A Registry That Exposes Bad Tenants and Landlords

In this episode we dive into the innovative business model of Openroom, founded by Weiting Bollu.

Openroom is revolutionizing the rental market! It’s an online database that has the names of tenants and landlords who have been found at fault by the Landlord and Tenant Board.

Openroom helps with the due diligence that all landlords and tenants should go through before agreeing on a residential lease, and in just one year has hosted almost 2 million searches.

With a backlog at Ontario’s Landlord and Tenant Board of 8 months to a year, Openroom helps landlords and tenants avoid this often costly tribunal stage.

Guest: Weiting Bollu, Co-Founder & CEO, Open Room
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Recorded in Sep 2023

Transcript

Desmond Brown (00:00):

We hear about the housing crisis almost every day. The shortage of affordable housing, skyrocketing house prices, election promises to solve the problem, government initiatives to build more housing. While this housing shortage also includes a shortage of rental properties and rental prices have skyrocketed as well. Potential tenants scramble to find something that will work for them at an affordable price. And landlords, while they're always looking for great tenants who will respect their properties while living there, and of course pay the rent every month, but as we know, there are good tenants and bad tenants and there are good landlords and bad landlords. So how do we find the good ones? I'm talking about the good tenants and the good landlords. I'm Desmond Brown and today on Sold in the 6ix I speak to someone who started a new online registry that identifies delinquent tenants and terrible landlords

(01:15):

Weiting Bollu is the founder of Open Room and she joins us today on Sold in the 6ixth Weiting. Welcome.

Weiting Bollu (01:20):

Thank you so much Des for having me.

Desmond Brown (01:22):

Oh, it's my pleasure. So I find what you're doing, just fascinating. So tell me, why did you start Open Room?

Weiting Bollu (01:30):

Yes, why did I start? Because I really feel like people need to be held accountable for their actions. But how we got started was when I was going through an eviction for a nonpayment of rent tenant, it started back in 2020 when I originally wanted to grow, my family wanted to move back into my home. So I had issued the N 12 N twelves, as your listeners might know, it's for the personal use of eviction. And we started there and then it quickly turned into a nonpayment of rent situation as an N four notice. And then from there I went to the landlord and tenant board multiple times, got these court orders, and then I wanted to make this public so that other people don't experience what I had experienced. And then I was told by the Canadian Legal Institute of Information that they basically can't take my submission. And from there I thought, wow, this can't be happening. How do I share more with it with other people? And then that's when we decided, you know what? We're going to go do something about it and build Open Rooms so that we can crowdsource these orders together.

Desmond Brown (02:36):

So you're like a lot of people out there who probably own a home and then you wanted to have an investment property. So you bought an investment property and you were hoping that the tenant that you had in this investment property would pay their rent on a monthly basis regularly. So it would cover the mortgage. It's not a matter of getting rich on a monthly basis like some tenants think landlords do. These are long-term investments and I had Todd Slater on my podcast a couple weeks ago, and he deals with a lot of investors and so on. And we talked about this too, A lot of landlords as a result of tenants not paying the rent, have lost their properties. So tell me a little bit more about the property that you had and how far in arrears was your tenant?

Weiting Bollu (03:25):

Yes. When my partner and I, before we got married, we actually each purchased our own residential home to live in. We didn't know that we were going to get married at the time and we didn't want to count on each other for that. Right. Because we weren't married. And then so each of us had our own property. It was actually not originally an investment property, it was our own. And then because we got married, then we ended up living in his condo at first, but then the condo was not big enough for us when we wanted to grow our family. So then we wanted to move back into my place, which was a detached comb. And then from there, that's when it all turned sour, that whole ordeal. But at the end of the day, I was in about $35,000 of arrears

Desmond Brown (04:11):

And that's quite significant. And in the end, did you manage to keep the property

Weiting Bollu (04:18):

In the end? Both properties? We still have both properties, yes.

Desmond Brown (04:21):

Yeah, you did. And whatever happened with the tenant?

Weiting Bollu (04:25):

The tenant, I am not sure what is going on on their side. They do own a business. I don't really keep in touch because I look at it as it was an expensive, but a good learning experience for me because when I first started, when I looked at being a small housing provider, I did not really know what was going on. I didn't even know that the LTB existed, that there was something called the RTA. And that is really unfortunate and probably very ignorant of me. But that's the reality of many, many housing providers out there. When you start small and start at the beginning, you don't know what you don't know. I don't keep in touch with my tenants.

