Being a landlord can be an attractive investment, but it can also be a lot of work. With the role comes a lot of responsibilities and potential risks, which can vary from province to province across Canada. It’s important to do your research and know your rights before delving into the venture. In Ontario, landlords should be knowledgeable with the Residential Tenancies Act, which outlines lease agreements, landlords and tenants responsibilities, and other rights, rules and responsibilities relating to rental properties. Some of the responsibilities include providing a rental unit that complies with health, safety, housing and maintenance standards as well as keeping the home in good repair and providing access to vital services like hot and cold water, electricity, heat and fuel (e.g. natural gas). Taking ownership and pride in your investment will only help you reap the rewards and attract the right tenants. You must also provide your tenant with an information package outlining the basic rights and responsibilities.
Before becoming a landlord, you should also check to make sure your unit is legal. Some municipalities don’t issue permits for secondary suites like, for instance, basement apartments. If you build one anyhow and it is discovered, you could be forced to pay fines and take down the rental property. If you want to rent out a space that doesn’t meet the legal requirements, you will not have the same protections that a legally rented suite will have. If you want to rent out a space that does not meet safety code restrictions, do your renovations before renting to save yourself the potential liability nightmare.
Finding the right tenant
It’s no secret every landlord wants someone who will pay the rent on time and respect the rental property and a good way to achieve this is to create a screening process that will allow you to weed out the bad apples that may have a history of not paying the bills. A rental application is often used to ensure the same information is collected from all prospective tenants. It allows landlords to make direct comparisons between applications and also verify the information that was given to them.
Landlords have the right to use income information, credit checks, credit references, rental history, employment history, personal references and other similar business practices to help them make their decision on which tenant would be best suited for the rental property. They cannot however, select or refuse tenants based on race, place of origin, ethnic origin, religion, sex, age, sexual orientation, marital status, family status (e.g. children) or disability. Familiarizing yourself with the Ontario Human Rights Code to learn about your own rights and that of a prospective tenant when it comes to choosing the right person to rent to will go a long way in helping you become a successful landlord.
Sealing the deal
Although landlords and tenants don’t necessarily need to have a written tenancy agreement or lease (a verbal agreement could be made), it’s in the best interest of both the landlord and tenant if there is one because it will act as a record should there be any kind of dispute later on that needs to be settled. You can also collect a rent deposit that is no more than one month’s rent. It must be requested on or before the day the tenant moves in and is solely used for last month’s rent before the lease ends.
Landlords also have the right to collect rent in full on the day it is due and increase the rent once during a 12-month period. If you need to complete maintenance or repairs or show the unit to a potential tenant you must let your tenant know 24 hours before you enter and send a note as to why you want to enter. It must also be between the hours of 8 a.m. and 8 p.m. If there is an emergency however, you can enter the unit without necessarily needing permission (but it’s always a good idea to let the tenant know as soon as possible for good relations).
One of the most difficult parts about being a landlord is exercising your right to evict a tenant. It’s never easy, but it’s sometimes necessary, especially if you have a tenant who isn’t paying their bills or has damaged your property. In most situations you have to issue a termination notice before taking other measures to get the tenant out of your rental suite. If you want to rent your unit to another person (or even a relative) or have decided to use the unit yourself, you need to give the tenant a notice of termination outlining the reason why. If you have a problem tenant however, the process can take a little longer. The termination notice you issue must state the number of days the tenant has to correct the perceived problem. You must then wait the set number of days to see if the issue has been resolved. If it hasn’t you can file an application with the Landlord and Tenant Board, which is responsible for settling landlord and tenant problems. A hearing will be held for the application where a member of the Board will make a decision based on the evidence presented by the landlord and tenant. Landlords and tenants also have the option of having a mediator from the Board step in to help them reach their own agreement.
If a tenant refused to move out even with an eviction order issued, you can contact the Court Enforcement Office to carry out the eviction.
Things to consider
As a tenant, it might seem like landlords have an easy job, but there is a lot more to being a good landlord than collecting cheques every month. Not every property owner makes money on their rental apartments. Even with a good location and properly vetted tenants, many landlords have gaps between tenants, which makes making money difficult. If you are thinking of buying an investment property, make sure you can afford to carry it even if you aren’t able to keep the unit full at all times. Remember, appliances, decks, and roofs need servicing and replacing every so often. If you aren’t able to make fixes on the fly, consider hiring a property manager or keeping a trusted handy man (or woman) on speed dial. Issues with maintenance and long lags between a complaint and a fix can easily drive away the tenants you took so long to vet.