Episode 55: A Transparent Rental Ecosystem with Openroom CEO
Co-host, RISE Network
Weiting Bollu discusses the legality of Openroom and non-payment of rent statistics in Ontario.
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Interview Launch: Jun 21, 2024
This podcast episode of "David and David on Real Estate" features an interview with Weiting Bollu, co-founder and CEO of Openroom.Â
In this discussion, Bollu outlines Openroom’s role in creating a transparent rental ecosystem and explains the platform's approach to handling N12 applications (notices for landlords to end tenancies for personal use). As well, Bollu showshow Openroom has adapted their practices based on community feedback.Â
The conversation also touches on the challenges faced by both landlords and tenants, including issues of bad faith evictions and the importance of protecting tenants' rights.
The latter part of the podcast delves into broader issues affecting the real estate market, including the impact of new legislation such as the Renters Bill of Rights and Bill C-365(Consumer-led Banking Act), which focus on the implementation of a consumer-led banking system for Canadians.Â
Bollu discusses how these changes could potentially benefit both landlords and tenants, particularly in terms of rent reporting and credit scores. The hosts and Bollu emphasize the importance of education and building confidence in the rental ecosystem, especially for small landlords who own a significant portion of the rental stock.Â
They express optimism about Openroom's role in addressing some aspects of the housing crisis by encouraging more people to become landlords and fostering a more connected rental ecosystem.
David Gorski: Good morning and welcome to David and David on Real Estate. Today we have Weiting back with us from Openroom, and we are in episode number 132. And I'm excited for this one because we're going to talk about the future of the landlord and tenant industry and how Openroom is revolutionizing. I'm going to use that word, that relationship, that space, and bring some important changes to the industry.
Weiting Bollu: Awesome. Thank you, David and David, for having me on the podcast. My name is Weiting Bollu and I am the co-founder and CEO of Openroom. At Openroom, what we do currently is aggregate tenancy specific court orders, and we make it searchable by the public.
David Korman: At your website and the type of things that you are uploading and the content that you have. The one thing that sort of stood out for me, and I just need you to clarify, I did not think, based on what I was reading there, that you were getting involved on N12 applications, which are applications for anybody that doesn't know it's someone is applying to get rid of a tenant because they're saying, I need this for my own personal use. I intend to live there myself. And as someone who's like, in our firm, we're transaction oriented. We're always acting on transactions. We're not getting involved when tenant disputes, when it's my place is in disrepair or someone hasn't paid rent, we're not involved in that type of thing. But we're always involved in transactions where someone's going to buy the property. But we want to give an N12 to get rid of the tenant because the buyer wants it for their own use. So maybe, I think I may have misunderstood the content on there because you do have the decisions there. Maybe you'll clarify better than I could exactly how you do approach the N12 applications.
Weiting Bollu: Absolutely. And I think that has been many, there has been many discussions on Facebook and Reddit about the N12. So I think it all comes down to terminology. All right. So to educate everybody on this very briefly, is that there are three phases to the LTB when you want to go to the LTB. So the first phase is that notice, the notice that the landlord or the tenant serves the other party. So landlord could give an N12 notice to the tenant for personal use reasons, such as I've sold the property or for personal use. I got to go in there. I want to live there. Okay. Once that is served, then you file an L1 application. And when it relates to the N12, it is what we call the L2 application. L2Â application is just the application you filed. You paid, I think right now it's about $186 for the filing fee. And then you wait several months for that hearing at the tribunals or the LTB, and that after you go to the hearing, you land with what we call the order, the decision from the member or the adjudicator at the tribunal. LTB. What Openroom accepts is that third phase, we accept all types of LTB decisions, whether it is N12 related, N4 related. Basically, if it's that final phase three, we will accept it. What we will no longer accept is that second phase, the application. But we had actually never accepted L2 applications based on the N12 personal use or sale reasons. Okay. But going forward, when we come out with the next big thing that we could talk about is that we won't accept it at all. And there are some reasons behind that, is that we came out accepting applications because we felt that the LTB delay was really hindering people. But when we came out with it, I'll give you some statistics, is that we only received about 300 applications in phase two. So when we look at 300 versus how many, we've got 15,000 in the system, that's a tiny, like, less than 2%. It's not worthwhile for our energy to spend time looking at applications, validating if they were right. And the second reason for that is that we do look at feedback from the community very seriously. And there were concerns about. All right, this is a pre hearing before someone had gone to a hearing. Should you be accepting any types of applications in general? And the consensus from our team is that, you know what the community is right. First, we shouldn't spend more energy on it because it's a small amount. But second is that the community speaks and it's not. We're not finding as much value in that.
