Red Flags

Happy New Year 
As we start a new year we will review the beginning of the rental management process and identify a few red flags we see from potential applicants. The tenant selection process is the beginning of, and probably the most important part of the process in rental property management. 

There are many aspects of the tenant selection process, and it is important to pay attention to what we call “red flags” and they are often hard to see. The process starts with the initial contact from a tenant who inquires about your property. 

The first step is to pre-screen the inquiry to ensure they are a possible fit for your property. At this point you’re inquiring if th are a potential fit for the property. Asking how many people would live there is a good question. If you have a two bedroom and they want eight people to live there you have the right to say no to that situation. A person does not have a right to rent your property simply because they have contacted you or applied for the property. 

Make notes of what they tell you about themselves. If possible, inquire what they do for work and if they have pets.  During the viewing ask the same questions again in a different format. If they provide a different answer than during the pre screening this is a red flag, which indicates they may not be forthcoming with the facts about the situation.  

When multiple people are planning on living together it is best if they all attend the viewing, as this gives you the opportunity to meet each party. When one party is unable to attend it is acceptable to inquire why they are unavailable. A party not attending could be a red flag that the individual will not actually reside at the property.  

When communicating with potential applicants how they respond can give insight to the person they are. Schedule an appointment for the viewing. Give them specific instructions for confirming the appointment by communicating with you before the viewing time. Failing to confirm the appointment shows disrespect for your time and is a red flag to how they respect others. If they lack respect for others they may lack respect for your property.  

When asking questions, listen carefully for the reply, are they trying to give a response you want to hear or is it natural answering the questions. People who are telling the truth are more natural in their replies. While people trying to hide something often brush off the answer, avoid the subject and try to change the direction of the conversation. This is a red flag if you are trying to ascertain a specific answer and having difficulty obtaining a response to a simple question. This is why we don’t like open houses for rental properties, we ask questions during the viewing process, which is more difficult with multiple parties in the property. 

How long do they look at the property?. If a person or people attend a viewing and are in and out in five minutes without asking very many questions, this is a red flag they may not be looking for themselves.  A person looking to live at a property will take the time to look at all parts of the property, ask questions of something that catches their eye that is of concern to them. 

People looking to move in fast are also a red flag. When a party is looking and says they can move in now why are they available? There may be legitimate reasons and it could be they have had a hard time finding another place, due to who they are.   

These are a few of the red flags we watch out for when renting properties. 

Renting your property can be confusing. Cartref Properties can assist you, call today to discuss your needs or find more information about us at: www.cartrefproperties.com

Stage Two of a Tenancy

Renting your property involves many different tasks and processes. In a previous post we mentioned renting has three stages to the process. Today we will discuss stage two of renting your property.

Stage one of renting was the placement of your tenant. Stage two is managing the tenancy while the tenant occupies your property. Many Landlords neglect stage two especially when a tenant is regularly paying the rent. Tenancies can become a negative experience if not managed throughout the tenancy. 

A tenancy agreement has many different clauses, payment of rent is only one of the terms of the agreement. Tenancy agreements will have clauses identifying who the occupants are, how many people may reside at the property, if pets are allowed, if smoking is permitted and a requirement for tenants to report maintenance issues to the Landlord. Verifying these clauses is difficult unless a landlord visits the property to verify the tenant is adhering to the tenancy agreement.  

Landlords should visit and inspect the property on a regular basis, Cartref Properties recommends twice a year. Being a proactive Landlord provides tenants opportunities to communicate issues to Landlords. Open two way communication creates a better experience for both Landlords and tenants. Tenants may not report a maintenance issue which is an easy fix as it isn’t bothering them, when left unattended becomes a major concern. Inspections provide Landlords opportunities to attend to minor maintenance repairs reducing costs. Performing routine inspections improves the positive experience of a tenancy. Tenants may be in violation of a term of the agreement which would allow Landlords to seek termination of a tenancy or correct the action through a hearing with the residential tenancy branch. Informing applicants that inspections will be performed during the tenancy often turns away applicants who would have been a negative experience. 

Managing a rental property doesn’t stop when a tenant is paying the rent, it moves to a different stage.

Looking for Property Management you can find more information about us at: www.cartrefproperties.com 

Do tenants prefer to rent from owners directly or a property manager?

