Deadbeat Tenants

Seasonal Trailers May be Covered Under RTA in Ontario

2011-10-28T06:52:00.000-07:00

If you own a seasonal trailer in a trailer park in Ontario you may be covered under the Residential Tenancies Act.

Section 5 of the Residential Tenancies Act exempts most trailers from the Act. However, if you have put an addition or sunroom on your trailer to might be covered under the Act. Section 5 exempts the transient, travelling, camping public from the Act.

If your park also has year-round residents, then the park is open all year. If you have a permanent/semi permanent addition you are probably covered. It doesn’t matter if you pay monthly or by the year. What is important to look at is your receipt. If you are being charged HST then you are most likely exempt under section 5 of the Act.

To Read More Please CLICK HERE!!

Chasing the Tenant

2011-10-28T05:37:00.000-07:00

Chasing The Tenant

Are you a landlord that has a tenant you are constantly chasing for their rent?

Do you have a tenant that is always late with the rent? Are you tired of chasing them for their rent payment? Are you tired of filing out and serving an N4 just to get them to pay their rent?

You can file file with the Landlord and Tenant Board to end the tenacy because the tenant has been persistantly late in paying the rent.

Read More!!! Click Here!!!!!

Is An Ontario Tenants Rent Ever Late??

2010-04-06T05:35:00.001-07:00

The Residential Tenancies Act makes it illegal to charge a tenant a late payment fee. If you are forbidden from charging a late fee is the unpaid rent even considered late??

Rent is due on the first of the month. If it’s not paid on the first, on the second I serve the tenant an N4 to collect the rent owing. This notice gives them until the 16th to pay or move out. If they don’t do anything, on the 17th the landlord can file an L1 application to have the tenant evicted and terminate the tenancy and collect the money owing. This costs $170.00.

Filling out and serving the N4 has costs involved that are not recoverable. The time spent filling out the documents, printing them, serving them etc. If we were allowed to charge a late fee these costs would be covered by the late fee.

Tenants know there are no penalties for paying their rent late. Landlords can’t charge a late fee when the rent is late and we can’t charge interest on outstanding balances.

While the rent owing and the application fees are recoverable, in most cases they aren’t collectable. Time preparing documents and going to hearings are not compensated.

When all is said and done deadbeat tenants owe landlords a lot of money. Trying to collect what is owed is another story. Then there’s those bleeding heart types that think the tenants are always right. The ones that think if the tenant can’t afford the rent the landlord should let them live rent free. We are not a charitable organization whose mission is to house people rent free and pay their heat and hydro so they can spend their money on the really important stuff – beer and restaurants.

Rent Guarantees

2010-04-05T11:07:00.001-07:00

In Ontario landlords can ask for a rent guarantee. It’s perfectly legal to ask a tenant to have a third party guarantee their rent will be paid.

Welfare and Disability will quite often send the rent portion of a tenants cheque directly to the landlord. This arrangement is not a rent guarantee because the tenant can change this at any time without notifying the landlord.

In the Human Rights Code, Regulation 290/98, 2. (1) A landlord may require a prospective tenant to obtain a guarantee for the rent. By requiring a rent guarantee the landlord is somewhat protected. I say somewhat protected because you still have to collect from the guarantor if the tenants fails to pay their rent.

As a landlord we are now going to be asking the majority, if not all of our new tenants to get a rent guarantee. In doing this if the tenant defaults on their rent payment we have another person we can legally go after for payment.

From April 1 2008 to March 31 2009 the Landlord and Tenant Board received 85,840 applications under the Residential Tenancy Act. Of these 92% were filed by landlords while only 8% were filed by tenants. Of the applications filed by landlords 59,053 were L1’s to evict the tenant and terminate the tenancy for nonpayment. These applications cost landlords $170.00 each. Ontario landlords spent over $10,000,000.00 just in application fees to evict nonpaying tenants.

The Tenant From Hell

2010-03-11T12:19:00.001-08:00

We have been forced to deal with the tenant from hell for almost a year now. I’ll call her Evil Sheila to simplify things here.

We’ve heard every imaginable excuse out of her as to why she can’t pay her rent again this month, her cheque is late, her cheque was lost, they put a hold on her cheque, welfare put a hold on her cheque until her disability goes through. It’s an endless spewing of B.S.

Her first hydro bill was almost $650.00. She refuses to pay it. She contacted one of those free lawyers that think all tenants are perfect and all landlords are bad. We got a threatening letter from this lawyer. When Evil Sheila was asked about the lies she told this lawyer the Evil One denied contacting the lawyer. She then wanted us to hire her so she could pay her rent. We rented her a place to live, we are not required to give her a job as well. A letter was faxed to her lawyer detailing the inaccuracies (lies) in the Evil One’s statements. Never did hear back from her.

