This is the second part in my Landlord’s Handbook series. Check out part one, Your Guide to Getting Started!
I’m super passionate about condo investment. I know that sounds strange to most people - and to be honest, it sounds strange to me - but I am. It’s awesome.
That’s because condo investment isn’t about money. It’s about reaching your goals. Having a passive income stream lets you travel more, write more, read more, see more, and do more. You’re more secure with a second income, and you’re investing in your own future.
Investing gets you closer to what you want to do with your life.
Now, that’s all great. I’ve written extensively on all of that. But when it gets down to it… what on earth does being a landlord mean?
Your legal responsibilities as a landlord
Your legal responsibilities are coded in the Residential Tenancies Act, and are Provincially regulated.
You must keep the home in good repair
This is pretty easy if you’re renting out your brand-spankin’-new condo. Nothing should break quickly with normal wear-and-tear. Even if it does, you’ve got maintenance fees and a building manager to help deal with it.
Buy your condo from an established, reputable builder, with a good track record
Forge a relationship with building manager and maintenance people in your building. Buy them Christmas gifts. I’m not kidding.
Stay in contact with your tenant. Email them once every quarter (schedule it!) to check in and make sure everything’s okay. It’ll improve your relationship and your tenants will take better care of the place because they appreciate you.
You must provide utilities
In a condo, these things will come with the building.
Go to the condo board meetings! You’ll make connections, find out goings-on and building issues, and just generally stay in the loop.
For utilities, you have options: you can set a standard utilities fee, increase their rent (beware of by-laws), or have them pay utilities themselves. Whatever is easiest for you.
If you’re paying for utilities, go green! Low-flow toilets, shower-heads, and eco-friendly bulbs are all negotiable during the building process, or they’re easy to install after.
You must provide requested legal documents
Your tenant must receive a copy of their lease or tenancy agreement, and written notice of your legal name and address. You must provide rent receipts upon request. You cannot charge a fee.
Stay organized! Keep a file folder with copies of every document you ever signed and received
Do a little bit every month. Print your rent receipts and save them, even if they’re not requested. It’s way easier to photocopy something you’ve got on-hand than to go fiddling through your computer to find the right date.
Message me if you ever need any help. Sometimes legalities and contracts can be daunting. While I’m not a lawyer, I’ve gone through this process dozens of times and can help you with whatever you need. Contact me!
You must treat your property like it's someone else’s home
You must give 24 hours of notice before you enter the property. There are exceptions for repairs, emergencies, or cleaning services, if stipulated in your contract. If your tenant agrees to let you enter at the door, even without notice, that’s okay then too.
If you want to show your unit to prospective renters, you need to have agreed in writing that your current tenancy will be terminated, and you can only show the property between the hours of 8 am and 8 pm.
Use the golden rule. You’re technically allowed to pop in at any time, if your tenant agrees to let you come in, even without notice. But would you want the same thing to happen to you? Use good judgement and treat your tenants well.
Give plenty of notice when showing the unit to prospective renters. I know it’s not legally required, but it can feel invasive to have strangers march through your home when you’re not ready.
If you ever need to change the locks, give your tenants plenty of advance notice, and ALWAYS exchange the keys in person!
You must be a decent human being
You cannot select or refuse tenants based on race, place of origin, ethnic origin, religion, sex, age, sexual orientation, marital status, family status (e.g. children) or disability.
Never request or restrict your tenant pool to specific genders, ethnicities, or ages when advertising your property. It’s asking for a lawsuit, and you’ll turn away decent people (and anger the rest).
Your legal rights as a landlord
As a landlord, you also have rights.
You may collect a rent deposit
The maximum amount is the same as the rent for one rental period, as stipulated by your tenancy agreement (eg. one year, one month).
You may access your own unit
See above, “You must treat your property like someone else’s home”
You may increase your rent
But only once a year. You must sent 90 days notice to your tenants.
The Ontario Ministry of Municipal Affairs and Housing sets a cap for rent increases, which only apply to buildings constructed before 1991.
In 2016, the limit is 2.0%.
In 2017, the limit is 1.5%.
New buildings that had their first occupancy date before November 1, 1991, are exempt from these caps (A big thanks to Harry Fine for clarifying this exemption!)
The Landlord and Tenant Board (LTB) can approve any increases above this percentage, for large repairs or major installations.
You may evict a tenant
If you give your tenant notice that you want them to leave, and they do not agree, you have the right to file an application and have a hearing with the Landlord and Tenant Board.
Reasons you may evict:
Unpaid rent, frequently late rent
Illegal activity in your unit
Your tenant causes excessive damage
Your tenant is incredibly loud, or disruptive to other tenants
Your tenant falsified their income or other documents
You or a member of your family want to move into the unit
Reasons you may not evict:
Discriminatory or prejudicial reasons
The tenant has children, even if they are loud
The tenant has pets, even if they are a nuisance
That’s pretty much it! Being a landlord is a lot about being a patient and calm person. Sometimes, you’ll get some not-so-nice tenants. It’s been a life lesson for me, learning to be patient and letting it work out in the end. It always does.
Have any questions? Feel free to contact me with any questions you may have!