Why Should Landlords Require Tenant Insurance?

tenant insurance blog
tenant insurance blog

Owning and managing rental properties is no walk in the park. From consistent upkeep of buildings and units to managing rental payments, the last thing any landlord wants is the headache that comes with unexpected damage and repair costs unintentionally caused by a tenant. So, how exactly can landlords avoid these kinds of pricey accidents? The answer is simple: tenant insurance!

Although tenant insurance is widely known as being useful, there are still many misconceptions held by renters when it comes to its importance. The first is that many believe their landlord will cover them in the event of an accident, the second is they believe it’s too expensive, and the third is that they don’t believe their possessions are worth a lot. As a landlord, you probably know these misconceptions aren’t entirely true!

With that said, let’s dive into how making tenant insurance a requirement in your building can protect you as a landlord, and how you can encourage your tenants to get covered!

What is tenant insurance?

Tenant insurance, also known as renter’s insurance or content insurance, is designed to cover those who rent your property. It helps ensure that your tenant’s belongings and your property are protected from your tenant’s liability; thus, reducing the risk exposure associated with your tenants.

How much does tenant insurance cost?

Tenant insurance can cost as little as $12 a month, depending on your tenant’s credit history and previous insurance claims. Insurance prices vary according to the type of coverage, contents limits, and deductibles. There’s a plan to suit every budget!

What does tenant insurance cover?

At the minimum, a basic tenant insurance policy should cover the following:

  1. Additional living expenses

This is money your tenant can use to pay for the additional cost of alternate accommodations if their unit is uninhabitable due to extensive damage (a claim/covered loss). For example, if there was a fire at your property and your tenants are forced to move out to an Airbnb for a few weeks during repairs, additional living expenses coverage is designed to cover the costs. 

  1. Personal liability

Imagine your tenant accidentally causes damage to their unit and you, or your insurance company after having paid for your claim, seek to recover the cost of repairs that they are responsible for. Their liability policy is designed to cover the portion of the repair costs they’re responsible for, that way, they can avoid paying out of pocket. This part of a tenant insurance policy also applies to the damage they may have caused to another tenant’s property, along with injuries they may have caused to another.

  1. Contents coverage

Let’s say your tenant’s apartment was broken into while they were out for the day, and everything from their new bike to their flat-screen television was stolen. Contents coverage is money your tenants can use to replace their stuff in the event it gets stolen or damaged.

How can you encourage tenants to get covered?

An obstacle many landlords face is their tenants resisting or questioning the need for tenant insurance. Their reasons can vary from thinking it’s too expensive or that their possessions aren’t worth insuring; but with costs being as little as $12 a month, it can be easily factored into most tenants’ budgets.

With that price in mind, tenant insurance really isn’t a large expense at all, and could very well be one of the lower monthly payments tenants would make. After factoring in the cost to replace all the items in a tenant’s home (think furniture, electronics, clothes), accommodation fees if they can’t stay at home for a few nights because of damage (think hotel room/Airbnb, food, toiletries) and the amount you could be responsible to pay if your tenant accidentally causes damage to the building or injures somebody, $12 is chump change!

If you’re looking for a few simple steps to help you get started on encouraging your tenants to get covered, here’s what we recommend: 

    1. Make it required. Depending on what province you’re in (ie. Ontario), you may have the right to legally require it as part of the lease agreement.
    2. Make it easy. Include information about the benefits of tenant insurance and where to get it in your leasing package. Here’s a downloadable one-pager from our friends at Duuo.
    3. Partner with an insurance provider to get your tenants a preferred partner discount.

Our final thoughts

Tenant insurance provides landlords with the ability to manage the risks that come with renting. Unintentional damage caused by tenants can, for lack of better words, really be a bummer. By making insurance a requirement, you’d be able to better avoid costly accidents and have the ultimate protection needed for tenants that live in your rental properties. 

Making tenant insurance a requirement doesn’t need to mean more paperwork for you. SingleKey has partnered with Duuo to provide your tenants with easy access to affordable coverage. Within our SingleKey products, your tenants are guided straight to it, making it an easy and obvious part of the leasing process.