Desmond Brown (05:08):

Yeah. Okay. So LTB, landlord Tenant Board, R-T-A-

Weiting Bollu (05:14):

RTA Is the Residential Tendencies Act, and that is the one where it lists out all of the rights of both the landlord and the tenants of Ontario and all of the housing providers should abide by the RTA.

Desmond Brown (05:30):

Yes. And providers and the tenants as well. Yeah. Okay. So that's what got you going on opening up Open Room. So tell us a little bit about Open Room. Actually, just lemme just take a step back where, so your tenants just talk about your situation. Your tenant's gone, owed you 35,000 in the end and you finally got them to move out.

Weiting Bollu (06:00):

Yes. Well, I finally mean the sheriff finally evicted them. They moved out the weekend prior to the sheriff coming, and I remember them asking me, we saying, can we have until the end of the month? And I was just sitting there, there is absolutely no way I am going to give up the day that the sheriff is going to arrive and give me vacant possession because I was waiting for this entire process for about two years in preparation. Yes and yes.

Desmond Brown (06:31):

So what was their reason? What excuse did they give you for not paying rent?

Weiting Bollu (06:37):

You know what? To be fair, during the time when it first started, it was the midst of the pandemic. And I know that my tenants were having a hard time making rent. So then they had requested for a rent reduction and we had made prepayment plans or payment arrangements, but none of them were met with an acceptable yes from my tenants. So when I had requested for the move out because of the N 12 personal use, I think it clashed very poorly with the pandemic and the stress that they may have been on. And then it was just a full on collapse of, well, you know what? Now I'm just not going to pay rent anymore. I didn't find out or didn't even bother to ask later on what was going on because that at the end of it does, it just turned completely sour. And there was no point in me asking, I had to hire a paralegal to communicate because I was so stressed out. I didn't even mention that I was actually big belly pregnant during eviction day.

Desmond Brown (07:40):

Yeah. Oh boy. So everything all at once, basically, hey,

Weiting Bollu (07:44):

Yes, I think I was very lucky and very privileged to have the support that I had. I know many housing providers, when they are in this eviction or nonpayment of rent situation from their tenants, they are in extreme extreme distress. Not just from a financial perspective, but we're talking mental health concerns that pop up legal and a whole bunch of things that happen to your body when you're so stressed. And I've heard of miscarriages, for example, but I was very lucky that I was able to deliver a very healthy baby.

Desmond Brown (08:18):

Well, congratulations. There we take. Thank you. So the landlord tenant board, we have a backlog in Ontario of approximately eight months, and we have a lot of tenants who know their rights and know that they can pull up any type of reason they want to not pay, and they know that they can hang in there for a long, long time before anything is ever heard in front of the landlord and tenant board. So anyway, that's just a little bit of a background for anybody out there listening. Let's move on to Open Room and what's been going on with that and the success that you've seeing with it and so on?

Weiting Bollu (08:59):

Yeah. Well, when we look at Open Room and the beginning of it, I did not think that it would turn out to be what it is today and what we will continue to do, it was my partner and I while we were on parental leave deciding one weekend, you know what, we're just going to go build something. So we created a one page single page black and white application. I think some people might still remember when we first went out with that, but when that happened, it was just my specific orders inside the system and we did not expect it to be anything. And then it was actually the small ownership landlords of Ontario that kept talking about us to their specific community members. And from there it really went word of mouth to many, many thousands of people in Ontario. That's now when we got on the radar of CBC back in late January when they had done a little piece on us, and they usually never talk about software companies because they're a news outlet. So when we got onto CBC, that was when we went very viral across Ontario, across Canada, and even some parts of the United States. And that's when we decided, you know what? It's time to quit our jobs and go do this full time.

Desmond Brown (10:14):

Wow, you are doing this full time now.

Weiting Bollu (10:17):

Yes, I am. I quit my job. That's incredible. Well, it's scary. It's thrilling, but scary. And at the same time, very exciting. My co-founder and I do see very, very ripe areas for disruption in the rental ecosystem. We can't believe that our whole situation took two years to resolve. And the hundreds of housing providers out there that we have spoken to, the general feeling is that it is not a great place to rent your house or your second homes. And that's when we get to the whole housing affordability crisis.

