Toronto Income Property Newsletter: June 2015
The Toronto real estate market continues to be a challenge for buyers, despite several downtown properties not attracting multiple offers this past month. Slowly but surely a lot of the increased demand is being sated. The market typically slows a little going into June, July and August before heating back up after Labour Day. Income properties remain in high demand as always, particularly those in the best neighbourhoods and those with the highest rents.
I’d like to wish all the dads out there a Happy Father’s Day, and hope that all of you are enjoying the warm weather.
How to Keep Your Rental Property in Tip-Top Shape & Your Tenants Happy
Being a landlord is often quite a fun and rewarding experience. Many figure that you just buy a rental property and then simply rent it out. If only it were that simple. Here are several guidelines, while they may seem just like common sense, will ensure that your income property will be in the best shape that it can be.
Keeping the property in a good state of repair: You must repair and maintain your income property and obey local health, safety and maintenance standards. Your suites have to conform to fire codes. You are responsible for repairs even if the tenant knew about problems before agreeing to rent the home. If something is broken, fix it! Tenants may be responsible for any damage that they or their guests cause. This is often part of your agreement with your insurance provider.
Maintaining common areas: You are responsible for cleaning and maintaining the common or shared areas of the building, such as hallways and yards. You are also responsible for removing snow from driveways, walkways, etc. Quite often an arrangement may be made with the tenant for them to look after this, but you have to make sure that this is addressed.
Providing access to vital services: You must provide access to hot and cold water, electricity, heat and fuel (e.g. natural gas). You cannot shut-off these services, even if the tenant has not paid rent. You may shut-off these services temporarily only to make repairs. You and your tenant can agree that they will pay for these utilities directly. You must provide heat in the rental unit from September 1 – June 15. During this period, the minimum temperature is 20C. Some cities and towns set additional requirements. You can check with your local government to find out more about minimum heat standards in your community.
Keep all your paperwork in order: You must provide your tenant with a copy of the lease or tenancy agreement, and written notice of your legal name and address. If the tenant requests rent receipts, you must provide them. You cannot charge a fee for any of these documents.
It is important to use good judgement when interviewing prospective tenants. Picking the right tenant can save a long, costly eviction process further down the line. Be thorough in conducting background checks and reference-gathering, including bank statements for the past three months, previous landlord references to check the tenant paid rent on time and credit checks incorporating fraud indicators and employer references.
Check identity and proof of current address – ideally tax or insurance documents – and talk at length to a prospective tenant. Spend time with them during the application process. It is important to strike a good relationship with them from the beginning.
Remember that good landlords make good tenants. Do not be derelict in you duties and where possible try to do a little extra. Treat your tenants with respect and your experience as a landlord will be a great one.
Can you charge your tenants for hydro without separate meters?
If you only have one hydro meter coming into your income property you can still charge your tenant an additional sum for hydro and gas each month. You may apportion each suite a share of the overall utility costs based on the overall square footage they occupy within the building. When you have separate meters, hydro can bill your tenants directly. Here is the relevant section of the Residential Tenancies Act which addresses this. 138. (1) A landlord of a building containing not more than six rental units who supplies a utility to each of the rental units in the building may, with the written consent of the tenant, charge the tenant a portion of the cost of the utility in accordance with the prescribed rules if,
(a) the landlord provides adequate notice to the tenant in accordance with the prescribed rules; and
(b) the rent for the rental unit is reduced in accordance with the prescribed rules. 2010, c. 8, s. 39 (1). (2) If a landlord charges a tenant a portion of the cost of a utility in accordance with subsection (1), the utility shall not be considered a service that falls within the definition of “rent” in subsection 2 (1). 2010, c. 8, s. 39 (1).
Proud Supporter of The Plex Realty Rockets
Undefeated thus far, tying their first game and winning the next two!