A Landlord’s Guide to Rental Verification

Landlord’s Guide to Tenant Rental Verification
Landlord’s Guide to Tenant Rental Verification

Rental verification is a crucial part of the screening process. Landlords don’t want tenants who have historically caused problems for other landlords to be occupying their property. It is important for landlords to take the extra time to dive into a prospective tenant’s rental history to ensure that they are ideal candidates for a tenant.

What is rental verification?

Rental verification is the process by which a landlord gathers and authenticates their prospective tenant’s rental history. This gives landlords the opportunity to converse with their applicant’s previous landlords to learn more about their experience with their tenants.

A rental history report would include a list of previous addresses of the tenant along with the contact information of their previous landlords. It’s important to take the time to personally call and communicate with previous landlords and verify the accuracy of the rental application, while also getting greater insight into the tenant’s previous landlord interactions.

How to verify a tenant’s rental history

Step 1: Determine Personal Expectations

Before screening prospective renters, it is important for landlords to determine realistic criteria and expectations of their tenants. Landlords must personify their ideal tenant and what they deem acceptable from a tenant’s rental history.

Some questions to ask yourself before screening tenants include:

    • Will you accept a tenant who has a history of late payments? 
    • Will you accept a tenant who has a criminal history?
    • Will you accept a tenant who doesn’t have rental history?

Step 2: Request Tenant Application

When landlords find prospective tenants, one of the tenant’s first steps is to complete a rental application. Landlords must remember to obtain consent to run a background and credit check and collect personal information from the prospective tenant.

Remember: Rental history is a tenant’s private information, so it is unethical to contact their previous landlords without getting consent.

Step 3: Contact Landlord References

During this stage of the rental history verification process, landlords would reach out to their prospective tenant’s previous landlords to ask for their experience of renting to the tenant.

Some questions to ask the prospective tenant’s previous landlord include:

    • Why is/did the tenant’s leave your rental property?
    • How long did the tenant live at your rental property?
    • Confirm rental amount and payment history
    • Overall experience renting to the tenant
    • Did the tenant give proper notice before leaving the property?
    • Have they received any complaints about the tenant from the neighbours?
    • How well did the tenant communicate rental needs (e.g., maintenance, rent delays, etc.)?

Step 4: Confirming Details with Tenant

After speaking with the tenant’s landlord references, landlords can then compare the information provided by the tenant with the details shared by the previous landlord. Landlords will now have a better understanding of how ideal the prospective tenant is and if they would like to proceed with renting the property to them.

What if the tenant doesn’t have any rental history?

In some cases, prospective tenants may not have any rental history. Although they would not have any landlord references, first-time renters can provide documents to prove that they’re in good financial standing and are capable of keeping up with their rent payments. 

First-time renters can provide the following documents to prove strong financial health:

    • Proof of Income
    • Credit Report

Find the right renter, every time

Rental verification helps landlords make the right decisions when choosing who to rent to. A tenant’s rental history and landlord references can provide an accurate forecast of how the tenant will behave in the future. Landlords must perform their due diligence to ensure the prospective tenant is the right fit for their rental.

SingleKey’s Tenant Report allows landlords to require previous landlord references from their prospective tenants. When requested, previous landlords can answer a short survey as part of the Tenant Report Process to help guide the screening process.

Renting To Pet-Owners: Provincial Laws You Need To Know

Provincial Laws On Renting To Pet-Owners
Provincial Laws On Renting To Pet-Owners

Each provincial Residential Tenancy Act sets out the rules and regulations governing residential renting for landlords and tenants. The rights of landlords regarding renting to pet owners differ across Canada.

Renting To Tenants With Pets: Regulations By Province

Landlords may include a “no pet” clause and refuse to rent to pet owners. British Columbia allows landlords to prohibit or restrict the size, kind, or number of pets they allow a tenant to have on the residential property.

Landlords may require an additional refundable pet deposit for tenants who own pets. The landlord can ask for a pet deposit, provided that the amount, including any other security deposits, does not exceed ½ of one month’s rent. Service animals cannot require a pet deposit.

Terms respecting pets and pet damage deposits

18   (1) A tenancy agreement may include terms or conditions doing either or both of the following:

  • prohibiting pets, or restricting the size, kind or number of pets a tenant may keep on the residential property;
  • governing a tenant’s obligations in respect of keeping a pet on the residential property.

