Being a landlord is business ownership
Owning rental property has become a modern day vehicle for the average person to try and obtain wealth. Land or property ownership was originally the domain of the wealthy. The commoner rose up and said we want to own land as well, which became a normal part of society. Modern day society in most countries has a system that allows all people to own land and or property. The ownership of property now has emerged into a form for the average person to obtain wealth through the acquisition of property.
What many average people don’t understand about being a landlord is that, when you are a landlord you become a business owner. Managing a business is different than working as an employee. The biggest difference for a business owner is the emotional aspect of making decisions that affect other people. Often as an employee you are taking direction from someone and not making the decision.
Many average Landlords struggle with the emotions of making business decisions.
I hear many landlords saying things like the following:
- Have not raised the rent in the past three years because the tenants are very nice.
- The tenants appeared to be very nice when they looked at the property.
- My tenants submitted information that turned out to be false information.
- The tenants damaged the property
These are a few signs the “business” owner is making a decision based on emotions not based on facts. In BC there are restrictions on when and how much rent can be raised. As a business owner you need to evaluate the economic facts of operating your property, and base decisions on those facts alone. If your costs are going up and the market supports a rent increase, raise the rent every 12 months, which is the allowable time frame. If the market is in a downturn and you can’t re rent the property for the same price or more than it is currently rented for then don’t increase the rent.
Failing to do due diligence at the start of a tenancy when checking references for potential tenants creates a disaster for landlords. I have seen and heard many stories of landlords who thought the person was a good applicant, and when asking them how they came to that decision, it was mostly based on how they felt about the individual when they came to view the property. This is a decision based on emotion. I have met many potential tenants at viewings who come across as being very personable, yet the information on the application is inaccurate and references aren’t valid.
Don’t judge a book by it’s cover, read all the chapters when being a landlord.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Licensed Property Management
As a licensed property manager I am glad to see the regulatory body taking significant action against parties who are not complying with the licensing laws in British Columbia. See the link below.
https://www.cbc.ca/news/canada/british-columbia/unlicensed-property-management-penalty-bcfsa-1.6290396
I have spent many years working in the industry to learn the laws and regulations which are there to protect both Landlords and Tenants. I understand people who want to manage their own property or think it’s too expensive to hire a licensed professional. Having said that breaking the law should not be something one is allowed to profit from. Landlords and tenants have a confrontational relationship in the market today due to many factors, one being a lack of trust. When people are acting in a capacity they are not educated in, this leads to greater friction between Landlords and Tenants in the marketplace, making it unfair for Landlords and Tenants.
My recommendation to Landlords is, hire a property Manager. I suggest Tenants rent from property managers as well; this provides an additional recourse in the event of issue as licensed property managers can be sanctioned for unlawful actions, and therefore are more likely to follow the law’s.
There are many unlicensed people managing properties for other parties, making it more difficult for those of us who act professionally and responsibly to provide quality service in the market. If you're not sure your property manager is licensed you can check by searching the BCFSA website.
https://www.bcfsa.ca/public-resources/real-estate/find-professional
Licensed property managers are hired by Landlords to provide services to the owner of the property. They are not able to represent tenants in the finding of a rental property. There is a significant difference in these two tasks.
Many fables I hear from Landlords are that I rented to this person. They seemed like a nice person, I should have done more background research before renting to them.
From tenants it starts with I rented a place and the landlord seemed like a good guy….but after I moved in it was a nightmare.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
What is a form K?
Living in a Strata Corporation can be complicated, you own the home but unlike individual houses there are additional rules and bylaws residents must abide by. All Strata Corporations have “rules and bylaws” which are created by the ownership voting and approval at General Meetings. All residents including tenants living in Strata Corporations are required to follow the rules and bylaws. How do tenants know what the rules and bylaws are to ensure they are in compliance?