I was speaking with a landlord recently about helping them with their rental property. During the discussion they indicated their experience was that tenants preferred to rent from owners and not a property manager. I found this to be interesting. I have heard many landlords complain about “professional tenants”, a term landlords use to describe tenants who manipulate the system and take advantage of landlords because they know the system and how to work around it. My response to the landlord was that my experience is that tenants prefer dealing with owners because they can take advantage of owners who aren’t familiar with the tenancy laws. 

As a property manager I have never dealt with a “professional  tenant”. When a Landlord lacks the knowledge of managing a rental in BC they often find themselves in a difficult situation when they haven’t followed the law. By the time the owner finds out they are dealing with a professional tenant they are on the road to a negative situation. 

Managing a rental requires a significant amount of knowledge. When a tenant knows and understands that the owner is unfamiliar with the tenancy laws they become easy targets to take advantage of. After the tenant occupies your property it is difficult to remove them. Many landlords complain this is the fault of the tenancy branch. The RTB is mandated to not make a person homeless without a valid reason. They also expect the landlords, which includes self managing owners, to be more familiar with tenancy laws than tenants. Interpreted this means landlords are held to a higher standard during the RTB hearings. When a landlord fails to follow the law the RTB will often make a decision which doesn’t include eviction of the tenant from your rental property.   

A property manager should have greater knowledge and understanding of the tenancy laws than the individual owner which will help reduce and or prevent the professional tenants from occupying your rental properties. 

Renting your property can be confusing. Cartref Properties can assist you, call today to discuss your needs or find more information about us at: www.cartrefproperties.com

How can your strata better manage rentals in your building?

With the removal of the rental restrictions in all strata corporations in BC, many strata corporations are worried this is going to lead to an influx of issues at their property. Here are a few things that strata corporations can do to improve the situations regarding rental in their building. 

The first thing is to improve communication between the strata corporation and the  landlord, landlord’s agent and tenant. Quality communication in any relationship is important and will improve outcomes. Today’s almost all strata management companies use online communication tools to connect to the ownership of the property. These tools are used for communicating many different issues at the building from distributing meeting minutes, to notices regarding work being completed at the property. Work can be the annual fire testing which if the unit is tenanted the tenant must provide access for. If a notice for the fire testing is distributed electronically to the landlord and they have to forward or pass that on to the rental manager who then forwards it to the tenant, the communication is naturally delayed in comparison to when an owner receives the same information. This causes a delay in the response and or lack of cooperation due to the timely nature the information is received.  

The second thing strata corporations need to improve is their understanding of the enforcement of bylaws when the unit is tenanted. All strata corporations should review with their management company the process they follow when dealing with a complaint of a tenanted unit. The CRT has heard multiple cases where the application of fines hasn’t followed the correct process of providing a tenant the opportunity to respond in a timely manner and in these cases the fines have been overturned. When a unit is tenanted the renter has the same right to reply to a complaint as an owner, and in the same time frame. If the management company is not sending tenants directly a copy of a bylaw notice and is expecting the owner to forward it to their tenant, which fails to allow a tenant to respond to a bylaw notice, you are not meeting the requirements in section 135 of the SPA. Many cases have been brought to the CRT and the fines are being thrown out due to lack of proper procedure when a bylaw letter is not sent to the tenants directly.    

The biggest change can be with attitude. Most tenants are good people and all people want to be treated with respect. If strata corporations stop treating renters like they are outcasts and don’t belong, the experience for owners and renters will be a positive one. The old adage of don’t let a few bad apples spoil it for everyone applies here.  

Cartref Properties manages multiple properties in the lower mainland and they are managed by many different strata management companies all of whom use electronic communication to the owners. At this time of the over ten strata management companies we deal with only two allow Cartref Properties to receive communication as the landlord’s agent and the tenant to receive the communication about the building electronically. Two other companies allow the rental agent to receive the communication but not the tenant.   

The challenge we are putting to strata management companies is, it’s time to improve your communication skills to all parties involved with the strata lot. A more informed tenant and landlord’s agent will improve many issues owners complain about.   

Renting your property can be confusing. Cartref Properties can assist you, call today to discuss your needs or find more information about us at: www.cartrefproperties.com

Should you use the strata management company of your building to manage your rental property?.

If you own an investment property in a strata corporation and are looking for a rental management company there are many things you should consider.  

One of the most overlooked aspects of hiring a rental property manager is, are they fully invested in managing your property. A rental property manager will help a landlord with multiple aspects including finding a tenant, managing tenant relations during the tenancy and completing the move out process. 