(2) If, after January 1, 2004, a landlord permits a tenant to keep a pet on the residential property, the landlord may require the tenant to pay a pet damage deposit in accordance with sections 19 [limits on amount of deposits] and 20 [landlord prohibitions respecting deposits].

(3)This section is subject to the Guide Dog and Service Dog Act.

In Alberta, landlords can enforce “no pet” clauses and refuse to rent to pet owners if included in the lease agreement. They also have the right to decide what kinds of pets, size, breeds and number of allowed pets.

Pet deposits and fees are allowed. Any pet fees should be a reasonable amount. Any refundable pet deposit amount plus the security deposit amount must not exceed one month’s rent.

No fees or deposits can be imposed on service animals in Alberta. Landlords who discriminate against an applicant with a service dog can be found guilty of an offence under the Service Dogs Act and the Blind Persons’ Act and can be fined up to $3,000.

If a tenant commits a substantial breach, the landlord can apply to the RTDRS or Court to end the tenancy or give the tenant at least 14-days’ notice to end the tenancy. A tenant must receive the notice at least 14 clear days before the tenancy ends.

Landlords in Saskatchewan can refuse rent to pet owners and include “no pet” clauses in their lease agreements. Pets are otherwise welcomed if not stated.

If the landlord allows pets, they can legally request additional charges to the tenants. Landlords can request a one-time pet fee or a monthly fee, or both, which are all non-refundable. A landlord can also require a refundable pet deposit, yet the amount must not exceed one month’s rent, including other security damage deposits. For service animals, these fees cannot be charged.

In Manitoba, landlords can refuse to rent to tenants with pets and enforce “no pet” provisions with eviction, provided they give written notice. Landlords can also set general guidelines on the kinds of pets allowed.

Landlords can request a pet deposit for tenants who own pets. A pet deposit cannot exceed one month’s rent in addition to other security deposits. Treated like a damage deposit, the landlord may claim the deposit for any damage or cleaning cost caused by the pet.

Pet damage deposit

29.1(1) A landlord who gives a tenant permission to have a pet in a rental unit on or after June 30, 2010, may require a tenant to pay a pet damage deposit.

Transitional — deposit not more than 1/2 of one month’s rent

29.1(2.1) If, during the period from June 30, 2010, to the day immediately before this subsection comes into force, a landlord required a tenant to pay a pet damage deposit, the deposit must not be more than the equivalent of 1/2 of one month’s rent payable under the tenancy agreement.

You can find pet deposit requirements for Manitoba here: https://web2.gov.mb.ca/laws/statutes/ccsm/r119e.php#29.1(4) 

No landlord can request a security pet deposit for a service animal as defined in The Human Rights Code.

Exception — service animals

29.1(3) A landlord shall not require a tenant who relies on a service animal as defined in The Human Rights Code to pay a pet damage deposit in respect of that animal.

Ontario landlords are legally allowed to refuse to rent to pet owners. Yet once the rental agreement is signed, a landlord cannot evict a tenant for owning a pet.

The Residential Tenancy Act includes a provision stating that all conditions in a tenancy agreement that prohibit the presence of animals in or about the residential complex are void (2006, c. 17 s. 14). This is provided that the pet is not causing damages, disturbances, allergic reactions to other tenants or is a breed that is deemed to be inherently dangerous.

“No pet” provisions void

14 A provision in a tenancy agreement prohibiting the presence of animals in or about the residential complex is void.  2006, c. 17, s. 14.

It is illegal for a landlord to ask for a pet deposit in Ontario. However, the landlord can accept the deposit if a tenant offers and cannot exceed one month’s rent. Since service animals are not considered pets, any additional fees or requirements do not apply.

Landlords have options to issue eviction notices if the tenants’ pets are causing reasonable damages and nuisances. Suppose the tenant’s dog caused extensive damage to rugs by defecating and urinating. Landlords can serve an N5 based on damages if they provide details of the damages and at least two estimates for the repairs. The tenant will have seven days to rectify the damages by paying the amount required or fixing the damages themselves. If not resolved, the landlord can file an application with the Landlord and Tenant Board.

Quebec landlords may refuse to rent to tenants with pets or implement restrictions on what pets are allowed. If there is any failure to respect provisions in the lease, landlords may apply to the Administrative Housing Tribunal for an order to cancel the lease.