David Gorski: Yeah, I mean, again, it's gray area. Right. Because from the time that an application is filed to the time that you get a final decision, you're talking sometimes 6789 months. And that's, you know, the period of time where that professional tenant is going to, you know, go ahead and try to do what they do best and, you know, make. Make another reoccurrence occur. So I totally get, you know, why you'd like to post those applications. And as a. As a notice or as an information only without, you know, hey, this is just to put you on notice. If you're looking to vet a tenant right now, then you know, just understand that this is going through the system and there might be something here, but it's not guaranteed and it's not factual. Right. And this is where the community, if I'm a tenant, well, it hasn't been decided, cases hasn't been presented. It's not factual statement. So why is my name being published out there? I want the ability to have an untarnished reputation. And I mean, this is where it's that pull and pull feature where you want to do the right thing, but you're getting pushback from the community, which is understandable.
Weiting Bollu: I'd make a comment to that is that it is actually factual. Right. And it's actually obtainable. So applications and even notices are obtainable from the LTB. We have done freedom of information requests to the LTB, and they send you everything included in that file. So if there was that final order, the application, the notice filing, or the notice issuance that you had given, it all comes to you. And sometimes the evidence comes as well. So when we look at what is public information, all of that can be requested by the public from the LTB. So when we look at, okay, did that application go to that final hearing? And then why I say it's factual is because it then is considered in part in that final decision.
David Gorski:Right. But I mean, factual in the point that it hasn't really been verified or been ruled on. Right. So, I mean, anybody can submit anything. It doesn't, you know, it doesn't make.
David Korman:It's like they're allegations.
David Gorski: They're allegations at that point, but they're not.
David Korman:It hasn't been adjudicated.
David Gorski: We can put, you know, he has my back.
David Korman: All good, if, you know, truth be told, I just weigh in once in a while.
Weiting Bollu: Well, we can debate, right, on podcasts. It's good to debate. It's all good.
David Korman:Yeah, I find it all interesting, but the first two podcasts that we did with you, we talked a lot about from the professional tenants and the abuse of the system from that point of view. And the reason I sort of wanted to bring up the N12 as an example, because we do, we're very much transaction oriented, and that's my business, that's David's business, and one of the agents that are watching listening to this. And then the N12 is a really good example of how landlords abuse the system, too, because landlords say, I'm a landlord, I want to make some money. My tenant's not paying enough rent. I can't get rid of the tenant. I don't like this tenant forever. I can't get rid of the tenant by all these other means. Here's a way I can get rid of the tenant. I'm going to bring an application that I want this for my own use, or I'm selling it to a buyer and the buyer wants it, but it's not factually true. But they're bringing those type of applications and we get asked or we see them a lot of times on transactions. I had one the other day where the buyer saying, I'm going to bring this to N12 because I'm going to move in my own purpose.
Really? For your own purpose, you're moving into this, but don't you live somewhere else? Yeah, but there's five, five bedroom place here. I'm going to move into one and then I'm going to rent out the other four. But I can bring the application that I want this for my own personal use. I'll go like in my mind right away, you know, how long is that going to lie? If it's true, he's going to actually move into the one bedroom and share with four strangers. It's just a scheme to try and get the tenant out using that N12. Right. And I think we need people to go to your platform and see examples of what a proper N12 is and what's not a proper N12 and what's an abuse of the system because people are trying to scheme it and use that all the time. So we have a lot of bad actors on the landlord side too.
Weiting Bollu:Absolutely. Oh, wow. The number of bad faith evictions. Actually, soon you'll be able to search bad faith evictions and what we do to protect the tenant side, because in bad faith evictions, tenants are in the right. They didn't do anything wrong. So what we do is actually prevent their name from being searchable in the system. And we believe that, yeah, that was a change that we had done sometime in February 2024 because we heard the community, community talked about the N12 cases. And you know what? We listen, right, as I was saying earlier, is that we really, really value the feedback and the talk that is happening in the community because we're all about how can we be more customer obsessed. And from there we looked at what was being talked about and we decided, you know what? Absolutely right. We will redact the search capability of the names waiting.
David Gorski:Do you have like a list of those decisions that you guys have made internally by listening to the community and by really applying logic and common sense to some of these things. Cause, you know, I love that, um, you know, the fact that you guys are pretty protecting tenants in those situations where they've done nothing wrong and, you know, a lender will come to your system, put in a name. Oh, I see. You know, David Gorski's on the list, and I'm not going to bother reading. I'm just going to, you know, deny this application and, you know, feel good about myself that, you know, hey, yes, I protected myself. And, you know, I have 100 applications. I'm going to go to the next one. And David Gorski did nothing wrong because, you know, the landlord evicted him in bad faith. So do you have a list of decisions that you guys have made? You know, where you're listening to community feedback and you're applying this logic to some of these decisions?