With rental arrears of $2,500.00 we served her the N4 giving her 14 days to pay in full or get out. She did neither so we file our L1, paid the $170.00, got our hearing date, served the Evil One her Notice of Hearing. At the hearing she denied getting the N4. Despite our evidence to the contrary, that she was in fact served the N4, we had to start the whole process over again. I quickly filled out the N4 and gave it to her right in front of the Adjudicator with the comment “deny getting served this one.”

She now owes close to $2,000.00 for hydro. This won’t be going up any except for interest because we disconnected her for non payment. That was March 1st, on the second they had a generator hooked up, that they wired into the panel box themselves. Neither her nor her boyfriend are electricians so it’s a fire hazard. They can afford to rent/buy a generator and put $20.00 worth of gas in it a day but they can’t afford to pay their rent or hydro.

There are 2 wood stoves in her trailer. It’s between 80 and 90 degrees in there. She’s also running 3 space heaters, 2 old fridges, a washer and dryer, and feels the need to turn on the oven as hot as it will go and leave the door open. She never turns lights off, her Christmas lights outside are on 24/7 and she wonders why her hydro bill is so high. Duh!! I guess you are stupider than I first gave you credit for.

No money for rent or hydro but they always have a fridge full of beer and a wine rack with at least 10 bottles in and another 5 or 6 bottles of other alcohol on top of the bar. They are in the local bar drinking every day. They eat in restaurants most of the time, probably because she thinks the oven is a furnace not something you would use to cook on.

Her lies at the Board Hearing, and the adjudicator taking her side have given her at least one more month to live without having to pay her rent.

Hot Tubs Allowed in Townhouse Condos

2010-03-02T09:24:00.001-08:00

Ontario Court of Appeals has upheld a lower court decision to allow a hot tub on the patio of a townhouse condo.

Jim McMahon asked the condominium board, Wentworth Condominium Corporation 198 for permission to put a hot tub on the patio of his back yard. The board denied his request.

He put the hot tub in anyway and Wentworth took him to court seeking an order to remove the hot tub. Wentworth lost and appealed the case. The Appellant Court upheld the lower courts’ ruling.

The Condominium Act, section 98, states the unit owner must get board approval to make an addition, alteration or improvement to the common elements. Although the backyard is for the exclusive use of Mr. McMahon it is considered a common element.

The Court ruled the hot tub was not and addition as it is temporary structure. They viewed it to be no different than a picnic table, BBQ, or kids swimming pool.

Many Condominium boards will now be rewriting their rules to clarify what is and is not allowed on a patio or balcony. At some point you’re going to have owners with things on their patios or balconies that are no longer permitted under new rule changes. Then the argument will be if he can have a hot tub why can’t I?

Some Really Great Information

2010-02-18T09:36:00.000-08:00

I've just read an article written by Jim Schleiffarth that contains some really important information that landlords should include in their lease agreements. He covers both residential and commercial leases. He goes into great detail on the subject including insurance. The information is general in nature and applies no matter where you live. At the bottom of the article please give Jim a thumbs up for a job well done. He deserves it!!

Click here to read Jim's article!

Why Ontario Landlords Should Use the Form N4

2010-02-17T08:17:00.000-08:00

The “professional tenant” needs to know right away that the landlord is not a charitable organization whose mission is to house everyone for free. Even if the rent is only a day or two late you should always serve the tenant with form N4. It will save a lot of headaches down the road.

If the rent is due on the first of the month and the tenant has paid, then on the second of the month you should be serving the tenant a form N4. The N4 gives the tenant 14 days to pay in full or move out.

If the tenant fails to pay what they owe and fails to move out, on the 15th day you can file either an L1 or an L2 to collect what the tenant owes and evict them.

Serving the N4 can be helpful as it creates a paper trail of communication between you and the tenant that late rent is not acceptable. You can then serve the tenant with an N8 to terminate the tenancy at the end of the term for being persistently late with their rent.

If you make it common practice to serve the N4 to everyone who doesn’t pay their rent on time none of your tenants can claim you are picking on them or singling them out over other tenants who do the same thing.

If you try to end a tenancy because the tenant is persistently late paying their rent, the Landlord and Tenant Board may choose not to end the tenancy. In the past they have made orders requiring the tenant to pay their rent in full on the date it is due. If they miss just one payment the landlord can file an application and have the tenant evicted for not following a Board Order.