Desmond Brown (10:54):

Yes, exactly. I know it is a big risk for somebody to go and mortgage the principal residence, take that equity out either through a line of credit or whatever, mortgaging their house I had just mentioned, and then investing in something else, and then not having somebody pay the rent or something huge happening, like a huge repair or something like that. But tell me about Open Room and how many people have registered now landlords and tenants that have registered on your site?

Weiting Bollu (11:25):

Yeah. Well, right now, as we are speaking, we don't even have a logged in experience yet. So you can go on to Open Room.ca and search retain bulu, and you can even try searching your name, but I don't think you have any orders inside our system, but you can

Desmond Brown (11:40):

Search, find it my criminal justice system.

Weiting Bollu (11:43):

Okay. So you can go on there and search Weiting Bollu and then what will pop out are my past tenancy specific orders because at Open Room we're here to help make informed rental decisions, right? We're working towards a transparent and connected rental ecosystem so that we can show you what you need information wise to make informed decisions. From a tenant perspective. We have very avid tenant supporters as well because they want to make sure that the landlords that need to be held accountable for their bad actions are known. And that is actually very, very important because we don't just cater to tenants who have say, not paid their rent. We also look at ways that we can hold landlords accountable.

Desmond Brown (12:29):

Okay, so what type of information will we find if say I was researching, well say I have a property and John Doe wants to rent from me. So I go on there and I want to look up John Doe. What kind of information would I find?

Weiting Bollu (12:46):

When you look up, John Doe's name what will pop out are tenancy specific orders in the system. So they could be court orders from the tribunals or from Supreme Court, for example. And then you can see the name, the address of the property, and then the actual filing or the actual order that came out from it. Okay, great. And then in there in the order, you can then read information about what exactly happened. So then that way you can make an informed decision. Do you want to rent to John Doe or should you rent from John Doe?

Desmond Brown (13:21):

Okay, so if John doe's name does not come up, that would be a good thing.

Weiting Bollu (13:26):

Absolutely. But at the same time, what I do want to caution is that anybody using the Open Room search piece right now is that not every order in there means that there were bad actions. So for example, it could be that a tenant had taken their landlord to the landlord tenant board LTB for bad faith eviction. From that perspective, a tenant in that case shouldn't be seen as a bad actor. They knew their rights and rightfully so to take their specific landlord to the landlord tenant board. Does that make sense?

Desmond Brown (14:05):

Yeah, yeah. No, it does. It does. Because there's a whole other side to this, right? I know your critics would say, oh, Open Room is skewed more towards the landlords and it's giving tenants a bad name. And how do you respond to that?

Weiting Bollu (14:25):

When we look at why Open Room was built, we have to understand that we're trying to build for a transparent future. And then all of the applications that even get filed into the LTB, it's about what 80 20, give or take, like Pato principle, 80% is filed by the landlords or the housing providers, and then 20% would be from the tenants. And so when we look at that volume, the 80 20 play, we look at, okay, then what is inside open road? Then what is inside Open Road will naturally fall in that 80 20 principle as well. So when I hear critics say that we are leaning towards landlords, but you have to look at the spread of the actual filings.

Desmond Brown (15:08):

Yeah. So tell me a little bit about the, and I hope a little bit about this, but the environment right now for landlords and tenants, and I do get some horror stories because I'm selling houses and I speak to a lot of investors and so on, and some people who have had lost their property. Actually there's a Desmond Brown who writes for CBC and he wrote something about the landlord and tenant's situation. And I got an email. I often get emails for Desmond Brown. I always say, Desmond, get a letter in your name or maybe I'm going to grab a letter in my name so we can distinguish between each other or so people can distinguish between the two of us. But I got somebody texting me just a few weeks ago saying, loved your article. You know what? I need to speak to you, Desmond, because I am owed $40,000 from my tenant right now and I'm going to lose my house. And I got back and I said, I'm sorry, I'm not that Desmond Brown. This is an incredible story. And I actually gave her a paralegal to speak to. So tell me a little bit more about what you're seeing out there and some of the consequences that the landlords are facing.

