Wednesday, June 27, 2012

My Top 13 Lucky Tips for Staying Out of Trouble

I feel like I'm always getting landlords out of trouble, protecting them from their own foolish errors.  Certainly more training is needed and some landlords don't seem to have the time to take one of my courses.  So to help you out, I present to you my lucky 13 tips of things landlords need to know in order to stay out of trouble.

  1. When you have a tenant problem, whether it's refusal to allow you to enter the unit, prepare for bed bug treatment, noise, damage etc., do not wait and hope it gets better.  Don't write 10 letters saying the same thing.  It's like the brakes on your car;  when they start to squeak, they never get better without some action.  Give one warning, one letter, and then do the appropriate termination notice, likely an N5 which is remedial...if the tenant corrects the behaviour, the problem goes away.  By waiting, you are simply making the problem worse, the behaviour more entrenched, and letting other tenants be disturbed by the behaviour, opening yourself up to meritorious compensation claims from other tenants.

  2. When you think a tenant has moved out, and left only strangers behind, don't try to suck and blow.  It's a common reaction, so long as the new occupants pay rent, the landlord is happy.  Three months later, they stop paying rent, and start leaving feces in the hallway.  Then the landlord says "Harry, they are unauthorized occupants!  Evict them".  Well by that time, you can't.  They are your tenants.  So decide one way or the other.  If you want to keep them, sign a new lease with them.  If not, file an A2 application.  Read the LTB Interpretation Guideline #21.

  3. Don't send your paid paralegal or lawyer to the hearing for a rent application, without knowing that there are a number of issues, maintenance, conduct, insurance claims etc. going on behind the scenes.  It just delays the rent application, as the paralegal doesn't know the details of those other issues, and besides, you have no witnesses at the hearing to give evidence in regards to the other issues.  There is only one choice left, an adjournment, and that just lets the rent arrears mount further.

  4. Don't make funny side-deals with a tenant for payment after they have been to the LTB and you have a conditional payment order or standard remedial order.  If you have an order, and it's not followed, file the L4 on the first breach, (or with the Sheriff on a standard order) and be done with it.  If you start having "conversations", and then a month later you decide, "what the heck, it's time to evict", the tenant will certainly say that he had a conversation with you after the mediation at the Board, and you agreed to other things.  Rule number one of conditional payment orders.....you should never let the amount owed get higher as you listen to excuses and promises.

  5. Don't give superintendents too much authority.  Supers are great people, but they shouldn't be writing letters, making deals, operating autonomously etc.  That's why we have owners and property managers.  While you should stick up for your employees, too often willful blindness gets you in trouble.  When a tenant says to you that there are things missing from their unit, that they were sexually harassed, that the super tells people to f*** off, don't dismiss it out of hand.  They are acting as your agents.  You are responsible for their behaviour.  And by the way, use proper superintendent agreements, and include a "deemed rent" that you increase each year so that if they no longer are working for you and the LTB refuses to evict them, at least they are paying the market rent.

  6. Don't allow tenants to move in without first and last paid, and without proof of transfer of responsibility for utilities, if that is part of the agreement.  Have a properly written lease that only allows the tenant the right to occupy the unit, (and hence the tenancy to commence), once those obligations are satisfied.  Why not buy my package of tenancy documents.  Just $75.

  7. Talk to your valued independent contractors, and let them know that they are not to talk with tenants while they are doing work.  I've seen so many tenant applications against a landlord succeed because a contractor had loose lips...."oh, this fuse box is the oldest piece of junk I've ever seen", says the contractor, as the tenant writes down every word.  No conversations, no beer.  Do your damn work!

  8. Recognize that the Residential Tenancies Act applies despite any waiver or agreement to the contrary.  Creative agreements you make about rent or entry or maintenance that don't follow the law, have no force or effect.  For small landlords, it's up to you to shovel the walk and cut the grass.  For all landlords, don't expect your legal representative to be effective in getting an eviction for a tenant not letting you enter his unit, when you don't give proper notice to enter, including a proper window of time, perhaps 2 hours for your own people, 4 hours for an independent contractor.  These entry notices that say "between the hours of 9 and 5" are contrary to decisions from the Court.  Read the Landlord and Tenant Board Interpretation Guideline #19.

  9. Use N8 notices for persistent late rent along with N4 notices for arrears of rent.  They are highly effective, less prone to attracting relief from eviction, are about conduct, not rent (in the event your tenant assigns himself into bankruptcy, you can still evict) and it gives you a no-nonsense order instead of the merry-go-round of monthly LTB appearances.

  10. Don't give out parking spots without some care.  Understand that tenants don't have a right to parking.  It's a service and facility that you can add by agreement only.  Parking is available by agreement, either in the lease or at a later date.  But before you give a spot, make sure a parking agreement is signed, make sure that the monthly rate for parking is in the agreement (which becomes rent), make sure that they pay you an update to the Last Month's Rent Deposit equal to the new parking charge BEFORE THEY HAVE A RIGHT TO PARKING, and make sure that you have good rules in your lease or on the parking agreement about parking.

  11. Don't do your own conduct notices of termination, the N5's, N6's and N7's.  They are likely inadequate, if not downright defective.  Without dates, times, specifics, names, details etc., the Board will likely dismiss the application when it comes to a hearing. 

    And besides, there are not 25 people in the province who understand how voiding of an N5 notice works.  It is so easy to have an application based on an N5 dismissed.  In my opinion, there isn't even enough info in the Residential Tenancies Act to assist an adjudicator in interpreting N5 voiding provisions, primarily because there is a big difference between tenant breaches of omission, and tenant breaches of commission, as far as "correcting the behaviour" is concerned. 

  12. Learn how to pay interest on a last months rent deposit, and do it religiously.  If you raise the rent by the guideline each year, you simply take the interest that you would have otherwise paid the tenant, and apply it to the LMR, topping it up.  Your LMR is then always equal to the current rent, and you won't get tenants rightfully upset with you cause you tried to save $8.23. LTB Board Members are sometimes indignant when a landlord doesn't pay interest on the LMR.  I wish they were as indignant when the tenant didn't pay rent.
  13. Learn how to raise the rent, either with an N1 or N2 form, giving 90 days minimum notice on that form, with the increase effective on the 1st day of a rental period, and if the provincial guideline applies, then no more than the annual guideline.   

    If you get it wrong, don't raise the rent using a Board approved form, then ALL YOUR INCREASES FROM THE BEGINNING OF THE TENANCY ARE ILLEGAL, and you owe the tenant thousands of dollars.

1 comment:

Ian Wilkinson said...

Always right to the point Harry. Great article. A print for all my landlord's ... over the years I've seen every one of those issues. An ounce of prevention ...