Thursday, November 4, 2010

Some interesting tips for Landlords

I attended a seminar yesterday entitled "A Landlord's Rights & Obligations in Ontario"

The Residential Tenancies Act (RTA), 2006 is what governs Landlord/Tenant relations.

- 80% of rental units owned by Landlords in Ontario are by "small investors" with less than 6 units
- 32% of people in Ontario are renters (1.35 million renters)
- 2% of the tenants in Ontario are considered "professional tenants" who seek to profit off unsuspecting landlords (27,000 tenants)

Tenants are provided free representation under the RTA, Landlords are expected to have "higher level of understanding".

You cannot have more than one month's rent in your possession.  If you rent to a tenant, you get their last month's rent, ask for a certified cheque on the day you provide the keys.

NOT COVERED under RTA - Living units in which the roomer/boarder does share kitchen/bathroom facilities with the owner/landlord (includes the landlord's spouse, child or parent)

A rental complex or building of which no part was rented for residential purposes before November 1, 1991 is not subject to rental controls under section 6 of the RTA.

Landlords must provide to each tenant with an information pamphlet on the responsibilities of Landlords and Tenants.  It is advisable to get the tenant to sign an acknowledgement of receipt of this document. 

There are NO rental increases allowed to be carried forward.  For 2011, the rental increase is 0.7%, if you do not increase the rent by this factor, it is lost, there is no carry forward.

Landlords cannot demand 12 postdated cheques.

When giving notice, if you send through mail, the accepted timing is it will take 5 days for notice to arrive, 3 days if done by courier.

Landlords can increase the rental deposit each year by the allowable rental increase.

Each year, landlords must pay the tenant the interest on their last month's deposit.  Interest is calculated by using the number for the Consumer Price Index.  If you do not pay annually, it is compounded interest, not simple.

Landlords must provide their full legal name and address to the tenant within 21 days of their taking occupancy.  If you do not want the tenant to have your home address, you can provide your lawyer's office as an address. 

All paperwork signed by tenant must be provided to them, including the rental application form.

1 - not harrass the landlord
2 - pay the rent
3 - pay for any repairs for any damage they have done
4 - cannot change locks without giving landlord a key

On a rental application, make sure you verify all details, do not use their information, get the information direct from the source. 

Previous landlords, not current landlords are the best source of information.  In an independant survey, 80% of landlords in the Middlesex county, said they would give an dishonest reference for a current bad tenant.  Get minimum 3 years and preferrably 5 year tenancy history.

Check their drivers license to verify their information.  People can use aliases and give nicknames, not proper legal names.

On student rentals, get parental guarantees.

Under RTA, landlords can give upto 3 month's rental discount per year, without dropping the rent.  That allows the annual increase on the actual rent, not a lower rent.

You cannot charge late fees, but you can give 2% prompt payment discount.

If tenants are not paying rent, you can refer them to the "rent bank" (Minstry of Community and Social Services).  They can also help tenants with utility loans, rather than the landlord taking over the service.

Properties have to be kept at 21.1 degrees

For common information and forms -

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