Weiting Bollu:The short answer to that is yes, and I'm so happy that you asked about that, because some of the philosophy of building a software product here at Openroom is that we want to build in public. We want all of you to build with us. Right. Our community building with us. So one of which ways that we've shared with the community about our decisions and the way that we build is through our newsletter. So every single month, I send out very, very personal, behind the scenes operations of Openroom, where in, I think it was March when I first discussed the reasons of redacting certain names on dismissed bad faith eviction orders. I mean, there are way more, many more decisions that are coming out. But what elsewhere we started to write a lot more. So you hear from me personally, publicly, on the website where we will document, like, which date we made certain decisions and why we made those decisions. So that is coming very, very soon, including the one we just talked about on no longer accepting applications and reasons.
David Gorski:Why, if you can share that newsletter or add me to it, or if you have a list of certain of these decisions that you undertook, like, I'd love to, you know, educate myself a little bit more and kind of dig in and understand, you know, the thought process behind some of them, because, you know, I think, you know, there's a lot of value there as well, from an education point of view.
Weiting Bollu:Yeah, I mean, I want everybody to know that Openroom is a very small operation over here. Right. We have just my co founder and I working on this full time. We're not a hundred person company. There are things that we, we have challenges with and people have pointed out, but what we want everybody to know is that your opinion matters to us and we are paying attention.
David Gorski:Yeah, yeah, no, I, again, what you guys are doing is great. And, you know, I want you guys to grow bigger and to get bigger and to get more resources so you can enact even more change. I think that's really, really important.
Weiting Bollu:Gorski, are you saying you're going to invest in us? I'm just kidding.
David Gorski: You know what, it's funny you bring that up because I'd love to have that conversation.
Weiting Boll: Sounds good.
David Gorski:You guys are open to it?
Weiting Bollu: Yeah. I don't know if Corman's legal firm looks at M&A or, sorry, at equity share plans and stuff. Maybe he'll be the legal team we got to use.
David Korman:This is all being recorded. So.
Weiting Bollu: You'll come back to me in the future?Â
David Gorski: I think we're very aligned in terms of what we want to do with the industry. What's one of the reasons why we started this podcasts? One of the reasons why I started the REI institute, it's one of the reasons why I got involved in my brokerage is because, you know, I want to give back and enact change. And, you know, I'm an investor, I'm a landlord, you know, and I think this is this a point where, you know, our industry really struggles. So to see forward thinking entrepreneurs like you that are making changes in a big way. And really, you know, this is the first time in a long time that I'm really excited about news that's coming out of the landlord and tenant area. You know, like we hear about the tenants Bill of Rights and we hear hear, you know, the liberal government enacting more and more rules that are in favor of the tenants. And what it's doing is it's driving investors away from the market. Like we're seeing that right now with the capital gain tax, gains tax. And, you know, I'm talking to people and they're moving out of Canada. Not only are they not buying investment properties, but the shift is so severe that I think when I see entrepreneurs like you and products like yours coming into the marketplace, I get excited about investing. I get excited about this industry and this topic. And it goes both ways. I love the fact that you guys are empowering tenants, too. And I love the fact that you guys are talking about bad faith evictions. I can't even tell you guys how many realtors on a regular basis will call me and say, David, I've listed a property for sale. How do I serve an N12? And I'm like, you listed a property for sale. Why are you serving anything? Oh, because we're going to be offering vacant possession on the sale date. And I'm like, that's not your decision. You don't understand anything about the RTI or the tenant rights or what your job is in that situation. So it's frustrating, but it's great to see that we're raising the bar together.
Weiting Bollu: Yes, I do believe that Openroom has a role to play in the housing crisis. When we look at why we're trying to do what we're doing, it's really, can we build great innovative solutions to help provide that confidence or bring back that confidence in housing providers and bring housing providers confidence in opening up their basement suites, build laneway suites, open up their properties. Because as you said, David, people are not opening up their properties anymore. People are so afraid of getting a bad tenant. Even though if we look at percentages wise, like 90% of the tenants are going to be fine. Right. But people are so scared because of the stories and the legislation that might, that might be coming out the renters bill of rights.
David Gorski: Yeah.