Quebec has no official policy in place regarding pet deposits. No additional fees or pet deposits can be charged for service animals.

In New Brunswick, landlords may refuse tenants based on owning pets and enforce “no pet” restrictions, leading to eviction. Landlords cannot discriminate against tenants with service animals or charge additional fees.

Landlords are not permitted an additional deposit for pets.

In Nova Scotia, landlords have the right to include pet restriction clauses in the leases. 

Under The Service Dog Act, discriminating against a person who requires a service dog can get a fine of up to $3,000.

It is illegal for a landlord to charge an additional pet deposit.

Landlords in P.E.I. may enforce a “no pet” clause or implement restrictions on the type or size of pet allowed. Landlords cannot refuse to rent to applicants who require a service animal.

Pet deposits are illegal for a landlord to request.

Landlords may refuse to rent to tenants with pets and include “no pet” clauses in the lease agreement.

Landlords cannot discriminate against applicants who require service animals or charge additional fees or deposits. 

It is illegal for landlords in Newfoundland and Labrador to charge a pet deposit.

The Landlord and Tenant Act for the Yukon does not cover this particular issue. Yukon landlords cannot discriminate against people with disabilities that require a service animal.

Landlords can enforce “no pet” policies. A landlord cannot refuse rent to applicants who have a service animal.

A pet deposit can be charged, and the amount cannot exceed 50% of one month’s rent.

Landlords may refuse to rent to pets and enforce “no pet” clauses for private rentals. Landlords cannot discriminate against those with disabilities requiring a service animal.

The Residential Tenancy Act does not cover pet deposits, but security damage deposits can not exceed one month’s rent.

Exceptions in Canada

Nationwide, condominiums have their own by-laws and policies in place. It may not be up to the landlord to make the decision regarding having pets on the property. Ensure you read all rules and regulations regarding pet ownership at your condominium.

Renting to tenants with dogs in British Columbia is vastly different from renting to pets in Ontario, and landlords should review the rules and regulations that apply to them. Balancing these rules with the benefits of renting to pets (LINK: to other pet article above) will enable landlords to make informed decisions on renting to pets across Canada.

Always Screen Tenants With Pets

Our tenant pre-screenings with credit and background checks allow tenants to provide landlords with descriptions and photos of their pets. Order your Tenant Report today to learn more about who is moving into your rental.

Why You Should Make Your Rental Pet-Friendly (and How)

Pet-Friendly Rental Renting With Pets Landlord Tips
Pet-Friendly Rental Renting With Pets Landlord Tips

Despite the difficulties of finding pet-friendly rentals, almost one million Canadians have welcomed their first pet to their family during the pandemic. Unfortunately, landlords who refuse pets have become one of the most common reasons for Canadians to surrender their pets to shelters.

When done right, creating a pet-friendly rental does not have to come with damages and stress. Plus, fewer families will have to choose between their beloved pets and a place to live. There can be many benefits to renting to pet owners, and each provincial Residential Tenancy Act lays out the rights and restrictions available to landlords.

If you’re a landlord considering renting to pets in your rental properties, here are some benefits, tips and provincial regulations on renting with pet owners.

What Are The Benefits Of Renting To Pet Owners?

Create higher demand with a larger pool of tenants

Pet-friendly rentals aren’t widely available, and many landlords legally can and will refuse to rent to pet owners. Advertising your rental as pet-friendly can significantly increase potential tenant interest and shorter time on the market.

Attract long-term tenants

Since it can be hard to move places with pets for several reasons, most tenants will be more likely to renew a lease.

Attract responsible tenants

Owning pets isn’t cheap. In Canada, pet owners can expect to pay $3,724 yearly for a dog and $2,500 for a cat. Responsible pet owners tend to be accountable tenants, and if they take care of their pets, it gives reason to believe they will also take care of the rental. Since pet-friendly rentals are not easy to find, it provides more incentive to respect the property.

Additional rent and deposits

While it is illegal for a landlord to charge a “pet rent” in Canada, having a pet-friendly rental can allow landlords to ask for a higher amount of rent.

Depending on the provincial regulations, landlords can impose additional pet fees, either a one-time payment or a monthly fee or both. If stated in the provincial Residential Tenancy Act, landlords can also request an additional refundable pet damage deposit.

