Real Estate Service Rules “Office Signage Required”
Cartref Properties started operating in March of 2020, the same day the pandemic started. Cartref Properties is a licensed brokerage providing rental property management services to investor owners specialising in products located in Strata Corporations.
In order to operate a licensed property management company in BC one has to obtain the proper licensing from BCFSA. Every brokerage must have a Managing Broker who is actively engaged in the management of the business, and may only offer the services the brokerages have licensing for. There are three forms of licensing under BCFSA. Sales which is referred to as Trading, Strata Management which is the management of Strata Corporations and Rental Management which can include rental building management and individual unit management.
BCFSA has many rules and regulations agents, brokers and brokerages must adhere to while operating their business called the Real Estate Service Rules. When I was opening my brokerage I would indicate to friends who owned different types of businesses about a particular rule in the Real Estate Service Rules. Rule 36 requires all brokerages to display a business sign at the entry of the building where the brokerage head office is located. Friends would say I am not required to have that and I had to explain it is a specific rule to the Real Estate industry.
The reason for the rule is to clearly identify for the public that a real estate brokerage is located at the brokerage’s address location. This is to help protect the public from business opening in locations where it is difficult for the public to access. Home based businesses are permitted if they meet the requirements, though they must still meet the sign requirement at the entry of the property. By requiring the brokerage to have signage at the entry of the building it adds professionalism to the industry. Whatever building the brokerage head office is located in the name of the business must be displayed on the building directory.
When searching for a property management company it is important to select a company to represent you who is following the rules and regulations to ensure your property is not subject to claims of impropriety. If your property management company doesn’t have their business sign at the entrance of the building where the office is located they are in violation of the Real Estate Service Rules. BCFSA’s website has a section where the public can identify if their property manager is licensed and this will also indicate the location of the brokerages office. This service makes it easy for the public to visit the location of the brokerage to identify if the company exists.
Licensed property managers must take law full direction from their clients when performing their duties. If a brokerage is violating the Real Estate Service Rules, how are they going to manage your property, what other rules may they choose not to follow, and how will that affect your property.
Cartref Properties is located at 310-220 Brew Street In Port Moody
Need professional 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
“How much do you have in the trust account for me?”
When hiring a property manager to manage your rental property there are many things you should look for. One key factor is how are they handling your money?
I was reading a decision in BCFSA regarding the Special Compensation Fund, (link is below) where the party involved stated they were unaware of exactly how much money he owed to his clients. What is the Special Compensation Fund you ask?. When funds by a Property management company or Real Estate company are held in trust the interest earned is deposited in a fund Called the Special compensation fund. Interest earned on funds held for security deposits is not part of this fund as that interest may be owed to the tenant. This fund is a source for clients to recoup funds they may have been owed by the agent due to misappropriation of the funds.
All Licensed Property Managers in BC are governed by the same authority which is BCFSA and must follow the same rules and legislation. The real estate service rules has a section on the requirements every brokerage must adhere to when handling client funds. With Rental Property Management the rent and security deposits collected can be held in an account on behalf of the client or a pooled trust account. In either case the brokerage is required to keep records of all transactions in and out of the accounts, and for the pooled trust account keep a separate ledger of the transactions for each client.
The reasoning for the brokerage above identifying they were unaware of the amount of funds they had for their clients was due to them moving funds from the trust account to their general account to pay company expenses. This is a clear violation of the rules regarding management of the funds.
When hiring a property management company always request or demand a monthly statement of the activity at your property. This statement should clearly show the funds coming in and the expenses coming out of your account. It would also show you a balance of the funds held at the brokerage in your name. If you are not receiving a monthly statement, it is possible your property manager is not following the rules regarding managing your money, they might not be licensed most importantly you need a new property manager.
An interesting read click below
https://www.bcfsa.ca/media/3119/download
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
What is a tenant favourable market?
Similar to the sales market there are times when the rental market is owner favourable and when it is tenant favourable. At the beginning of the pandemic the market quickly turned to a tenant favourable market. Tenants had the opportunity to take their time and view multiple properties, negotiate rents before making an application to rent. The market then turned to an owner favourable market when home sales escalated which caused a reduction in the number of rental properties in the marketplace. This rapidly increased rental rates and had owners receiving multiple applications for properties after only one showing. Owners had the choice of applicants for their property.
In recent months the market has shifted again to a tenant favourable market. As housing sales have slowed an increase in rental properties has slowed the market. This allows tenants to be more selective when choosing a place to rent. What does this mean to landlords?.
In a tenant favourable market it may take a bit longer to find the right tenant to rent your property. I am often asked how long does it take to find a tenant?. There is no correct answer to this question. Finding a tenant is best described as finding the right match for your property and a potential tenant.
A property may be advertised for a lower price which attracts lots of interested parties, resulting in multiple applicants for the property. The concern is are these applicants suitable for the property?. Alternatively advertising a property at a high price may result in the right applicant not considering your property. It is important to review the current market conditions in your area to determine what the market is renting for at that time. Identifying your properties place in the market compared to other properties for rent and pricing it accordingly will result in the appropriate potential tenants considering the property.
During a tenant favourable market it will take more showings, time and effort to find the right fit for your property. It is important in these conditions to be patient and ensure you perform the necessary due diligence when selecting a tenant. A tenant favourable market allows potential tenants to look at multiple properties before submitting an application. Often we see landlords make the mistake of deciding on a potential tenant based on what they looked like or how they felt about them during the showing. Tenant favourable markets can cause landlords to be desperate to have their property rented instead of vacant and take shortcuts in the tenant selection process. Due diligence is more valuable during a tenant favourable market.