David Korman:I think your platform is doing a great job of leveling the playing field. So there's information available, both sides, landlord side, tenant side. They've got a place to look to figure out what their rights are. Because the tribunal process itself, the way it's designed, everything is difficult. It's a tremendous time factor. Aside from just getting bad results, the time factor is a killer. And like you said, it would cause anybody that wants to open up part of their property to renters to pause. But if they can have a little more confidence in the system, that there's a backup. So if they do get, if they are the unlucky percentage that gets a bad tenant, that, you know, there's recourse to them. There's a way to get out the system. But how about if here's a way to help you prevent from getting that tenant in the first place because you've got a database to look at and not select that and find another tenant, improve your odds, and then you're more open to rent out your property. So I think this is great. I congratulate you for coming up with this and for keeping it going and looking for the next evolution of your platform. This is fabulous.
Weiting Bollu: Thanks.
David Gorski: So let's talk about that a little bit. Let's talk about where you envision your platform going. In the first episode, we talked about the fact that four out of five orders are not collectible. You talked about tenants doing the right thing, coming back and paying some of those bills and possibly rating tenants that come back into the system and do that. So talk to us about some of the other things we can expect coming down the pipeline and changes that are coming in the future with your software.
Weiting Bollu: Yeah. Before I dive into what our software will or will not be doing, I'd like to share with your demographic a little bit more about some of the legislation. Right. So there is the renters bill of rights, but there's also open banking legislation. So I think your audience might already be somewhat familiar with the Renters Bill of Rights. But some of the major pieces in here, as I read what was published, is like launching $15 million for tenant protection to give to legal aid and tenants rights advocacy organizations. Or they'll disclose, want us to disclose a clear history of apartment pricing so renters can fairly bargain, or they'll call on the landlords, banks, credit bureaus, and fintech companies to get. Make sure that renters get credit for on time rent payments. This last piece is very, very interesting to us, this getting credit for on time payments. And this is something that we're looking into. But the first thing that we're coming out with in the next couple of months is bad debt reporting. Why is that so important to us at openroom? Because many of the orders that land in our system is from nonpayment of rent. And the next natural steps that people want is, well, how do I make sure that it hits the credit score? So this is something that we're going to be looking into. Okay. And then I want to talk a little bit more about the open banking. Have you two come across open banking legislation at all?
David Gorski: No, actually, this is the first time I'm hearing about it.
Weiting Bollu: Okay. So it's called the Bill C 365, and it's an act respecting the implementation of consumer led banking systems for Canadians. Okay. I didn't know that we needed this until I dove into Openroom and our banking industry, and this is super relevant. I'll tell you why. So when we look at Canada's banking ecosystem, it is owned, oligopoly, owned by these five large banks. What does that mean? It means as small players, it's very difficult for them to access the financial data that could provide innovation in the ecosystem. Okay, so an analogy. So analogy of Google. So you know how we do single sign on, you press Google and you're able to log in, right, you as a user on, say, Openrooms platform. Openroom trusts Google. You trust Google. So then you're able to send that data verification over and share that data with the company that is requesting for that data. So that is similar to what open banking is trying to do is how do we access more of that financial data? Okay. And that is super important in the world of rent reporting because it's very difficult to do it today, at least properly, if you don't have that. So it's a great time for Trudeau's government to come out saying stuff like the credit reporting. And you have the legislation coming out for Bill C 365 about open banking is that it's all getting there to get financial data flowing so you can get to better on time rent reporting or bad debt reporting. Okay, I'll pause there for a second. Did that fly over your head or you caused some of that?
David Korman: I'm going to go back to law school so I can understand this better.
David Gorski: Yeah, well, I. Listen, I think it all kind of works hand in hand together. I think, you know, it's interesting to see how the liberal government conducts themselves because for me, it's when I hear some of this law being enacted, they kind of 80% towards the tenant and then they give the landlord something. But in this case, I think what they've given the landlords is substantial because for the first time, to have more access to the banking industry and to be able to report these non payments of debt on the credit bureau is huge. It could really move the needle in a big way in terms of eliminating professional tenants and really to bring the whole ecosystem into balance, because right now you get an order, tenant has no assets, they're self employed like your tenants were on your property, where it's mostly a cash business. And unfortunately, you're out of luck, there's really no mechanism to prevent really any consequences to your tenant. But now with this open reporting and with the ability to post on credit bureaus again and the information that you guys are putting out, it's creating an ecosystem where eventually it's going to cut up, catch up with these professional tenants.