Tips For Renting To Pet Owners

Before Seeking Tenants

Pet-proof your rental

Ensuring your rental property is appropriate to host a pet might be the best bet to save yourself from more wear and tear damages in the future. Consider replacing the carpet in busy rooms with flooring like hardwood or tile, which are easier to clean and disinfect.

Tenants may also bring their own area rugs or mats to provide protection from wear and tear. When deciding on new paint colours for the walls, make sure to purchase easy-to-wash paints like high gloss finishes.

Comply with your provincial Residential Tenancy Act

Each province and territory in Canada has a Residential Tenancy Act, which lays out the rights and responsibilities of both landlords and tenants. While deciding whether or not to allow pets into your rental, it’s essential to understand what the law states in your province.

Most of the provincial Residential Tenancy Acts cover the landlord’s rights to refuse tenants based on having pets, enforce a no-pet policy within a lease agreement, and request pet deposits or pet fees.

Decide what pets you’re willing to allow

If your province allows landlords to impose restrictions on the types of pets, consider what pets would be appropriate in your rental unit. It’s perfectly fine to be picky with the kind of animals you’re comfortable renting to.

Landlords should research pets and breeds best-suited to the type of unit they own. For example, some of the best dog breeds for small condos and apartments are Boston terriers, bulldogs, and pugs.

Some provinces don’t allow landlords to choose how many pets a tenant can have in a household. If it’s not stated in the Residential Tenancy Act, contact your city or municipality to check for local by-laws.

Include a pet policy in your lease

If you decide to rent to pet owners, it’s important to include a pet policy within your lease agreement. A pet policy should go over your expectations for pet care and obligations, liabilities, and enforcements for the tenants if they own pets. The policy should lay out all rules the landlord wishes to have regarding renting to tenants with pets.

Ensure the pet policy follows your province’s Residential Tenancy Act, or it may not be enforceable. Sample pet addendums for rental agreements can be found on the Humane Society’s website.

While Screening Tenants With Pets

Ask for proper identification, licenses, and vaccinations

Requiring valid identification, licenses, and vaccinations allows landlords to ensure everything is up to date and gives the notion of applicants being responsible pet owners and possible tenants. Pet licensing regulations can be found in your city municipal by-laws.

Require that all dogs/cats be neutered

Most responsible pet owners will have their pets neutered as it’s typically vet-recommended. Studies show having pets neutered helps cut down on potential messes and improves the general attitudes of pets.

Landlord references

It’s always recommended to seek previous landlord references when screening tenants. Especially when screening tenants with pets, speaking with their current landlords may be a great way to understand the pet itself better and any incidents that may have occurred.

Questions you may ask previous landlords include:

    • Does the previous landlord consider the tenant a responsible tenant and pet owner?
    • Were the pets well behaved and well cared for?
    • Did any other tenants or neighbours complain about the tenant’s pet?
    • Did the tenant’s pet cause damage to the property in any way?

Tenant insurance

Some policies may cover damages caused by pets within their liability coverage. If the tenant’s dog bites and injures a person, the insurance company may cover that situation. If the tenant’s pet causes extensive property damage and the landlord sues for damages, the insurance may cover the cost.

Requiring tenants to have coverage over liability can help landlords recover damages caused by the pets.

Pet damages deposits

In some provinces, landlords have the right to request a refundable pet damage deposit used to cover any damages caused by the pet. If no damages occur other than normal wear and tear, the landlord must refund the deposit at the end of the tenancy.

It is legal for a landlord to request a non-refundable pet fee either upfront, monthly, or both in certain provinces. These fees are to cover either maintenance or other potential future costs.

Interview pets with tenants

Meeting the tenant’s pet before making a decision could give a landlord better insight into the general characteristics of the pet.

Consider some questions to ask the tenant regarding their pet:

    • How long have you had your pets?
    • How often will your pet be left alone, and for how long?
    • How often do you walk/exercise your dog? Will you have a dog sitter/walker?
    • Do you have someone to care for the pet while you’re away?
    • Are there any known behavioral or medical issues, and what’s the current treatment?
    • Are your pets housebroken?
    • How well does your pet get along with strangers?