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
Rentals are coming, Rentals are coming
Recent changes of the strata property act have removed rental restrictions for all strata corporations. Since the change I have attended multiple seminars talking about the changes and most of the questions and narrative is how can we make our building less attractive to rentals. Many councils are looking for ways to try and eliminate them including raising the age limit to 55, increasing strata fees, and discussing other options on how to encourage investors not to buy into their building. Rentals won’t come just from investors, they will come from current owners.
There are three things strata corporations can do to improve their experience with rentals in their building.
1- Understand the Law - Many councils and strata management companies in the past have been reluctant to effectively communicate with tenants and chose to communicate only with landlords. The Strata Property Act provides rights to tenants and one of the main areas overlooked is communication with bylaw enforcement. If a renter is in violation of the bylaws the strata corporation has a responsibility to inform the tenant of the infraction along with the owner of the property. With the advent of the CRT which has given owners and tenants a venue to dispute issues at strata corporations, many cases have been heard in the CRT where tenants were fined for bylaw infractions without proper due process of the act being followed. This has resulted in the fines in these cases being reduced or reversed.
2- Improve Communication - In addition to understanding the law, improving communication with all parties involved in the rental of the property will improve stratas rental experiences. When an owner rents out their strata lot there are more people who need to receive communication. The landlords could manage the property themselves or hire a property manager to manage it on their behalf.
With technology today most strata management companies have electronic tools for communicating information about the property to owners. When an owner rents their property many companies are hesitant, or lack the ability to add tenants or rental property managers to their electronic communication. Strata councils should ensure their management company has the ability to add the other parties to their communication tools. This will improve the communication with tenants and landlords, which in turn will improve the tenancy at the property. Tenants want to feel a part of the building like any other resident and have the rights to necessary information. Providing the information up front will reduce the potential issues ending up in the CRT which eliminates significant time and effort for council and management companies. Providing the landlord only with the notice of the annual fire inspection and then applying a fine to the tenant due to the landlord's failure to forward the notice on time, is a violation of a tenants rights.
3- Recommend landlords don’t use the Strata Company managing the building -
Strata managers and rental managers are governed by the same licensing governing body BCFSA. It is recommended by BCFSA that companies managing a strata corporation don’t manage rentals in properties they provide strata management service to. The reason for this is there is a natural conflict of interest. When a company manages both the strata and a rental in the same building, one of the two parties must be identified as the primary client. In every case the strata corporation, the larger client will be identified as the primary client. Identifying one as the primary client means that when there is a dispute between the two parties the strata management company won’t be able to represent the secondary client due to the conflict of interest as they must represent the primary client. This leads to many landlords not being provided proper advice during a conflict between the strata corporation and the owner. The main area for conflict during a rental is enforcement of bylaws. As mentioned above, understanding the law and improved communication can reduce issues and or concerns over bylaw enforcement.
When a management company manages the rental it takes direction from council on bylaw enforcement and council often has an expectation that when they also manage the rental the management company has influence over the landlords decision to pay a fine and or not dispute the infraction. Failing to provide the landlord or tenant proper information about the bylaws and their right to dispute it is a violation of the landlord, and tenants rights. More and more cases are being brought to the CRT with fines being overturned because of lack of due process being provided to the landlord or tenant.
It would be prudent for strata councils to encourage, even recommend owners use a rental management company other than the strata company managing the building. This will separate any conflicts of interest and eliminate concerns for lack of representation for the landlord. Strata council could interview some rental management companies and recommend these parties to their owners who are considering renting their strata lot.
Are you a strata council member, would you like to know more about landlord/tenant rights in your strata corporation. Cartref Properties provides information sessions to strata councils answering questions on renting in a strata corporation. It may be worth council having an opinion that is not from their strata management company.
Cartref Properties doesn’t provide strata management services only residential rental management and we specialize in renting products in strata corporations.
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
Whose home is it?
Recently I was reading a social media post from a landlord asking about what they can do when a tenant isn’t keeping the unit to a standard of cleanliness they expect.
Renting a property you own brings many emotions and feelings. My experience has seen many people who own a property they live in and then rent, struggle seeing other people reside at their property. Owners have asked me to instruct tenants how to decorate the property, don’t let them put too much furniture in the unit, tell them they are not allowed to hang pictures on walls, and how to clean the unit. All good intentions.
The definition of a home is “a house, apartment, or other shelter that is the usual residence or a person, family or household”. Landlord’s own the property, but when a tenant occupies a rental unit it becomes their “home”. Each person will arrange a home differently and tenants have the right to make the rental unit feel like home.
If tenants are keeping the rental property dirty or making minor damage to a wall they have until they vacate the unit to correct this issue. You can have a cleanliness clause in your addendum, though that is hard to enforce as it is subjective. Tenants with kids may have lots of stuff in the property, and marks on the wall that tenants without kids don’t have.
You should be performing regular inspections, and during this time you could discuss the issue of the cleanliness of the property with the tenant, expressing you would like to see it in a better condition. This can be tricky as some tenants may take offence to this suggestion, as an indication of their lifestyle.
As a Landlord it may be difficult viewing your property when other people live there. In this case it would be prudent to utilise a property manager eliminating emotions and feelings of managing your property. When Landlords allow emotions into managing their property it can lead to mistakes and errors which could violate tenants rights. When a tenant occupies the rental unit and it becomes their “home” they have rights a landlord must adhere to. It has been my experience that when both parties follow the law and respect each other’s rights Landlords and tenants have a successful tenancy.
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