’s internal purposes and not shared. However, if such tenant ever pays late or owes a debt, then their record would be subject to disclosure pursuant to the previous paragraph.

For a tenant who has given consent, either verbally or in writing such as through the inclusion of LCB Consent Clauses in their application for tenancy or lease or by logging into the tenant side of LCB to confirm consent, nothing further is required.



The Details

 

Responsible Tenants Benefit From LCB:


For the majority of tenants, being registered with LCB provides significant benefits. Tenants can finally build credit by paying rent and create a Tenant Resume to help them receive priority for future housing. Even if a tenant is having financial difficulty, as long as they communicate with their landlord and create a reasonable payment plan, they can still receive the same benefits. It is only tenants who choose to be delinquent and choose to not communicate with their landlord that will find there is accountability and consequences for their choices.


Rent is many consumers’ largest single monthly payment, but to their detriment it is rarely reflected on their credit report:

  1.  LCB facilitates tenants to positively impact their credit reports through the inclusion of rent payments.
  2.  LCB assists consumers new to credit (i.e. young people) and new to Canada (i.e. immigrants) with building a credit file and gaining access to credit.
  3.  LCB enables consumers with thin credit files to positively impact their credit reports and thus unlock credit and better rates for credit.
  4.  For tenants with poor credit, but a history of always paying rent, they find it harder to secure housing. LCB enables them to show potential landlords that despite a low credit score, they are a responsible tenant and should be rented to.
  5.  Relevant to COVID-19 and beyond, LCB enables rent deferral agreements and payment plans to be registered which then enables tenants to create a positive tenant record that they can use when applying to rent in the future AND still help strengthen their credit rating despite unexpected financial difficulties.

LCB’s goal is for all parties to fulfill their responsibilities, act responsibly and for both landlords and tenants to benefit as a result.

Landlords May Report To LCB:


It is well established practice for landlords to report tenant information to collection agencies and share that information with Reporting Agencies, also known as Credit Bureaus, such as Equifax and TransUnion for the purpose of collecting debts and mitigating fraud. Reporting to Credit Bureaus may happen indirectly through collection agencies or directly by landlords. While other Credit Bureaus have chosen to not deal directly with landlords, LCB does deal directly with landlords of all sizes. LCB, Equifax and TransUnion are all Reporting Agencies in Canada.


Credit reporting, consumer protection and privacy legislation enables landlords to report to LCB, with consent, through implicit consent, or without consent when they are doing so for an approved purpose such as to ensure the collection of a debt owed to them, for investigation of a breach of an agreement or a law, to detect or suppress or prevent fraud, or when reporting is clearly in the interests of the individual.


Reporting Agencies are subject to provincial and federal legislation. LCB complies with, and in several instances exceeds, the requirements under that legislation.


Blacklists are illegal. LCB does not maintain any blacklists. LCB collects and reports both positive and negative information, provides tenants free access to their records, and provides several dispute mechanisms. Reporting tenant information to other companies which are not a Reporting Agency and do not have the requisite consumer protections, is likely illegal and may create personal liability. LCB’s built in and automated processes protect landlords and tenants using the platform.

Landlords May Access Tenant Records From LCB:


The ability for housing providers to screen their applicants for rental history, credit and tenancy-worthiness and the practice of providing rental history to other landlords is recognized as an accepted and established practice throughout the industry.


LCB is legally able to share records and landlords are entitled to view tenant records in connection with extending credit as landlords do, collecting a debt, or in connection with the tenant wanting to enter into or renew a tenancy agreement. For situations where the landlord is considering extending credit or offering a tenancy agreement, landlords need to get consent from the tenant before viewing such tenant’s records with LCB.

Accuracy Of Data:


Before allowing users to contribute data, LCB verifies all user’s identification, using document submission and/or a secure process provided by Equifax. LCB does not allow information to be contributed anonymously. LCB only reports information from landlords and tenants who have had their identity and legitimate purpose verified.


Users contractually agree to only report factual information and to only use LCB for a valid purpose, or risk personal liability.


LCB also maintains a record of anyone who contributes or views data.

Tenant Protections:


In addition to the preceding protections, both landlords and tenants are given the opportunity to provide information in a way that allows all sides to be heard and saved on the tenant’s record.


LCB proactively handles notifying tenants, provides free annual access to review and monitor records, and if information is disputed, there are multiple mechanisms in place to handle such disputes. LCB will then investigate.


Further, tenants are provided a grace period before data is shared with other credit bureaus, so that tenants have time to review their record and make sure all information is accurate.

