Tips for Landlords
Tips for landlords is a new section for the Winnipeg Rental Network website. Articles posted here will focus on the ups and downs of property ownership, and strategies on how to succeed. If you have any comments or questions about these articles, please contact Winnipeg Rental Network at contact@winnipegrentnet.ca.
Articles
Pet Damage Deposits and Guide
Changes to the Residential Tenancies Act effective March 2013
New Resource Guide available regarding eviction prevention
Manitoba Hydro’s Landlord Express
Late Payment charges
Managing Rooming Houses in Winnipeg
Why you can’t ask tenants if they plan to have kids
The true value of repairs to your rental property
Pet Damage Deposits
This summer, the Residential Tenancy Branch (RTB) increased the amount that landlords can charge for a pet damage deposit. You can now charge new tenants a full month’s rent for the pet deposit. The RTB has also published a useful guide on renting to tenants with pets. Click here to find the guide.
By accepting tenants with pets, you can:
- increase demand for your property
Since not all rental properties on the market accept tenants with pets, yours will be in high demand. - attract more long-term tenants
It is hard to find rental properties that allow pets, so tenants with pets are likely to stay longer than tenants with no pets. This could reduce turnover in your building(s). - attract responsible tenants
Responsible pet owners often make the most responsible tenants. Because few rental properties allow pets, these tenants are less likely to do anything to put their tenancy at risk.
Changes to the Residential Tenancies Act effective March 2013
The Residential Tenancies Act has been amended and these changes will take effect in March 2013. These changes include: clarification of the rules for ending tenancies; obligations around new rent charges after a rehabilitation scheme; and written requirements from tenants regarding rent increase challenges. There are also changes to many of the forms that the Branch provides for landlords. For detail on these changes, click here.
New Resource Guide available regarding eviction prevention
Most evictions are due to non-payment of rent. Many households struggle to pay their bills and some finanical supports may be found in various programs. However, there are often deeper crises that result in the inability to pay rent on time. Connecting people to the right resources can help make avoid future problems. WRN has created a printable pamphlet that lists the various resources that are available to both renters and landlords.
Click here for a copy.
Manitoba Hydro’s Landlord Express
Landlord Express is a customized electronic application to help landlords and property managers manage rental properties. It is a free online service, available 24/7 from anywhere. It allows landlords and property managers to:
- register and manage electric and natural gas accounts for rental properties;
- report changes in responsibility for the natural gas and electric services.
With Landlord Express, you can:
- register your rental property on-line;
- view information, such as estimated Equal Payment Plan (EPP) amounts and disconnections;
- initiate move-in and move-out information;
- enter final and initial meter readings.
For the City of Winnipeg’s Water and Waste, Click Here.
Late Payment charges
(From the Residential Tenancies Branch) The Residential Tenancies recently made changes to how much can be charged for late payment of rent. A tenant is responsible to pay the landlord the full rent on the day the rent is due. If the rent is not paid on time, the landlord may charge the tenant a late payment fee.
Agreement. A landlord must tell a tenant in writing that they will charge a late payment fee if the tenant doesn’t pay rent on time. A landlord can include this information:
- on a tenancy agreement; or
- in the house rules (A written rule a landlord may have for tenants in addition to the obligations in a tenancy agreement. For example: A tenant may not have a pet in the rental unit.)
Once a tenant knows about the fee, a landlord is entitled to charge it.
Fee Structure. The rate for a late payment fee is set by regulation. A landlord cannot charge more than what has been set by regulation. A landlord may charge a late payment fee of:
- up to $10.00 for the day the rent was due; and
- up to $2.00 for each day after the due date that the rent is late in any consecutive number of rental payment periods, to a maximum of $100.00.
When a landlord charges a late payment fee, the tenant must pay the daily rate:
- up to and including the day they actually pay the rent in full; or
- the fee reaches the $100.00 maximum.
Collecting upon an Order. When a landlord claims a late payment fee on an Application for an Order of Possession or a Claim for Compensation, the Branch calculates the fee up to and including the date of the hearing, to a maximum of $100.00.
Collecting accumulated fees. A landlord may also claim accumulated late payment fees at the end of a tenancy if the claim is made in a timely manner. For example: At the start of a tenancy, a landlord tells a tenant in writing that they charge a late payment fee. The rent is due on the first of each month. During the one year agreement, the tenant pays their rent late four times – November 5, December 4, January 8 and February 3. At the end of the tenancy, the landlord may claim a total late payment fee of $72.00 ($18.00 for November, $16.00 for December, $24.00 for January and $14.00 for February).