Weiting Bollu (16:20):

I could actually talk about how we even got into the CBC at first. I think that will answer the question here. When we were approached by CBC, it was actually because a specific housing provider had a specific case of a nonpayment of rent tenant and what he had said about the consequences that he has gone through. Yes, the mortgage payments definitely is super, super financial burden on him, extremely detrimental to his health that he has now experienced mental health concerns and now he has to take medication for it. So when he talked to this reporter, Mike SME at CBC, he had mentioned that he used Open Room to find out that their tenant was actually a repeat offender and their tenant had actually done this to multiple housing providers in the past. From that perspective, it really frustrates me that people can get away with something like that because you can't just go into, say a grocery store and then expect to leave from the grocery store not paying for the groceries. Same thing when it comes to housing is that housing providers, we're running a small business, very small operation, and it is a good and a service that we're providing to the customers who are the tenants. So you can't just not pay rent. That is unacceptable.

Desmond Brown (17:37):

It's so true. There's this misconception amongst some tenants that landlords are fat cats. So maybe if you take a look at, I mean, there was a Toronto Life article about this really bad landlord who had a property or owns a property on Dos Road, you may have read that one. And she's just a terrible, terrible landlord. Like terrible. The things she did to her tenant intimidated them to the point that they left so she could bring somebody else in and so on. But most of the landlords that we have out there are just ordinary people who are just maybe looking to build a little bit of generational wealth by buying another investment property. And they're running on a shoestring for the most part every month, aren't they?

Weiting Bollu (18:24):

Absolutely. Your average housing provider does not make millions of dollars renting a single family home, for example. Or even some of the ones who are say the duplexes. The triplexes, you're not making thousands of millions of dollars off of it. In fact, for condos, for example, I bet that many housing providers are actually running in the red because it's not just about mortgage payments. That is a cost to running a rental business. There are so many other factors to it, and I think that when it comes to the sentiment of landlords racking up all of these homes, people only think, oh, I'm a tenant and I'm paying for my landlord's mortgage. But there is so much, so much more costs to it, like your maintenance, your utilities, the list goes on and on, and people don't see that and it doesn't get talked about because it's not sexy.

Desmond Brown (19:24):

There are some really, really good tenants there. And we have had investment properties and I've helped manage investment properties. We have some fantastic tenants there. So if there are any tenants out there listening, I'm sorry if you may take this the wrong way, but there are some really, really good tenants. There are some bad tenants, there are some bad landlords, but you talked about these professional bad tenants scam artists, and we read about them every now and then in the news that especially in the luxury property market that are paying where the rents are four or 5, 6, 7, even $10,000 a month who go in and maybe pay the first month. And then after that they don't. And then they know their rights and they're in there and they end up leaving eventually after a year. But we're talking sometimes in these cases, some landlords are going to be out hundreds of thousands of dollars.

Weiting Bollu (20:17):

Absolutely. Two comments there is, number one, you're absolutely right. The majority of tenants are fantastic, responsible, take care of the properties and abide by the agreement, the Ontario Standard lease that has been signed and pay their rent. So kudos to the tenants that are there and have a great relationship with their housing provider. On the other part, when we look at these professional tenants, I think that we can't just blame the professional tenants. I think a good part of it is actually the housing provider or perhaps the real estate agent that had actually vetted the tenant, because there's probably ignorance or you don't know what you don't know when you are looking at a profile, an application that comes in front of you. So I've heard that many individuals or housing providers will try to go and get a realtor to help them rent out their home. But then all the realtor, the sentiment is that all the realtor wants to do is get the first month's rent to get it rented as fast as possible. They don't do much due diligence, and that is a bad reputation when we look at some of the great realtors that are out there. When that happens, I feel like it is on the housing provider to have done better or to have known how to vet tenants better.

Desmond Brown (21:38):

Exactly. I'm glad you brought this up about realtors, because that's a big part of our business right now, our rentals, and we do it for our clients who have bought investment properties. And sometimes I have clients who are like, they're moving out of town to their cottage and they want to keep their properties here. But vetting is so important, and I'll tell you what we've run into. So we asked for the credit check, we asked for letters of employment, we asked for id of course. So we want to make sure that that is the real person that is renting it. But let me tell you what I've run into. We have letters of employ had letter. I'll tell you one situation. I had a letter of employment come in one time, and what we do is we make the phone calls, we call their employers, we call their references. So in this particular case, we called the employer and said, yes, we have an application from one of your employees and she is wanting to rent this property that we have. The employer says, I'm sorry, but I've never heard of this person.