As landlords we all want tenants that pay their rent in full and on time. While we understand that sometimes there may be extenuating circumstances that prevent a tenant from paying their full rent on the day it is due, this should be the exception not the rule.

Most Mobile Homes in Ontario Now Covered

2010-02-16T10:13:00.000-08:00

Most mobile homes in Ontario are now covered by the Residential Tenancy Act. This is welcome news for landlords.

One of the many hats I wear at work is that of Park Manager for a tent and trailer park. We have many year round tenants. Some own their own trailers and others rent the trailer and the site from us.

Evicting the deadbeat tenants used to be a difficult affair. We weren’t zoned a mobile home park, therefore there were no laws we could use to evict the non payers.

Our only remedy used to be the Repair and Storage Lien Act, and we could only use that for seasonal campers who left their trailers on their site over the winter. So far I’ve gotten rid of eight deadbeats this way.

Tomorrow I file application with the Landlord and Tenant Board to evict 2 tenants. The first I’m using the L1 to collect what’s owing and evict the tenant. This tenant has already been served the N4 for non payment of rent. We’re also filing and L2 to end the tenancy for being persistently late with the rent. The L1 costs $170.00 to file and the L2 costs $170.00 to file. These costs are recoverable, along with the rent owing. Collecting the debt is another story.

The second tenant was served his first N5 for having debris and junk littering his lot as well as garbage that was creating a health hazard. They corrected the problem in 7 days and voided the N5. After serving the N8 to end the tenancy for being persistently late with the rent the junk and garbage started piling up again. He was served his 2nd N5, for which we are filing an application and he has no remedy of voiding this N5. He then built this structure out of scrap wood that site right on the corner of two roads. You can’t see to turn, you can’t see kids walking to the school bus. I’ve had several complaints of near misses at this corner. In fact I almost had a head on collision with a coworker as we both tried turning this corner. He’s been served an N7 for impaired safety. The L2 application covers all of the notices he was sent. I’m sure his lawyer thinks it’s over-kill. I’m just happy to finally have a way of getting rid of these professional tenants.

Once we get our Board Order evicting them I’m sure we’ll have to pay the Sherriff’s Office $350.00 to deliver vacant possession.

At least I won’t have to chase them for their rent or constantly send them clean up notices.

Why Every Rental Unit Should Have Their Own Hydro Meter.

2010-02-12T07:21:00.001-08:00

In many high-rise apartment buildings electricity is included with the tenants rent. Every unit should have a meter and every tenant should pay for what they use.

We’ve been in the process over the years of installing hydro meters on all of the sites in the Park. We just installed them on 4 mobile home sites. One of these tenants knows what it’s like to pay your own hydro and his usage was reasonable. The other three tenants have never had to pay for hydro before. Their bills were excessive. We sat down with them all individually and educated them on how to lower their bills. When they got their second bill, two of the tenants cut their usage in half. The fourth tenants was even higher. Her hydro bill is $10.00 less than her rent that she can’t be bothered paying.

It’s tenants like tenant 4 that cause excessive hydro bills for the landlord. When utility bills increase by the allowable increase rate plus 50% of the rate the landlord can apply for an above the guideline increase.

Is it fair that all tenants will ultimately pay for the excessive use by tenants like tenant 4?

When you start making tenants pay for something that was previously included in their rent, like hydro, you have to reduce the rent accordingly. Should tenant 4’s rent be reduced to $10.00 a month?? I don’t think so. It’s a one bedroom, 1 bathroom, kitchen/dining room, living room and recroom. There are 2 wood stoves (we supply the wood so they don’t use expensive electric space heaters), yet she also uses 3 space heaters and the electric oven to keep the place about 90 degrees, 2 old fridges, washer & dryer, Christmas lights outside on 24/7, etc.

With conservation and the environment being the current buzz words, everyone needs to do their part. Making the excessive users like tenant 4 pay for what they use or have their service disconnected is the only way to deal with them.

Things Looking Up for Ontario Landlords.

2010-02-09T07:23:00.000-08:00

The Landlord and Tenant Board in Ontario has increased their monetary jurisdiction from $10,000.00 to $25,000.00. Along with some tips on how to collect what’s rightfully yours.

Effective January 1 2010 landlords can recover up to $25,000.00 in arrears and property damage, up from $10,000.00. Unfortunately collecting from these “professional tenants” hasn’t gotten any easier. They are usually on welfare or disability and those cheques cannot be garnisheed.

Once you have a Board Order you can file it with the Courts for collection. Always make copies of any cheques a tenant gives you. This information is very useful when trying to have the Courts collect the debt for you.

You can also put a lien on any vehicle they own. If they sell the vehicle you get your money, or at least a portion of it.