The landlord may:
- deduct the accumulated late payment fee from the security deposit at the end of the tenancy with notice to the tenant; or
- include the accumulated late payment fee on a claim for compensation they file with the Branch.
A landlord can’t terminate a tenancy for non-payment of late payment fees only.
Managing Rooming Houses in Winnipeg
Who lives in rooming houses? Most of these tenants do not fit the stereotype. Yes, they are people with lower incomes – and they include seniors, students and those with disabilities, including psychiatric consumers/survivors. Some of them need extra legal protection. But most of them are single people who are in and out of the work force. Low wages, low social assistance rates and the rising cost of living make rooming houses their only alternative to homelessness or the shelter system. Sometimes they live there for a short time and they may move when their situation improves. Or, if they are treated fairly by their landlords and neighbours, they can be long-term community members. Single-residency units in legal, licenced rooming houses can be one way that these people find a place to call home in our neighbourhoods (Rupert Coalition).
Rooming Houses need to be licensed. Also, click here for a helpful guide for Rooming House owners, including a handout that can be provided to renters in Rooming Houses.
Having an on-site manager or superintendant is a “must have”. It helps ensure good maintenance of the building and can improve relationships inside the rooming house while reducing crime, property damage, and undesirable visitors.
Being knowledgeable about community resources to help tenants with mental health problems, addictions, health problems is a good practice. Knowing where to send people to get help can solve problems in the building. Check the help links on the WRN homepage for more information.
Why you can’t ask tenants if they plan to have kids
Mark Weisleder | Toronto Star
Most landlords get along with their tenants, but there is always the tenant from hell. He or she doesn’t pay the rent on time, wrecks the apartment and upsets the other people living there. In the end it cost thousands to evict them.
How can you avoid that outcome? The best way is to screen the tenant effectively in the first place. This means asking the right questions and knowing which ones you can ask
What you can ask for:
A common question involves whether a landlord can ask for a Social Insurance Number (SIN). The police say we shouldn’t give out our SIN number because thieves can use this information to obtain phony credit cards and ruin our credit rating. Yet it is not illegal for a landlord to ask for a SIN number.
With a SIN number, it is easier for a landlord to do a credit check as well as a check on the tenant’s rental history. That is why a landlord should ask for a SIN number, but must also recognize that he has a duty to safeguard the information.
You don’t have to provide a SIN number, but you will have to provide your full name, birth date, address and postal code. You may also be asked for banking information. This will enable most credit reporting agencies to conduct the same credit and tenant history checks as with the SIN.
What you can’t ask for:
Landlords must be aware of the Ontario Human Rights Code, which says that you cannot discriminate against anyone because of such things as race, sexual orientation, marital status, disability or receipt of public assistance. This means that you cannot refuse to rent to someone just because, for example, they are married, gay, or receiving public assistance.
As a result, you cannot ask the following questions:
- Are you married, single or divorced?
- What is your ethnic background?
- Do you plan to have more children?
- Will your family be visiting?
You are permitted to ask questions such as:
- How many people will be living with you and what are their names?
- Where do you work?
- May I see your references?
- What is your income?
- What kind of pets do you keep?
- Will you be conducting a home based business?
- May I do a credit check on you?
In one 2003 case, Mary Cunanan tried to rent an apartment at 30 Godstone Rd. in Toronto from Boolean Developments. She was a single mother with three sons, aged 19, 16 and 14. They wanted to move to a larger apartment but there wasn’t one in the building where they lived. She found a three- bedroom unit on Godstone that was $100 cheaper than her old apartment. She applied and was asked on the form for the names and ages of all of her children.
When she later visited the building, she was told by the superintendent that her application would probably be denied because she had three teenaged boys and the landlord had experienced problems with teenaged boys in the past.
She was later told by the property manager that her application had been misplaced and she was not given the opportunity to re-submit. The landlord later claimed she was very argumentative and that he felt she would be a troublemaker. He said this is why he did not permit her to submit another application. As a result, she applied to the Human Rights Tribunal, claiming that she was discriminated against because of her “family status.”
During the hearing, the property manager admitted he preferred parents with younger children. He would typically rent a three bedroom unit to a couple with two children. He also stated that the building had suffered damages as a result of teenaged vandalism. The Tribunal found that although the landlord did not intentionally discriminate against Mrs. Cunanan, it still violated the Human Rights Code by discriminating against her because of her family status. The landlord was ordered to pay Mrs.Cunanan $4,000 and to stop refusing rentals for the reason only that the tenant had teenaged children.