Weiting Bollu: Yes. And the fact that open banking is going to be important in this legislation play is that it can massively help the rental ecosystem because then you can verify the transfer of rental payments easily without the big five banks just holding all of that data and not sharing all of that data. Right? Yes. But what's interesting is that you didn't hear about Trudeau coming out saying the bad debt piece. It's really honed in on the tenants and how it will benefit the renters in terms of on time rent reporting. So that's why. Yeah, yeah. And I totally get it because as a politician. You are trying to appease the demographic that will give you the most votes. Right, I get it. And how I see it is that there's an opportunity for Openroom to play in an environment where we can help both sides of the landlords and the tenant of.
David Gorski: Yeah, and that starts with education, which is a big aspect of this, and making sure that we bring more people back to the table and get them excited about becoming a landlord again. I mean, I think that's the biggest piece here, is that's going to solve a lot of the housing supply. Like, when we look at statistics, we see that there's more and more Canadians renting. And if that's the case, we need more landlords to house those renters. That's just the reality. And those statistics on rentership, they're going up in every age category. It's not just the millennials. Everybody, even. Even the 70 years plus, is renting more. They're selling their major assets, they're taking money out, and they're living lives. They're renting. They're renting apartments, they're renting more real estate. So rentership is going up across all age demographics, and it's the landlords that are gonna be housing these people. And we need to make landlords and encourage people to come back into that space.
Weiting Bollu: Yeah. David Gortsky. It's not even just landlords, it's small landlords. Because small landlords own 49% of all of the rental stock. Right. All of these large landlords, they have various policies. They can be running things in their own way, and they have power. But when it comes to small landlords, because all of these housing providers are so fragmented, it's very difficult to have that connected rental ecosystem. And I'm really hoping that with Openroom, all the things that were coming out in the future as solutions, I really hope that we get to bring together more of us so that we can be more connected.
David Gorski: Love it. Love it. Well, this has been a great conversation, something I'm very passionate about. You know, really was looking forward to having you on the show. And, you know, I. I always learned so much doing these podcasts, but, you know, I. For the first time in a really long time, I'm really excited about the changes that we're seeing, the landlord and tenant industry. And I can't wait to see what's coming down the pipeline. And, you know, it was great to get educated about, you know, the tenants Bill of rights and open banking and how that's going to really move the needle in a big way and hopefully get people excited about coming back into this industry and, you know, really solve a lot of the issues that we're seeing in the marketplace right now as well.
Weiting Bollu: You got it.
David Korman: Yeah. I congratulate you as well on this. This is really like, like, it's a great platform for people to check out. It's really going to help whether you're on the landlord side, the tenant side, transactional side of things. Information that's available like this that was not available before is huge. And it's going to help everybody make better decisions in how they're going to invest in properties and whether they're going to be landlords or tenants. So I congratulate you again. This is great and glad you figured this out when nobody else could.
Weiting Bollu: Well, David Gorman, David Gorski and your audience, thank you all very much for supporting Openroom. I am baffled by the support that we have. Like, I just sit here, I'm like, oh, my gosh, I can't believe it, that it's all word of mouth. We've spent $0 in advertising and everybody's sharing it with each other. That, so I'm just very, very appreciative of everybody wanting to support the future that we're trying to create and knowing that I'm not here to weaponize the data that we have.
David Gorski: Yeah. And for our audience listening, please go to Openroom, log in, get involved, upload cases on both sides, tenants and landlord issues. The more information we have on the platform, the stronger the community is going to become.
Weiting Bollu: Absolutely. Thanks very much for having me.
David Gorski: Thank you so much for joining us today.
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David is a Serial Entrepreneur, who has a passion for all things Real Estate. David loves playing a competitive game of tennis, is active in the boxing scene, and enjoys the turbulence of the sea when sailing. Early in Davids career, he has had the privilege of being mentored by one of the top real estate brokers in the Greater Toronto Area, and now enjoys providing the same guidance and inspiration to over 200+ realtors at Sutton Group - Summit Realty.David has also co-founded the Real Estate Investment Institute (REI Institute), a comprehensive designation program that is the first of its kind in the industry that helps agent do more deals by working with Investors. David is never satisfied with the status quo- he challenges those around him, to achieve greater levels of success. If you share Davids passion for business and personal growth, reach out to him- he is always looking to meet like minded individuals. "Life is beautiful, not because of the things we see or do. Life is beautiful because of the people we meet."David is a frequent lecturer and panel member at seminars, webinars and workshops for real estate agents, Investors and home buyers. Please make sure to catch “David & David on Real Estate” – David’s featured Podcast which can be heard on RadioPublic, Spotify, Breaker, Anchor and Google Podcasts!
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