The Biggest Mistakes Landlords Make
I recently sat down with the charming Harry Fine, a strongly established Toronto paralegal and ex-owner of the Bowlerama franchise. He was kind of enough to share his years of wisdom as a well-versed ex-adjudicator on the Landlord Tenant Board. He presented a plethora of valuable information about what landlords should avoid and how creating a strong rapport between the owner and the tenant is such an important thing. We specifically went in-depth about the regulations for Ontario. These laws most likely differ from those of other provinces and states. Harry emphasized that when it comes to landlords: “You’re not in a position of power without knowledge.”
One thing that really stuck with me, is his mention of landlords being the only profession where the customers generally know the law more than the owners. Landlords, new and old, need to understand all the regulations if they want to remain safe. The residents will almost always ensure they are legally protected. A landlord should know the laws for rent increase, rent control, any issues with the human rights code, legal/illegal clauses within the agreement and how to be ready for tenancy.
Here’s a list of the common mistakes landlords make:
Your relationship with your tenant is very important. It will definitely ease any issues if you don’t sour the relationship through toxic encounters or attempting to alter the agreement in a way that puts them at odds. Being fair to your client is always the best course of action. Not even just from a morality or ethical position, but from a legal perspective to keep you safe.
Issues of payment from the tenant aren’t uncommon. How you approach this is very important. Don’t just leave a notice for them, have a conversation. Be personable. Let them know that you don’t want to evict them. They need to know that you’re running a business and you’re in a tough spot if you don’t get paid. Give them fair warning that you have no choice to go to the tenant board. Ensure that you supply them the notice on the first of the month to give them the most time possible. Inform them that you will need to file an N4, which states that there tenancy will end early due to lack of payment. Provide them an N8 for persistent failure to compensate, which states they need to vacate the property after the lease agreement ends. If you need to do an eviction, keep your hands clean.
You need to be aware that the Landlord and Tenant Board in Ontario is backed up. It may be in other regions across North America as well. The landlords are in a bad spot as it takes months to have your claim addressed. Your best course of action is to know all the required regulations to streamline your security as best you can.
Be careful with rent increases. Each province and state has their own specific laws, educate yourself on what is specific to your region. Do a proper lease right from day one to avoid any issues that could arise. If you don’t provide proper notice for rent increase of the first year, this would invalidate your lawful rent throughout the entire tenancy in Ontario.
You cannot evict a tenant for no reason without compensation in Ontario. If it is no fault of their own, you are putting yourself at risk. The Residential Tenancies Act protects renters against unlawful increase and unlawful evictions. An N1 form is an official note of rent increase. If you’re even a day late you could possibly have to compensate your tenant.
Be aware of the difference between a fixed term tenancy (lease) and monthly tenancy. Fixed term can be weekly, monthly or yearly, while the latter is obviously a standard month. As the landlord, you can decide which type of agreement you prefer, ensure that this is clear to the tenant before they sign.
In Ontario, there is a mandatory lease agreement that both parties must abide by. There is a large number of clauses that a landlord can add to the agreement. For a list of these appendixes, feel free to contact me: jas@reccanada.com
Landlords need to be more proactive. They need to know that it is a highly regulated business. Know the rules. If you have any concerns get in touch with a professional (a paralegal) before any issues arise so you can solve it ahead of time.