Strata Corporations are governed by legislation in British Columbia called the Strata Property Act. Section 146 of the act explains the requirement for landlords to provide tenants a copy of the rules and bylaws “before the tenant rents the property”. A “Form K” also known as “Notice of Tenant Responsibilities” must be signed by the landlord and the tenant before the start of the tenancy. The Strata Property Act also requires owners to provide a copy of the signed form K to the Strata Corporation within two weeks of renting the property. Many Strata Corporations have added bylaws making it a requirement that Landlords provide the signed form k as outlined in section 146, which provides Strata Corporations the ability to take actions including applying fines if a form K is not provided.
It is important to understand that having tenants sign the form K and sending it to the Strata Corporation isn’t all that is required. A form k is an acknowledgement by the landlord that they provided a current copy of the rules and bylaws to the tenant. When tenants sign the form K Landlord’s should provide current copies of the rules and bylaws, explain to the tenant why they are signing this form, as they are required to comply with the rules and bylaws and should read the documents provided to them. Another overlooked aspect is rules and bylaws often change during a tenancy. The Strata Property regulations standard form K identifies the need for tenants to comply with the “changed” rules and bylaws. During a tenancy, tenants may not be aware of changes to rules and bylaws unless the Landlord provides them with updates. A majority of tenants are not informed of communication in the Strata Corporation as the Strata Corporation will convey information to the home owners. It is the homeowner or Landlord's responsibility to communicate information to the tenants. After each general meeting Landlords should review minutes of the meeting to review changes made to the rules and bylaws. If they are changed or new ones added, Landlords have the obligation to provide the changed rules and bylaws to their tenants. When changes have occurred Landlords should have tenants sign a document identifying they have received the new or changed rules and bylaws.
Properly completing the “Notice of Tenant's Responsibilities” protects both the landlord and the tenant by clearly explaining the expectations of both parties during the tenancy.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Rental Application fees
Searching for a tenant takes time and effort to find the right people for your property.
First you must advertise your property and show it to prospective applicants. Prospects will submit an application and Landlords will need to check references, perform credit checks and determine if the applicant is suitable for the property. All of this work takes time, and some Landlords want to charge a fee for this time.
Part two section 15 of the Residential Tenancy Act in BC prohibits Landlords from requiring a deposit or charging a fee for accepting or processing the rental application, investigating an applicant's suitability or accepting the tenant. What this means is a Landlord is not entitled to be directly compensated for these efforts. Rent for the property will need to cover these anticipated costs for Landlords. I have seen some Landlords state the fee will be added to the rent or deposit when the tenancy is accepted, this is inappropriate and not in accordance with the Residential Tenancy Act.
Asking a potential tenant to provide an amount of money could deter quality tenants from applying because they are informed of the law. Landlords could find themselves in a Residential Tenancy Board hearing if an applicant submitted their application fee, then wasn’t selected to rent the unit.
Being a Landlord is equivalent to owning a business. If you owned a retail store, restaurant or other business and required potential employees to pay a fee for submitting their application you would limit your choice significantly. Quality employees would look elsewhere and your business wouldn’t perform as you would expect. Requesting a fee for the application to rent would provide the same results, and a tenancy that wasn’t what you expected.
Landlords should take the appropriate time to thoroughly investigate each applicant's suitability for renting their property, in a manner which is in accordance with the Residential Tenancy Act. Failure to adhere to Tenancy Laws in BC often creates issues between Landlords and Tenants.
Looking for Property Management you can find more information about us at: www.cartrefproperties.com
Empty Homes Tax Declaration
What is the empty homes tax? The City of Vancouver brought in the empty homes tax to help eliminate homes that were sitting empty and not being used, by the owner or by other parties. Owners who live in their property, or rent them out for at least 6 months of the year will not have to pay the tax as long as they make the annual declaration the property was occupied.
If you are renting a property located in the City of Vancouver you are required to declare if your property was rented by February 2, 2022. There is no reason to wait if you know your property wasn’t empty. Follow the link below to the declaration page and instructions on how to declare.
Failure to declare can result in a tax being assessed to your property in the amount of 3% of the assessed value of the property. With the value of real estate in Vancouver this can be a significant penalty to any homeowner. Additionally, the city may apply a fine for failing to declare the empty home tax.
https://vancouver.ca/home-property-development/declare-property-status.aspx
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