While Renting And At The End Of The Tenancy

Perform annual property review

It’s always best to check for yourself if any damage has been caused by pets. In cases of extensive damage, landlords can recover the costs or file an eviction order.

If you refuse to allow pets in your rentals, it can be a good idea to follow up that there are no breaches of the lease agreement. If so, in provinces that allow the enforcement of “no pet” provisions, the landlord may take action to request the pet be removed from the rental unit, or the tenant can face eviction.

Evicting a tenant due to their pet

If the provincial act allows “no pet” provisions, a landlord can take action upon tenants who have pets in the rental unit. Landlords must give proper written notice of eviction for a breach of the lease agreement and provide reasonable time for the tenants to remove the pet from the property. If the tenants do not remove their pets from the property, the landlord can proceed with the eviction process.

In provinces such as Ontario, “no pet” provisions are void and not enforceable, even if included in the lease agreement, and the landlord cannot evict tenants for having pets. However, this is only provided that the pet is not causing damages, disturbances, allergic reactions to other tenants, or a breed inherently dangerous, which could all be a reason for a landlord to evict. If a tenant’s pet caused extensive damages to the rental unit, the landlord could serve an N5 based on damages.

Returning or claiming the refundable pet deposit

If the provincial Residential Tenancy Act allows landlords to charge a refundable pet deposit, both the landlord and tenant should inspect the property for damages at the end of the tenancy. The pet deposit can only be used to cover the damages caused by the tenant’s pet.

If the damages exceed the deposit amount, the landlord may claim the rest against the security damage deposit or the tenant if damages exceed both amounts.

Once the tenancy ends, the landlord must refund any unclaimed amount from the pet deposit to the tenant. Deadlines for the landlord’s time to return the deposit can be found in your provincial Residential Tenancy Act.

Rent To Pet-Owners With Ease

Pet-friendly rentals don’t have to be a burden on the landlord. There are many benefits to renting to pet owners, from having more applications to receiving more rent.

Following our tips on renting to pet owners could help you manage your pet-friendly rental without the stress of excessive damages and liability. With over half of Canadian households owning a pet, it may be time for more landlords to consider welcoming their tenants’ furry friends.

Quickly Screen Tenants With Pets

Our tenant pre-screenings with credit and background checks allow tenants to provide landlords with descriptions and photos of their pets. Order your Tenant Report today and learn more about who’s moving into your rental.

How to collect from a tenant for property damage?

Rent Collection Process N2 Form

How to collect from a tenant for property damage?

The Residential Tenancies Act 2006 (RTA) outlines that certain landlord and tenant disputes are to be handled by the Landlord Tenant Board (LTB). Following the enactment of Bill 184, it is within the LTB’s jurisdiction to hear cases where landlords claim that tenants have damaged their rental unit. Applications must be submitted to the LTB within one year from the date that the tenant vacates the unit. This article outlines the process in a few easy steps.

01

Filing an L2 application
to get started

Rent Collection Process N2 Form

01

To start, where a tenant causes damage to a landlord’s rental unit and has moved out, the landlord can complete and file an L2 Application with the LTB.  The LTB will then process the L2 Application set a hearing date and time.  Currently, these hearings and being held virtually (by video or telephone).

Once the LTB sets a hearing date and time, the LTB will email or mail a Notice of Hearing to the landlord and then the landlord is required to serve a copy of the Notice or Hearing and L2 Application on each of the tenants named in the L2 Application.  In cases where the landlord does not have the tenant’s address information, there are other methods to serving the tenant such as calling the employer to confirm their employment or searching the Ministry of Transportation using the tenant’s driver’s license to find their current residence.  It is recommended that landlords have or find an address for their former tenant or tenants before filing their L2 Application because landlords may not have much time between getting the Notice of Hearing and the hearing date and time.

In addition to the Notice of Hearing and L2 Application, a landlord must also serve each of the tenants with a complete copy of any evidence (videos, pictures, estimates, receipts, etc.) they intend to use at least 7 days before the hearing. 

02

Hearing process

02

During the hearing, both parties will have the opportunity to present evidence to a neutral Member (an Adjudicator). Following the hearing, both parties can expect to receive a written decision, otherwise known as an Order, from the LTB.