(22:50):

So this person had put together a bogus letter with a bogus employer, a bogus employment letter that also said how much she had made per year or what she was making per year. And if we had not made those phone calls, we would've ended up renting to somebody who was not legit. So it was really, really important that us as realtors, even when the other realtor brings in, so we have the cooperating realtors slash cooperating brokers who bring us to tenants, and they'll sometimes send us, actually, not sometimes in most cases, they'll send us the whole package. So the package being the offer to lease the first and last month's rent, saying a photocopy of the check or whatever, saying that this is going to go into your trust account tomorrow. And then the rental application form, of course it has all their references, how much they make per month, where they're living, their previous landlords and so on, and also their employment letters.

(23:54):

Some agents will just take those and go, oh, this is a strong candidate. Take them to the landlord. On my team, we make all of the phone calls, we call everybody, and we also do our own credit check because we've also had situations where the potential tenants have fabricated their credit scores. So we do all of that. So it's really, really important. So we don't make a lot of money doing this because rents or leases are one month's rent. So if the lease is for 2,500, then we split it with each agent. So we're getting 1250 each a month. But it's so important. It's so important that we do all that. So you're right, the vetting process is one of the most important things anyone can do. If you're renting on your own out there as a landlord, you make sure you do all of this. If you have an agent, make sure your agent does the due diligence on your behalf.

Weiting Bollu (24:50):

Absolutely. If I rewind back to how I had vetted my tenants back in the day, it was a slew of classic mistakes that I believe many landlords or housing providers do today. I made a video on Instagram that had gotten over half a million views on it because I guess people like to relish in my misery. They probably also find it funny, but at the same time, a good video that tells 'em what they should actually do because then they can just learn from me and my mistakes. So some of the things that I didn't do back in the day was I didn't take a photo of the photo id. I only saw it just to verify, but I only got one of the two tenants that I put on the lease. I didn't even sign the Ontario Standard Lease. That was back in the 2017 version of it.

(25:43):

I had a lease, but it wasn't the same as the official government mandated one. Okay. Exactly, exactly. And then I didn't check for previous landlords or housing providers that they had lived with. At least they gave me a reference letter, but I didn't go and call them. So for me, I think one of my biggest mistakes was in a rush to rent it out that I just skipped all of this. I was just so giddy and happy that, hey, somebody actually wants my property. But to anybody that is listening who is a housing provider and thinking about renting, don't ever be in a rush.

Desmond Brown (26:20):

Yeah, exactly. Do what you have to do to make sure you screen these people. Oh boy. In a worst case scenario, I'll tell you about this. And we had John Lancaster on who's a journalist who uncovered, or he and his team uncovered this. There was a tenant who rented a property down here in the beaches, and they ended up putting it on the market after

Weiting Bollu (26:44):

I heard so many of that.

Desmond Brown (26:46):

Exactly. And so it went on the market. They got multiple offers on this thing, and then luckily, the neighbors were curious about what's going on. They knew the owners who had been there for like 40 years, 50 years, and they got in touch with 'em saying, you're selling your property. We thought you just rented it. They said, what? So that was one of the fraud cases that came up, and the actual property was sold on the MLS. And luckily it never did change hands. It never changed hands because when it got to the lawyer level, it stopped because they weren't the real people selling it. But that's a worst case scenario. We think that's crazy. And that's happened a number of times.

Weiting Bollu (27:27):

Yeah. Let me share a story. I know of a housing provider who actually ended up writing an entire book. Kevin Costain, he wrote a book because as a housing provider, he had a tenant who literally burned down his house. Have you heard of that?

Desmond Brown (27:40):

No.

Weiting Bollu (27:42):

Yes. Started a fire in the house, and it was a semi-detached home, so I don't even know what happened to the other side of the home, but the current, his side of the home, Kevin's home completely burned down. Police showed up and it was a whole ordeal, and they were still building, I think it was about half a million in damages, but a good thing he had insurance.

Desmond Brown (28:04):

Yeah, yeah, insurance is important.

