What is stage two of a tenancy?
Previously we have mentioned that every tenancy has three stages. Stage one is the process of selecting a tenant, stage three is the ending of the tenancy. Stage two is the part in the middle, it’s managing the tenants while they occupy the property. Many landlords find tenants and when they pay rent on time are satisfied they have a successful tenancy. They fail to manage the property during the tenancy.
Every tenancy agreement has multiple different clauses, payment of the rent is only one portion of the tenancy agreement. Section 47(1) of the Residential Tenancy Act outlines reasons a Landlord can terminate a tenancy for cause. There are 12 different examples listed. Failing to pay a security or pet deposit and rent or only two of the twelve reasons listed.
Some of the other reasons for termination include the tenant has failed to comply with a material term of the tenancy, there are an unreasonable number of people residing at the property, the tenant has caused damage to the property and a tenant has sublet the property to another party without the permission of the landlord. The tenant is doing something illegal. All of these items are undetectable by receiving the rent.
In our experiences we have come across the people living in the property not who are on the tenancy due to a relationship breakdown, job loss or other circumstances. Often tenants obtain pets after they occupy a rental unit. This is a material term of the agreement if pets aren’t permitted. Tenants often fail to report potential damage to the property fearing they may be responsible for the issue. There are times when a tenant is responsible for damage, and there are times when a landlord is responsible for the maintenance of the property.
How can a landlord manage stage two of the tenancy?. The Residential Tenancy Act allows Landlords to access their rental properties at least once per month, with proper notice to inspect the unit. In some cases this frequency may be needed, in most cases a minimum of two per year (every six months) is a good inspection time frame. Some homeowner insurance providers require rental properties be inspected every three months. As a landlord it is important to ask your provider what their requirements are.
Cartref Properties performs two inspections within a twelve month period for all the properties we manage. We are clear in our intentions to the tenant in that we inspect the property to ensure they are adhering to the tenancy agreement including the above mentioned reasons for termination. Performing inspections is also a great opportunity for landlords to save cost on repairs. Being proactive in repairing an item is less costly than waiting for the item to fail completely. Completing a minor repair to prevent a major issue can save significant cost in the long run.
Cartref Properties goal for our clients is to have a positive tenancy with their rental property. Managing stage two with cooperation from the tenants and landlords creates a more positive tenancy, encourages engagement from the tenants, and improves the tenancy experience for all parties. During stage one, Cartref Properties is clear to applicants about how we will manage stage two and the requirement for inspections. We find this eliminates negative experiences in tenancies as the quality of applicants increases.
If you need assistance managing your rental property, Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Location, Location, Location…How the Pandemic is changing the rental market
Before the Pandemic the term Location, Location, Location in real estate was used to describe the best area. This was similar in the rental market, the location and proximity to the city centre, transit, schools, and or other amenities were important factors. Within the greater Vancouver area, being closer to downtown generally increased the price of rent mostly due to employment requirements. As you moved further away from the city centre the prices reduced, there were always areas or neighbourhoods not in the heart of the City that were attractive for different reasons. Kitsilano, South Granville and Kerrisdale are a few areas in Vancouver that were always attractive. Moving to the suburbs of Burnaby, Coquitlam or Langley generally decreased the rental rate significantly.
Along came the Pandemic and it is redefining the meaning of Location, Location, Location. Many larger urban areas don’t have large housing spaces due to the cost of construction. Many condo buildings in downtown Vancouver consist mainly of one bedroom units with fewer two or three bedrooms. When the pandemic hit and people were asked to work from home they realised they didn’t have a functional space to live and work in the same location. This created a number of people residing in one bedroom units to seek out larger spaces of two bedrooms or larger. At the start of the pandemic in the downtown area we found many people who were residing in a one bedroom looking at two bedroom units. We also experienced people who lived in the urban area looking to move to the suburbs for larger space at a comparable price.
What we have noticed in the past year of the pandemic is that comparable prices need to reflect a wider geographic area due to the lack of requirement for a tenant to be close to a certain area for employment needs. Prior to the pandemic an individual may have lived downtown Vancouver for employment reasons, now is moving to Coquitlam, Richmond or Langley, and can afford or is willing to pay the Vancouver rent. Now when we look at comparables for Coquitlam we need to consider all the local areas due to tenant work flexibility. Being near the transit may not be as important anymore as they are not commuting regularly. They are now making choices based on what is the best unit for their needs and what area is the best location for their own lifestyle.
If employers allow work from home to continue permanently, then Location, Location location, isn’t going to have the same meaning it had prior to the pandemic. The pandemic, and today’s technology which allows people to work remotely has changed forever our idea of what housing looks like.
If you need assistance managing your rental property, Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Is the move- in fee reasonable?
There are many costs Landlords incur when renting their property. The Residential Tenancy Regulations outline prohibited fees, refundable fees and non-refundable fees owners and tenants may encounter.