03

Collecting payment
following a judgement

Rent Collection Process N2 Form

03

Once the LTB releases an “Order” for the tenant to pay, landlords can collect the outstanding amount and enforce the LTB’s Order by filing the Order along with Garnishment(s) or other processes (for example, a Notice of Examination, Writ of Seizure and Sale) with the Small Claims Court office closest to where the former tenant resides. A Notice of Garnishment is made against the tenant’s employer or bank branch where the tenant has active accounts. In such cases, where the tenant is found to owe money to a landlord, Notice of Garnishment requests that the tenant employer or bank transfer the money to the court and the court pays the landlord.  Alternatively, and in the case of a Notice of Examination, this process can be used to compel a former tenant against which an Order has been made, to come to Court and answer questions regarding the former tenant’s assets, income, banking, etc.  The information obtained during an Examination can be used for subsequent Garnishments and Writs of Seizure and Sale.

It is important to note that where the tenant is not employed but receives social assistance, a landlord cannot generally garnish this form of income to pay their Order. Alternatively, landlords do have the right to engage a collections agency as a method of collecting the outstanding amounts owing under an Order.

In certain cases, it can be beneficial to seek out additional legal assistance to deal with this process. In circumstances where the tenant owes between $1,000 – $2,000 of damages, it might not be worth hiring a paralegal to reclaim these expenses as the paralegal fees start at about $900. Where the damages are worth 4-5k of damages, seeking additional assistance becomes more profitable. 

Credit for this article to: Thomas Schoenleber, Licensed Paralegal. Reach out to Thomas at Sterling Paralegal for your paralegal needs.

http://sterlingparalegal.ca

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What Are The Requirements For A Legal Basement Apartment In Canada?

legal basement apartment requirements
legal basement apartment requirements

Do you have a sizable basement in your home? Has it been finished – complete with furnishings, appliances, and washrooms? 

If your basement apartment has its own separate entrance, furnishings, and a washroom, you’re in luck!  You have an opportunity to become a landlord and earn some significant extra income. 

According to a recent Canada Mortgage and Housing Corporation (CMHC) study, over 15% of houses in Toronto have basement units. They also found that most city policies make it easier to create basement apartments than second-floor or laneway homes. 

But what are the requirements for a legal basement apartment in Canada? In our article below, we’ll walk you step by step through the process of setting up a legal basement apartment in Canada.

What are the first steps to legally renting out your basement apartment?

Without adhering to these basic legal requirements, a basement apartment can present a risk, not just to its occupants, but to the community at large. In order to ensure your second unit is ready for a tenant, it must comply with the following:

        • Fire codes
        • Building codes
        • Electrical Safety Authority Regulations
        • Zoning and housing standards by-laws

Also, all utility connections and building renovations must be legal and safe. You also want to consider such factors as the excess garbage your home will be producing. 

There are also other factors you may not have considered. For example, is there enough space on your driveway for your tenant to park his/her car? If not, is parking on the street overnight legal in your neighbourhood?

The 13 Basic Requirements for a Legal Basement Apartment

 Now that we’ve covered the basics, it’s time to go in-depth. Below, you’ll find all thirteen of the basic requirements you’ll need to cover to rent out a basement apartment legally in Canada. Remember, some of your province’s specific requirements may be different. So check with your municipality before conducting any work on your home.

1. To legalize a basement apartment in a detached or semi-detached house, the property must be at least five years old.

2. The front of the house cannot be significantly altered in order to change its appearance from being a one-unit building.

3. The basement apartment must be smaller than the main dwelling unit above it.

4. The minimum ceiling height must 6’5″. The ceiling must also be continuous. Suspended (T-bar type) ceilings and exposed joists are not acceptable. As well, furnace room ceilings must be either dry-walled or plastered.

5. All doors in the basement dwelling must be solid wood or metal. They must each have a minimum thickness of 1.75″. Interior doors must have a half-inch gap at the bottoms to provide air movement within the basement apartment. Exceptions can only be made if return air ducts are installed in the room. Exterior doors must be at least 32″ x 78″. The smallest dimension of windows is 18″ and their opening must be at least 600 square inches. As well, all windows must be within three feet of the ground. If there is a window well, it must extend three feet from the house wall to allow room to crawl out.

