Newcomer renting becomes easier
Mississauga is a newcomer’s dream city, attracting many first time buyers and renters. If you are a new immigrant to Canada, you will be surprised to see how easy it is to buy a home in Mississauga than rent.
We work with many investors (landlords) and newcomer first time buyers in Mississauga.
When it comes to property investment, we’ve seen how surprised newcomers are at our Canadian banking system that makes it so easy for those with no credit history or job to buy a home. How is that possible?
Newcomers can even buy a property
Most Canadian banks allow newcomers to invest simply by putting in 35% or more in down payment if they have no credit history or a job in Canada. Banks provide a mortgage loan on the balance amount (65%). There is no difference in the way new immigrants and local Canadians are treated on interest rates. In fact, newcomers can now buy a property with only 5% down payment.
People on Work Permit can also buy a property
People on a work permit can also buy a property in and around Mississauga. However, if you buy immediately upon arriving in Canada, you will be hit by 15% Foreign Buyer Tax. This amount is reimbursed to you when you get your Permanent Residence (PR). Rules keep changing so please contact Team Amit Kalia, who can put you in touch with seasoned mortgage specialists, and help you buy your first home in the GTA. You may even want to also explore the Rent Now – Buy Later Program.
Newcomer renting requirements
However, new immigrant tenants do face a hard time when it comes to renting in Mississauga. Most landlords hesitate to rent out to newcomers with no job or credit history. Sometimes tenants are asked to refer a guarantor with a good job and credit history in Canada. If they are new to Canada and don’t have friends or relatives, that’s a tough challenge. Even if they find such a person, the guarantor may be uncomfortable sharing personal details such as credit history and finances to help another tenant lease a home.
In Ontario, the rules have however changed. Earlier the rental laws were tougher when it came to paying more rent in advance over the standard first and last month’s rent. Landlords were not allowed to receive more than the first and last month’s rent from the time the tenant moved in.
The court allows tenants to pay an extra amount up front, provided the offer is from no one but the tenant alone. This could include a deposit to cover damages or clean up the unit by tenants with pets. A case in the Ontario Superior Court brought up this matter of lease negotiations between landlords and tenants, serving many lessons.
An English lady in Mississauga agreed to rent a home from a landlord for a duration of one year. She was visiting Canada on a visitor’s visa, hoping to extend her time through a work visa and was concerned about maintaining the monthly payments. She paid one year’s rent in advance to demonstrate her earnestness, along with a security deposit (to cover potential damages to the premises from her pet). The landlord had no reason to decline.
But under the Ontario Residential Tenancies Act as discussed above, the landlord cannot ask for more than the first and last month’s rent to allow a tenant to move in. The Act strictly states that anything in a lease that violates the Act is void. After moving in, the tenant went to the court with an application to demand back the extra month’s rent and security deposit, claiming that the landlord played foul and demanded the extra amount from her. The Judge of the Superior Court of Ontario looked at the evidence (a text sent by the tenant’s real estate agent to the landlord’s agent that said tenant will pay 12 month’s rent up front) and based on that he decided that since the tenant offered the money up-front, it was legal. Since the security deposit was not offered by the tenant, the landlord was forced to pay up.
The case was appealed later and the Superior court’s judge also agreed with the previous Judge that a landlord could not demand beyond the first and last month’s rent from the tenant. If the landlord accepted bulk rent in advance that is voluntarily offered by the tenant, then it is legal. The court also held that interest on the entire prepayment of rent had to be paid by the landlord, in accordance with the rate prescribed under the Act.
In this light, we can see how the court has relaxed the conditions and made rent prepayment easier for both tenants and landlords. Mississauga has a choice of housing for new immigrants now seeking to rent.