Landlords need to be properly prepared before asking any questions to qualify a potential tenant, to make sure that you not only find the right tenant, but that you do not break any laws while doing so.
Mark Weisleder is a lawyer, author and speaker to the real estate industry.
This article was found in the Toronto Star.
The True Value of Repairs To Your Rental Property
“I’ve had it!!! These tenants are destroying my property. Why should I put another penny into fixing it up???”
As a landlord, we have uttered these words many, many times. Picture this lovely scenario: You haven’t heard from your tenant and their rent is 2 weeks late. You drive up to your rental property to collect rent and see a broken window in the porch. The front door is wide open and hanging on its hinges! You stomp up the front steps intending on giving your tenant a piece of your mind and stop, dumbfounded. Other than an old couch and lots of garbage, they appear to have vacated your house! You’ve just been a victim of the “midnight run.”
There are holes in the walls, 3 bedroom doors have fist holes in them, and the dining room walls have been used as a coloring board. The carpets don’t look like they’ve been vacuumed since you put these tenants in last year.
As you sit in your car contemplating the lost rent and wondering how you are going to make this month’s mortgage payment you say to yourself “what’s the point of fixing this place up? It’s only going to get destroyed again! It’s going to cost at least $1500 to fix this place up and that’s 2 months of my precious cashflow!”
Careful… you are now at the proverbial fork in the road – which way do you go? A left turn takes you back to the naive landlord that put every drop of blood, sweat and tears into making this cute property the best rental on the block! A right turn, however, is a downward spiral into slumlordville.
Let’s examine what happens if you take the right turn in that road… You clean up the garbage, put a For Rent sign in the window, and start showing your property. It doesn’t show well with the holes in the walls, but at least you didn’t have to fix everything, right? Tenant after potential tenant pass through your house but your rental application pile is empty… You are finally able to rent it out, but the tenants seem a little “iffy” and their friends make you nervous… but at least it’s rented, right?
Fast forward three months… it’s like Deja vu all over again! You walk up to the house to find out why your tenant’s phone is out of order and to demand payment for the late rent, and (insert expletive here)… your tenants have pulled another midnight run. The damage is a little worse now. There are a few kitchen cupboards that are missing, and the basement door is scratched up from the dog (Dog? I didn’t tell them they could have a dog???).
So, you call a hauling company to clean out the place (because all of their broken furniture is still in the house) and put that For Rent sign back in the window. An entire month goes by, and no applications! Desperate times call for desperate measures… So you lower the rent by $100. Someone will take it, right? And yes, you finally rent it out. To an even worse tenant… are you getting the picture? A few more cycles like this and it is so run down the homeless guy on the corner refuses to live there for free! Decision time again…
Let’s recap what you have after a year: A property that needs a $25,000 renovation and has actually decreased in value in a hot market! Should we bother to run the Profit and Loss statement?
Your goal should be to establish a minimum standard for the upkeep of your property. This could mean installing the most cost effective flooring, putting a new coat of paint on the walls, and above all, making sure all of the standard Neighborhood Livability Bylaws are followed. If done carefully, this does not cost too much. In the scenario above, you were contemplating a $1500 repair bill. Now you are facing a $25,000 renovation twelve months later! If you could turn back the clock, which choice would you have made?
The $1,500 repair bill seems like a “no-brainer” but what happens if the tenants damage the property again? They could, but you are minimizing the risk of that happening. Here’s why: You do a quick cleanup, repair the doors, put a fresh coat of paint on the walls, and take advantage of the carpet sale at your local flooring store. One week later you advertise the property again, but are able to charge $100 more than you were getting. And you now have a pile of rental applications. Somewhere in that pile is a responsible family that would love to be chosen to live in your house. Could your new tenants damage the property again? It’s possible, but because you are now choosing from a more responsible pool of tenants, you are minimizing your risk.
You made a mistake before and it cost you $1,500 but twelve months later you have a property that is once again running smoothly, creating positive cashflow and (wow!) worth more than it was a year ago. As frustrating as it can be, owning a rental property is one of the most rewarding and best ways to create stable wealth. Be a responsible landlord, and in the long run it will pay off.
Garret Wong has been successfully investing in real estate since 1997 and is one of the directors of GaraMark Property Management Inc., a property management company specializing in management of single/multifamily homes, condos and apartments in Winnipeg.