For Further Information:

Privacy Policy

Terms of Use

Terms of Service

Specific Legislation Enabling Landlords To Report To LCB

 


Examples of tenants being convicted of fraud for not paying their rent:


For Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, Nunavut, Northwest Territories, and the Yukon:

  • If you have consent from the tenant, that is all you require (Note: we recommend adding the clauses below to your Application for Tenancy and your Lease).
  • If you do not have consent from the tenant, the Federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) enables you to report for certain purposes:
  • Disclosure is allowed without the tenant’s knowledge or consent pursuant to:
    • Section 7(3)(b) for the purpose of collecting a debt owed by the individual to the organization;
    • Section 7(3)(d.1) for the purposes of investigating a breach of an agreement or a contravention of the laws of Canada or a province that has been, is being or is about to be committed;
    • Section 7(3)(d.2) made to another organization and is reasonable for the purposes of detecting or suppressing fraud or of preventing fraud that is likely to be committe
    • Link to the Act: Personal Information Protection and Electronic Documents
  • LCB is registered in Ontario as a consumer reporting agency under 2642985 Ontario Inc. To see the registration go to: Ontario Consumer Reporting Agencies
  • LCB is registered in Saskatchewan as a credit reporting agency under LCB Services Ltd. To see the registration go to: Saskatchewan FCAA 411 Registration and Licensing


For British Columbia:

  • If you have consent from the tenant, that is all you require (Note: we recommend adding the clauses below to your Application for Tenancy and your Lease).
  • If you used LandlordBC’s template “Application for Tenancy”, then you may already have consent from Section E in that application (Note: we still recommend adding the clauses below to your Lease).
  • If you do not have consent from the tenant, the B.C. Personal Information Protection Act (“PIPA”) enables you to report for certain purposes:
  • Disclosure is allowed without the tenant’s consent pursuant to:
    • Section 18(1)(c) it is reasonable to expect that the disclosure with the consent of the individual would compromise an investigation or proceeding and the disclosure is reasonable for purposes related to an investigation or a proceeding;
      • Note: Section 1 defines “investigation” to mean an investigation related to (a) a breach of an agreement, (b)a contravention of an enactment of Canada or a province, (c) a circumstance or conduct that may result in a remedy or relief being available under an enactment, under the common law or in equity, or (d) the prevention of fraud if it is reasonable to believe that the breach, contravention, circumstance, conduct, or fraud in question may occur or may have occurred;
    • Section 18(1)(g) the disclosure is necessary in order to collect a debt owed to the organization;
    • Section 18(2); (3); and (4) may also apply if the above two sections do not.
    • Link to the Act: Personal Information Protection Act
  • Monetary orders from the Residential Tenancy Branch (RTB) are NOT REQUIRED to report to LCB:
    • RTB Decision October 14, 2011: Landlord sent a debt to a collection agency without first establishing an entitlement to recover that amount by way of obtaining a Monetary Order. Such conduct does not negate the tenant’s obligation to pay the landlord. The landlords’ actions, with respect to sending the debt to a collection agency is not a violation of the Residential Tenancy Act, Residential Tenancy Regulations or tenancy agreement. Therefore, any claims related to such conduct fall outside the jurisdiction of the Residential Tenancy Act and its authority to resolve such a dispute. Dispute Resolution Services – Decision1698
    • RTB Decision November 8, 2016: Landlord sent tenant’s debt to a collection agency and did not file any Application for Dispute Resolution with the RTB nor get a monetary order. Tenant complained. The tenant’s application was refused pursuant to section 59(5)(a) of the Residential Tenancy Act because the tenant’s application did not disclose a dispute that may be determined under the Act. Dispute Resolution Services – Decision6592
    • RTB Decision March 8, 2019: Landlord sent tenant’s debt to a collection agency. Tenant complained the Landlord didn’t have a monetary order. Landlord did not apply for a monetary order and thus the RTB did not issue a monetary award in regards to this tenancy. As the Branch was not involved in this matter at any point and did not issue the monetary order, they dismissed the application in its entirety without leave to reapply. Section 9.1(1) of the Residential Tenancy Act. Dispute Resolution Services – Decision6370


For Alberta:

  • If you have consent from the tenant, that is all you require (Note: we recommend adding the clauses below to your Application for Tenancy and your Lease).
  • If you do not have consent from the tenant, the Alberta Personal Information Protection Act (“PIPA”) enables you to report for certain purposes:
  • Disclosure is allowed without the tenant’s consent pursuant to:
    • Section 20(i) the disclosure of the information is necessary in order to collect a debt owed to the organization;
    • Section 20(m) the disclosure of the information is reasonable for the purposes of an investigation or a legal proceeding;
    • Section 20(n) the disclosure of the information is for the purposes of protecting against, or for the prevention, detection or suppression of, fraud, and the information is disclosed to or by(i) an organization that is permitted or otherwise empowered or recognized to carry out any of those purposes (i.e. a reporting agency such as LCB).
    • Link to the Act: Personal Information Protection


For Quebec:

  • We do not currently operate in Quebec.


LCB recommends adding the clauses below to your Application for Tenancy and your Lease: