The Residential Tenancy Act?
I read online many landlords complaining about their issues and the Residential Tenancy Act. One that is occurring a lot recently is owners moving back into their property with a two month notice to vacate.
It is important for landlords to understand “The Residential Tenancy Act” is law in BC and governs tenancies. As in many cases when you are on the wrong side of the law it often is a negative situation. Complaining about the law instead of understanding it is not helping your situation.
For the two month notice to vacate for landlords use there are some very specific terms the landlord must adhere to when evicting a tenant. Two very common misunderstandings by landlords are who can move in when it is for family use, and for how long you must reside there bevore you can re-rent the property.
The Residential Tenancy Act section 49 outlines who qualifies for the family member moving into the property. People who qualify are close family members and the family members must be one of the following: The individual’s (owners) parent, spouse or child, or the parent or child of the individual’s (owner) spouse. If the person you are moving into the home is not one of these people the tenant you are evicting may have a claim against you for an eviction not in good faith.
The second common issue with the landlord’s use is when you vacate a tenant the landlord or close family member must occupy the unit for a minimum of six months. There are cases in the RTB decisions section where owners have argued extenuating circumstances which have caused them to need to re-rent the property after serving a two month notice. In most cases the RTB rules in favour of tenants when the family member doesn’t occupy the unit for six months.
Occupying the unit does not mean renovating it after the tenant moves out, it means living and using the property. It also doesn’t mean your brother, aunt or cousins can live in the property as they don’t fit the close family member definition.
When a landlord wants their rental property back it is very important they understand the law and the potential outcomes of not following the law. Many tenants are well versed in this section of the Act and won’t hesitate to challenge an owner when they feel they have been evicted in bad faith. The penalty for evicting a tenant in bad faith has a maximum of one year of the tenants current rent as a penalty. Many decisions have included a penalty where one year’s rent has been awarded to the evicted tenants.
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
Intuition and Luck
At my recent Toastmaster meeting I was asked to speak about luck and intuition.
I quickly found myself talking about my work which is rental property management. I am the managing broker of Cartref Properties who manages rental investment properties for our clients.
The question was do you think luck and intuition are intertwined?.
I went on to say how I do believe that they are interconnected and explained that in my work I am using my intuition all the time and when I follow the intuition I find myself luckier.
On the day of the question I had received an application from two people about a house we have for rent. The two people supplied their financial detials. One party was self employed and supplied their bank account for their business. In reviewing the information I noticed the bank account often had less than $300 in it. I asked them to provide their personal bank account information, which they did. That information did not specify who the account belongs, and for two of the three months it was in a negative balance.
The question is am I lucky or is it intuition. All these details are telling my intuition not to rent to the person as they are not going to be able to pay the rent. I find when I follow my intuition I find myself luckier. If I had rented to this person I could see the rent being late regularly and this causing issues during the tenancy.
We should never judge a book by its cover, good or bad. This individual presented themselves in a very good manner during the screening process to view the property, and at first I liked them as an applicant. That is the cover of the book, but it is important to read all the pages to clearly understand what the story is. Don’t be fooled by the cover, do your due diligence and find the answers you need to make an informed decision.
What is that quote?
“The harder I work the more luck I have”
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
Utility Payments
I have heard many landlords ask the question, if I have two units in my house do I make the upstairs tenants pay the hydro or should I keep it in my name?
Section 13.2 of the Residential Tenancy Act outlines the standard term requirements of a tenancy agreement in BC. One of those is the services or facilities provided during the tenancy. Services include the utilities provided.
When renting a property that has more than one unit in it, with two separate lease agreements the utilities are not allowed to be paid by one tenant and asking the other tenant to reimburse another tenant. The reasons this is not permitted are if the upper level tenant has the hydro account in their name and the lower level tenant fails to pay them their portion of the cost, the upper level tenant has no recourse to recoup these costs. The landlord is not permitted to make one tenant provide a service, in this case utilities, to another tenant as part of the condition of renting their property. The two tenants do not have a contract between each other stipulating who pays who. The agreement is between the tenants and the landlord.
When you have a situation that has the utilities split the best thing to do is for the landlord to pay the utilities and then send each tenant copies of the monthly invoices explaining how much their cost of the invoice is for reimbursement to the landlord. In this process the tenants are able to see the costs, and their usage of the utilities being used and the landlord is reimbursed at the earliest time for those costs. Providing the tenants the invoices reduces issues or concerns as they are provided real information about the costs.
Some landlords pay on equal billing, and then at the end of the year ask tenants to make up any differences. This can be an issue if the tenants leave before the utility squares up the equal billing costs. We find when tenants can see their usage they aslo adjust the amount of utilities they use, reducing the costs as they are paying and are able to control their cost by adjusting their usage. In the winer if they see the costs of heat going up they may trun it down when they are out of the house, or turn off lights more frequently.
The standard tenancy agreement in BC has a section where landlords indicate what utilities are included in the tenancy agreement, including hydro, heat, water, natural gas, tv and or internet. Once these items are included you are not permitted to alter these without the tenants agreement. Even though you indicate on the front of the agreement what is and isn’t included it is prudent to have an addendum which outlines how and when utilities are paid. This is important in the event you end up at the Residenital Tenancy Branch as it will describe when the utilities are expected to be paid, and that determines when they are late.
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
Giving notice to vacate by tenants?
When has your tenant provided notice to vacate the property?
A tenant has a responsibility to provide proper notice when vacating the property.
Section 52 of the Resiential tenancy act describes the format a tenant must provide notice to vacte the property for it to be effective. The notice must be in writing, and include the following information:
-be signed by the tenant
-give the address of the rental unit
-state the effective date of the notice
Section 45 of the act states when the notice must be sent to be effective. In BC a full calendar month’s notice is required to vacate the property. The full month can depend on when the rent is payable. If rent is due on the first of the month the notice must provide notice on the last day of the previous month. If rent is due on the 15th of each month the notice would need to be provided on the 14th day of the prior month for it to be effective.
When a tenant provides notice and fails to meet these requirements they have not provided proper notice. The landlord then has a choice to make. They can enforce the Residential Tenancy Act laws and require the tenant to provide proper notice. Or they can accept the notice and allow the tenant to vacate the property.
For example if the tenants are on a month to month agreement and rent is due on the 1st of the month and the tenant provides notice on the 1st of August to vacate at the end of August, they have not provided proper notice. The landlord can choose to accept the notice allowing the tenants to vacate without holding them responsible for the September rent. Or they can indicate to the tenant it is insufficient notice which would make them responsible for rent for September, if the unit is not rented again on September 1st.
When the tenant moves out without proper notice and a landlord indicates it is not sufficient notice they must take steps to mitigate their loss. The first step here is to make an effort to
re-rent the property for September 1st. This must be a legitimate effort and a landlord be able to show they were attempting to rent the property.
Even after the tenant vacates the property and it has not been rented this doesn’t automatically give the landlord permission to keep the security deposit. A landlord must have either the tenants permission and or an order from the Resdential tenancy Branch to keep all or part of the security deposit. In the case when insufficient notice to vacate is provided the landlord would need to file a claim with the Residential Tenancy Branch to keep the security deposit towards the unpaid rent for September. During the hearing the Residential Tenancy Branch will determine if the landlord has tried to mitigate their loss by trying to rent the property again. If the unit is re rented for September 1st the security deposit may only be used for damage issues at the property. A landlord is not allowed to charge two parties to rent the same property.
Only after receiving the monetary order from the RTB is the landlord permitted to keep the security deposit funds for the unpaid rent.
A good pracitce is to have a clause in your addendum that clearly explains to the tenants requirements for providing notice when vacating the property. This provides additional information in the event of a hearing when the tenant may indicate they were not aware of these requirements.
Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Placement fees vs no placement fees
Cartref Properties provides rental property management services specializing in managing rental properties in strata corporations. When clients ask about our service they are always asking what is the cost to find a tenant and manage the property. We have two main fees. The first fee is a tenant placement fee and the second is the monthly management fee.
The tenant placement fee is normally equal to half of one full month’s rent of the property. Tenant placement includes advertising the property, receiving inquiries about the property and reviewing potential inquiries, showing the property and screening tenants. It has multiple steps involved in the process.
The monthly management fees are based on a percentage of the monthly rent. Each management company offers a different percentage amount for their management fees.
We have also seen management companies who don’t charge a placement fee, they charge a higher monthly fee. Our question is which is better for your property.
Let’s compare two properties rented at $3,000 per month. A traditional lessing fee would equal $1500 for the tenant placement and is a one time fee.
If one management company charges 6% for a monthly fee it would be $180 per month.
If the other company charges 10% for a monthly fee it would equal $300 per month. The difference would be $120 per month. If you calculate the difference of $120 per month it would take 12 and a half months to equal the placement fee of $1500 for that property. What this means is for every month your tenant resides at your property past the 12 and half months you are paying a $120 extra in management fees.
Our experience is that tenants stay in their rental properties on average for 24 to 36 months. For a tenant who resides in the unit for 24 months that equals an extra $1380 in management fees during that tenancy. If the tenant resides in the property for 36 months that would equal an amount of $2820 in additional management fees during that tenancy.
When interviewing which property management service provider you are choosing we encourage you to review all the fees you may encounter during the management of your property.
Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com