With the information from their cheques you can attempt to garnishee their bank account. A good time to file this with the Courts is when people start getting their tax refunds.

You can also turn the matter over to a collection agency. Their fees are usually pretty steep, but you only pay if they collect. Something is better than nothing.

You can and should report them to the credit bureau.

Quick Spruce-Up Between Tenants

2008-04-23T22:52:00.000-07:00

Time to do a quick spruce-up between tenants at one of your rental properties. The walls have lots of holes in them from previous tenants hanging pictures and things on the walls over the years.

You could just cover the walls with wallpaper. The drawback is that it is difficult to clean between tenants. One a corner or a seam starts to peel and gets ripped you need to re-do the whole room, which is expensive and time consuming.

You could replace all of the drywall, another costly option. Depending on how bad the walls are, replacing the drywall might be your only real option.

You want to paint with something that is easy to clean and that usually means a semi-gloss. You don’t want to use white because it shows any dirt really quickly and always seems to look dirty.

A textured paint, like Ralph Lauren Suede, will do a decent job camouflaging the imperfections but it’s expensive. You can make your own a lot cheaper. Go to your local pool supply store and pick up some filter sand. This sand is very fine.

In a separate 2 gallon pail, put in one gallon of paint. Start adding the sand to the paint while stirring it. Be sure to keep track of how much sand you are adding because one gallon of paint will not do the whole room. When you get the right consistency for the coverage you want start painting. Remember to stir the paint often because the sand will sink to the bottom.

You can also put a clause in the lease specifying that nothing can be hung on the walls or that only small finishing nails can be used to hang things.

Buying a Rental Property

2008-04-21T18:57:00.000-07:00

If you are thinking of buying a rental property there are somethings you need to consider, somethings you need to ask the seller, and somethings you need to put in your offer to purchase.
Questions to ask the seller.
1. Are any tenants in arrears? If so, how much?
2. Do tenants pay their own utilities?
3. When was the last time the rent was increased?
4. Do the tenants have signed lease agreements?
5. If owner pays utilities, copes of utility bills.
6. Ask for a copy of the financial statement showing income and expenses.
7. Does the building meet all the codes?
8. Are the rents always paid on time? Or are they a few days late?
9. How much are the property taxes?

Things to put in your purchase offer.
1. If there are deadbeat tenants that the current owner evict them before closer and that you get vacant possession of the building.
2. That the current owner be responsible for all eviction costs relateing to an inherited deadbeat tenant. You don't want to find out after you take possession that the previous owner lied about any arrears.
3. That the building meets all current codes. That the seller is responsible for bringing the building up to code.
4. All documents or copies of documents relating to the rental property be turned over to you. You will want copies of leases and any notices served on tenants.

You will also want to hire a certified building/home inspector who will provide you with a detailed written report. Make the offer conditional upon a positive inspection report. You might also want to get the advice of an accountant to find out if the property you are considering will turn a profit for you. If the rents aren't high enough to cover the operating costs it is obviously not a good investment. Make sure you have your lawyer look over all paperwork including leases. If he finds something lacking in the leases make it a condition of sale that new leases be signed.
Go to the library or book store and read as much as you can on purchasing and running rental properties. You'll want to go into this venture with as much knowledge as possible.

How to Collect Utility Bills

2008-04-03T11:25:00.000-07:00

You’ve got a couple or houses that you’ve rented out. The tenants pay their own utilities, and the utility bills are in their names. If the tenant skips out without paying the utility bills you figure you’re covered, it’s not your debt.

If your tenant skips out without paying their hydro the hydro company can and will go after you, the property owner.

Because of privacy laws the utility company cannot give tell you if your tenant is behind or by how much.

In some jurisdictions you can collect a hydro security deposit and in other jurisdictions you can’t. If you can collect a deposit you must pay the interest on the money deposited.

You could leave the hydro in your name and give the tenant a copy of the bill when it comes in, giving them 14 days to pay it. You might still get stuck with a hydro bill if they don’t pay it. The only way you can have the hydro service disconnected is if you don’t pay the bill. This option will have a negative effect on your credit rating. Also the tenants can take you to court for not paying the bill and having a vital service disconnected. They could end up with a large cash settlement in court.

The best thing to do in this case is to have a clause in the lease that the hydro or other utility is in their name and that they must provide you with proof of payment by a certain date. This date will depend on the billing cycle of the utility. You can also get the tenant to sign a form giving the utility provider permission to give you information regarding their account.

Breaking a clause in the lease is grounds for eviction and you should be able to get rid of the deadbeats before they owe too much. A good lease with all the right clauses is a good insurance policy against the professional tenant.