Section five of the Regulations identifies prohibited fees which include guest fees, replacement of keys or devices if the landlord changes the keys. Section 6 identifies refundable fees which include keys or devices which are not the sole access to the property and can only be the direct cost of replacement. Section 7 identifies non-refundable fees permitted, which include direct costs for replacing keys, or additional keys, service fee charges for returned payments, and move in or move out fees.
Item(e) Move in or Move out Fees charged by Strata Corporations are fee’s Landlords are permitted to charge tenants when renting property in a Strata Corporation. All Strata Corporations have a move in and out process outlined in their bylaws or rules. The bylaw or rule will identify a fee which is charged to owners/tenants when a move in or out occurs. Some Strata Corporations may only have a move-in fee and no move out fee.
Landlords should be familiar with the bylaw or rule which identifies the amount of the move- in fee and communicate this to potential tenants when applying as a cost tenants will be required to pay. Landlords can collect the fee from the tenants and pay the strata directly or have tenants pay the Strata Corporation directly themselves.
What many owners and tenants are not familiar with, are the fees “reasonable”. Section 6.9 of the Strata Property Regulations identifies that strata corporations may have fees for use of common property, but that fees must be reasonable. If you rent a unfurnished property the CRT has identified in multiple cases that the industry standard is showing fees in the range of $50 to $200 and finding this to be reasonable. If you rent a furnished property, is the $200 fee reasonable. The CRT again has ruled in multiple cases that a bylaw needs to be clear on what a move entails and that the fee must be reasonable. The Watson case is the standard reference as to what is “reasonable”. In that case it was determined the $100 move in fee for a roommate not moving any furniture in was excessive and the fee was reduced to $25, as the strata could not identify what actions it took to prove the cost of $100. Many strata corporations will even try to apply the move-in fee for a single piece of furniture being delivered. CRT rulings have determined this alos does not constitute a move, and therefore a move in fee should not apply.
Check your bylaws and see what your move in and out fees are before renting your property.
If you need assistance managing your rental property, Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Speculation Tax Declaration
In British Columbia each year owners of property in BC are required to declare for the Speculation and Vacancy Tax. Each owner of the property is required to declare what their status with the property is. Are they residing in the property as their primary residence, renting the property, or is the property vacant.
As an owner of a rental property you are exempt from paying the tax if the property is rented. When making your declaration you need to indicate the property is occupied by a renter. There may be a requirement to supply proof of the tenancy. The declaration is required to be made by the end of March each year. The BC Government mails the declaration document to each owner starting in January of each year. If you are not sure if you have received the declaration documents you can contact the speculation tax department and they will advise you where they are mailing the documents. If you reside in the property you would receive them at the property. When you are the owner of an investment property you want to ensure the documents are being sent to an address you will receive them at. This is very important for non resident owners. You may need to change the mailing address at Land Title and BC Assessment to ensure the documents are being sent to the correct location for you.
Failing to declare may result in the government assessing the property and applying the speculation tax. Each month the tax is not paid, the government will apply interest to your account. If you fail to declare at the appropriate time, the government does allow for a declaration to be made at a later date. There is a time limit of three years after the year ending for which the declaration is required to be made, for which you can make a declaration. If a declaration is not made by this point the government won’t accept a declaration.
It is important to know the requirements of the taxes you are required to pay on your investment properties. We suggest you obtain professional tax advice regarding your investment.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Ten Day Notice
What happens when tenants fail to pay rent or utilities?.
Cartref Properties will contact the tenant and discuss the non-payment, explaining their payment has been declined and politely request they re-submit payment. In order to protect the owner’s interest with regards to the tenancy, we will issue a ten day notice to the tenants. A ten day notice provides tenants five days to make payment of the rent, failure to do so requires they vacate the property after the ten days. There are additional days for service as outlined in the Residential Tenancy Act depending on the form the notice is served.
Cartref Properties sends notices by email and registered mail. In order to send it by email you must have the tenants permission to use that email for service of official documents. Sending by email adds three days to the five days of notice. Cartref Properties officially sends the notice by registered mail which adds five days to the notice period for delivery and it provides a tracking number for confirmation of delivery.
When a tenant pays within five days, the notice ceases to exist and the tenancy continues. When the tenant fails to pay within five days an owner can choose to accept the funds reinstating the tenancy, or continue with the eviction of the tenants. Our experience shows us it is very uncommon for a tenant to vacate after ten days. In this case, an application to the Residential Tenancy Branch would be required to request an order of possession. After an order of possession is obtained we would move forward with the eviction process to vacate the tenants. Vacating a tenant may require the involvement of a bailiff. Bailiffs are the only people in BC who can make a person physically vacate a property.
The entire process of non payment of the rent and or eviction can be long and time consuming for both parties.
Looking for Property Management you can find more information about us at: www.cartrefproperties.com