BC has regulations in place identifying who can manage your property. If you are the owner of the property you are able to manage it yourself. When you hire a third party they must be licensed by the governing body which in BC is the BCFSA. Why do third parties need to be licensed, to protect landlords from being misrepresented in the rental property management process. Licensed individuals have training on the laws, regulations and processes governing rental properties in BC. 

There are three licensing groups in BCFSA for Real Estate Professionals, Trading, Strata Management and Rental Management. A person with a trading licence assists you in selling your property, they can also help tenants find a rental property. Strata Managers are licensed to manage Strata Corporations, which is the entire building, and can be residential or commercial properties. 

Rental Managers are licensed to manage rental properties, which can include residential, or commercial. Residential properties include Apartment buildings, individual houses and strata lots inside Strata Corporations. Strata lots include commercial properties, condos, townhouses and can include single family homes in a Strata Corporation. What is often misunderstood is rental managers are not licensed to assist tenants find a property to rent as they represent the landlords not tenants. 

An individual and a brokerage may obtain all three licence categories if they choose and provide Trading, Strata and Renal Management to their clients.  

BCFSA describes various types of conflicts of interest when dealing with multiple types of licence categories if interacting with one client. In recent years BCFSA removed the ability of Trading agents to represent the buyer and the seller in a sales transaction, this is called dual agency. This was implemented to ensure each party's interests are being fairly represented.  

In property management there are no limitations at this time for a strata property management company and rental unit in that strata be managed by different parties. 

BCFSA identifies areas of potential conflicts of interest for all licensees when they are licensed in another category. 

Here is BCFSA explanation on a licensee's responsibility regarding conflicts of interest.

“As a licensee, you have an overriding duty to avoid conflict of interest, which can be achieved in many cases through proactive planning. However, where a conflict cannot be avoided despite your best efforts to do so, you must promptly and fully disclose the conflict to your client so that they can make an informed decision on how to proceed.”  

The first conflict we will identify is between Rental Managers and Trading (Sales) agents. 

“Providing additional categories of real estate services (e.g. trading services), such as where you may have an interest in receiving a commission from the sale of a rental property that you manage;    

In the above scenario a Trading agent may be encouraging a client to sell a property at a time that may not be the most appropriate for you.

The other conflict is between Strata Management and Rental management as outlined below.  

“Providing rental property management services to a strata unit owner in a strata building that you or your brokerage manages;”

-Represent Offering a discounted rental property management rate to owners in a strata corporation that the brokerage manages (is the strata corporation actually subsidizing the individual owners? 

The larger issue is how BCFSA recommends how to manage a conflict of interest between managing a rental in a Strata Corporation you manage is as follows:

 “This potential conflict could be addressed by modifying your duties in advance by designating a primary and secondary client. The secondary client must understand and agree that the primary client the duties owed to them may be limited in certain situations”

The above statement recommends that when the Strata management company also manages a rental in the same building they have one of the parties sign a document stating one party will be the primary and the other will be the secondary client. In all cases the rental client will be identified as the secondary client because the strata earns more revenue for the property management company.

What does this mean for the rental client? Section 30 of the real Estate Council rules outlines the duties of a licensee and includes acting in the best interest of the client, taking lawful instruction, maintain confidentiality, and take steps to avoid conflict of interest. 

When one party agrees to have the services they receive modified by their agent they are being under-represented in the times they need them most, which is when a conflict arises. As a landlord when you hire a property manager you should be able to expect they will always be able to represent your interests. 

The issues they may not be able to assist you with are bylaw infractions, CRT claims filed against you and when insurance claims are not being handled properly. These are the most important situations that you should be receiving professional advice and guidance on.      

Link to real estate council rules 

https://www.bcfsa.ca/about-us/legislation/real-estate-services-rules#section30

There have been a significant number of cases filed in the CRT when bylaw infractions have been applied incorrectly to tenants and the fines overturned due to strata management companies not following proper process to apply the fines in accordance with the Strata Property Act. In these cases your rental property manager should be advising that the process has been applied incorrectly before it reaches the CRT to resolve the issue with the Strata. 

We recommend you don’t hire the strata management company who is managing your building to also manage the rental property in the same building. This protects you and your tenant. We also recommend you ensure the manager you hire is licensed by BCFSA to protect your rights as a landlord. 

Cartref Properties has worked in both rental and strata management but only provides rental property management specializing in properties located within Strata Corporations.

Renting your property can be confusing. Cartref Properties can assist you, call today to discuss your needs or find more information about us at: www.cartrefproperties.com