Deadbeat Tenants

2008-03-27T09:34:00.000-07:00

Deadbeat Tenants

Following through on doing a thorough check of a prospective tenant can seem like a daunting task. But it doesn’t have to be.

You’ve called the current landlord, the employer and the references. They all seemed to bend-over-backwards to tell you what a great person tenant x would be. A little too good if you know what I mean. But how do you find out more? Do you not rent to a potentially great tenant because of a gut feeling you have? To you rent to them only to discover you should have listened to your gut?

There are ways to verify the information given and get more information to base your decision on. In a previous post I mentioned the reverse look up for phone numbers. You can also do this for addresses, cell phones, email address etc.

Don’t over look doing a criminal records search, bankruptcy search, search the sex offender registry. Seems a little overwhelming doesn’t it. Not really, if you know where to go. I have found a really great site Click Here! where everything is all in one place. It saves you a lot of time trying to find the right information.

If you’ve been stuck with a deadbeat tenant you can claim this as a loss on your taxes as long as you can show that you tried to collect the debt.

Be wary of the deadbeat tenant who sends you a letter saying they intend to pay you. In some jurisdictions you can’t get a judgment if you can’t prove they intended to rip you off. The professional tenant will cover themselves here by writing a letter saying they never meant to rip you off and intend to pay you.

Good luck in dealing with and avoiding deadbeat and professional tenants.

Dead Beat Tenants

2008-03-26T15:17:00.000-07:00

You’re just a small time landlord with a big time headache. You’ve been stuck with a deadbeat tenant. There are two types of non-paying tenants, those who just don’t have the money and the professional tenant. Look out for the professional tenant; they know more about landlord-tenant law than most lawyers. It usually takes at least six months and a lot of money to remove a profession tenant. Do you have an iron-clad lease or tenancy agreement that will stand up in court? Was it one you downloaded off the internet for free or did you purchase a pad of 25 generic leases from your local book store? There are things you can do as a landlord to limit your exposure to becoming the professional tenant’s next victim.

Start by getting a copy of your local landlord-tenant laws. These vary, sometimes greatly, from jurisdiction to jurisdiction. Read it carefully and know what your rights are as a landlord should things go wrong down the road.

When a prospective tenant shows up you need to have them fill out an application to rent. This is not a lease or a rental agreement. Always make sure you get references as well as employment history and contact information for their current and former landlord. You also need to get written permission to do a credit check. If a prospective tenant is unwilling to give any of this information then move on to the next prospective tenant.

Take the time to call the references and previous landlords. A professional tenant will often get a friend to pose as their current landlord. To verify this use a reverse look-up of the phone number and see if the name and address match the information given. You can also go and see the previous landlord in person to make sure the information is legitimate. Spend the money on a credit report, it will be money well spent.

Once you’ve settled on who you’re going to rent to you need to get all your paper work in order. You need an iron-clad lease in case you need to evict. You need a pre-occupancy inspection report signed by both you and the tenant before they move in. This is important if you need to sue for damages at a later date. You should also get the vehicle information of the cars your tenants will be parking at the rental unit, including the VIN number. This is useful if you get a court awarded settlement because you can then put a lien on the vehicle for some or all of the money owed. In some jurisdictions you can also force the sale of the vehicle to cover the awarded costs.

If they pay by check keep a record of their banking information including account number. You may be able to garnishee their bank account should it become an option to recover damages.

The costs involved with protecting your property and investment from unsavory and professional tenants can be quite expensive. You have the lawyer’s fees for doing up all the paper work to make sure it will stand up in court. The time you spend verifying the references and costs of a credit check.

My former employer owns several rental properties on top of his other businesses. When I first took over there were no written leases or rental agreements on any of these properties. It took well over six months to get rid of a professional tenant as well as over $3,000.00 in court costs and Sheriffs fees to have them removed. This doesn’t include the lost rent, unpaid utility bills and damages. The last professional tenant I evicted was quick and reasonably painless. It only took 10 days to get a hearing and the adjudicator ordered the tenants be out in 10 days. It’s amazing how much time, aggravation and money proper paperwork can save you.

One product that I’ve found that is extremely useful is the Attorney’s Landlording Kit. It contains all the forms that you need in electronic format, which is great because you can customize them to suit your individual properties. In all there are 27 different customizable forms. At a cost of less than $50.00 it is great investment for the small landlord. Whenever you need one of the forms you just print it off. For more information on this useful product please Click Here!

If you have any success stories in getting rid of deadbeat tenants please share them with other readers of this blog. Thank you.

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