Weiting Bollu (28:07):

Yeah. Yeah. So those are some of the stories. I mean, we laugh about it right now, but when you're in the moment experiencing it, it is awful,

Desmond Brown (28:15):

Horrific for people. It really is. Okay, so we got to wrap up here. But again, what else can people expect when they go to Open Room? And I mean Open Room from our conversation, it's a starting point. After that, you've got to do your due diligence to make sure you get the right tenant. But just quickly wrap up for us on what other things we can expect there from Open Room?

Weiting Bollu (28:40):

Yes. In the future for Open Room, what we're here to do is help you make an informed decision. So our user base will be the housing providers, the tenants, the rail tours, legal professionals. If you have something to do in the rental ecosystem, we want to be able to give you that information and that future towards that transparent and connected rental ecosystem. We're looking at, well, what is transparency? It is the sense that you have the information to help you make that informed decision. And then number two is that connected piece. What does connected mean? And who we really want to focus on are the small individual business owners, such as these housing providers or realtors. When you look at it, you don't have the same access to the systems such as the big REITs or the large property management firms. So what can Open Room help you do to run a compliant business when it comes to the rental ecosystem, and what does that all entail? There will be many more coming down the lines, which we'll share on our website, www.Open Room, dot ca in the future.

Desmond Brown (29:41):

Yeah, fantastic. And you talked about the big providers and the REITs. They can afford to have tenants go into arrears and be delinquent in their rent, but you can't. I can't.

Weiting Bollu (29:56):

Yes. Yes. And you know what, something, I was reading an article that you were commenting on in the Toronto Star about retirees downsizing their homes and wanting to rent. I found that actually very, very interesting because when we look at all of the folks who want to rent homes, now we have new fresh grads, and then the people who are in the market, like the folks who are retirees, all of this, when we look at housing providers no longer wanting to open up their second homes or build second homes or lane suites to rent out, you have that low supply, but then you have high demand. And then when that clashes, how are we ever going to get out of the housing crisis?

Desmond Brown (30:40):

Yeah. Oh my goodness. That's for another day. And like I said in my introduction, this is something the governments are dealing with or trying to deal with every day, and it's election promise after election promise at every level of government. And who knows, we don't see a solution to this anytime soon. We say, not at all, not at all. But des,

Weiting Bollu (31:04):

I don't think that it's a one player. I don't think it's a one player that has to solve everything. Right. I think that if you have a solution and you see these problems that are existing, come out and offer a solution because it's not a one player takes all. We can't just expect the government to do everything or expect Open Room to solve everything it should be anybody who has skin in the game want to be part of the solution. Raise your hand and do something about it. Stop complaining.

Desmond Brown (31:31):

Yes, exactly. Okay, so we ing before you leave, give us the address, the website address, or for people to access Open Room.

Weiting Bollu (31:40):

Www.Open Room. Do ca. Open Room is spelled O-P-E-N-R-O-O-M.

Desmond Brown (31:49):

Great. Thank you very much. And thank you very much for joining me today. This was really, really great and really informative. And anyone out there who is a landlord or thinking of being a landlord, turn to Open Room first and then do your due diligence and get in touch with me. I'll help you as well. Okay. All the best to you. We take.

Weiting Bollu (32:09):

Thank you, Des. Bye everyone.

Desmond Brown (32:12):

And that's our latest episode of Sold in the 6ix. Now, one thing that we, Tim did not mention is that she's getting more than 50,000 visits to Open Room every month. And over the course of a year, we're looking at millions of searches. This is incredible. Anyway, visit Open Room if you are a landlord or a tenant and you need to know a little bit more about who you're going to be dealing with. I'd like to thank my producer, Doug Downs of stories and strategies for this latest podcast. And of course, like I always say, if you like this podcast, please subscribe, leave a rating and send it to a friend, and please leave that rating. All you have to do is go to the show notes and it's one click to leave that rating, and a five out of five would thank you for that. Stay in touch with me. You can email me at des@desmondbrown.ca and also follow me on all of the social media platforms. My handle is des in the 6ix. That's number 6ix ix. And if you're a realtor outside of Toronto and you need someone to look after your clients who are either moving to or from the greater Toronto area, please keep in mind, I promise that your clients will be well looked after. Next time. I'm Desmond Brown.