Is it legal to report to LCB? Is consent required from the tenant?
Yes, it is legal to report tenants’ rent payment habits using the LCB platform. No, landlords and property managers do not require consent from the tenant. Here is how it works:
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 as a reporting agency 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 other Credit Bureaus, positive Tenant Record). 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/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 Application and Lease Clauses in their application for tenancy or lease or by logging into the tenant side of LCB to confirm consent, nothing further is required.
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:
- LCB facilitates tenants to positively impact their credit reports through the inclusion of rent payments.
- LCB assists consumers new to credit (i.e. young people) and new to country (i.e. immigrants) with building a credit file and gaining access to credit.
- LCB enables consumers with thin credit files to positively impact their credit reports and thus unlock credit and better rates for credit.
- 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.
- 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 TransUnion, Equifax, and Experian, 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.
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 state 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.
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.