6. All bathrooms must have either windows or fans.

7. The kitchen must be equipped with a refrigerator and a well-functioning stove. The cupboards must have a capacity of no less than four cubic feet multiplied by the total number of persons occupying the unit.

8. All new basement apartments require building permits before construction can start. You may be required to have an additional parking space on the premises for your tenant, depending on your area. However, if the upper unit has a parking space, it is mandatory for the basement apartment to have a parking spot as well.

9. The owner of the property is responsible for ensuring the installment of all smoke alarms. They must be installed in each dwelling unit on every floor including those with bedrooms or sleeping areas. The alarms must be audible in bedrooms when the bedroom doors are closed. The property owner is also required to install carbon monoxide detectors. They must be provided and maintained in each dwelling unit if the building contains a fuel-fired appliance or an attached garage.

10. An electrical inspection must be conducted. Any and all deficiencies that are identified during the inspection must be addressed. Once the inspection is completed, the property owner must retain the letter of compliance. That way, it can be made available to a chief fire official if requested.

11. A continuous fire separation with a minimum Fire Resistance Rating of 30 is required between dwelling units and between dwelling units and other areas. A lower Fire Resistance Rating may be acceptable with the provision of interconnected smoke alarms or sprinkler protection.

12. A single means of escape is required in the event of a fire. Two means of escape are required if the one means of escape is through another dwelling unit.

13. A source of soundproofing is needed between the dwelling units. The minimum sound transmission class rating is STC 50.

Need Some Help Renting Out Your Basement Apartment? Singlekey can Help

Sound like a lot of work? While some of the codes and rules may take a little longer than others to implement, the benefits can be huge. In June of 2021, the average rent for a 1-bedroom basement apartment in Canada was $1216. That extra income can have a big impact on your monthly budget! 

If you’re looking for some help to begin legally renting your basement apartment, contact us. We have the experience and resources to help you get your apartment ready and find the right tenant.

Long Term vs. Short Term Rental: What’s Right for You?

short-term-vs-long-term-rental
short-term-vs-long-term-rental

Before you put your rental property on the market, you’ll need to decide whether you want to offer long-term or short-term rentals. To make the best decision, it’s important to not only know the difference between the two but to also realize the benefits and drawbacks of each. 

In our guide to long-term and short-term rentals, we’ll go over some of the key things landlords should consider so you can make the best choice for your property. Let’s get started.

The Pros and Cons of Short-Term vs Long-Term Rentals

What’s the Difference Between Long-Term and Short-Term Rentals?

A short-term rental is often defined as one that lasts less than 31 consecutive days. Sometimes it can last a bit longer. Short-term rentals can also be referred to as vacation rentals. That’s because many people own homes they rent out exclusively to vacationers depending on their location.

Long-term rentals are usually considered anything that lasts longer than six months. Common types of long-term rentals are apartment and house leases. Business and industrial properties are also typically long-term.

Other options can include an Airbnb-style rental. This can be done either for the short-term or long-term. Typically, these are not vacation-style rentals. They come in handy in situations when someone is in town for an extended period of time. For example, a sub-contractor on a 3-month contract may prefer Airbnb because it’s easy to send the bill to their client.

If you can’t decide whether short-term or long-term rentals are the best match for you, consider some of the advantages and disadvantages of short-term rentals below.

Short-Term Rental Pros

1) You can earn more money.

If your short-term rental property is a vacation home there is a greater potential to make more money, especially if people are renting for a week or two at a time. If your property is in a popular tourist spot, your income potential can be very high during the summer months. 

You also have the option of changing the rental amount depending on the rental week. Many property owners do this when they know there is a time of the year that is popular.

short-term-rental-pros

2) You can also use the property.

With a short-term rental, especially one that is a vacation home, there is the option for personal use. That means when you want to go on holiday or spend the weekend with the family, just reserve that block of time for yourself.

3) You can limit some of the renting risks.

Being a landlord is a big commitment. The responsibility comes with potential risks, such as tenants who don’t pay or time or damage your property. With a short-term rental, the commitment isn’t ongoing, so it’s a lot easier to manage.

Short-Term Rental Cons

1) Your income can fluctuate.

With a short-term rental there is a chance that you may have blocks of time with no rental income. Some property owners don’t mind taking this chance, while others don’t like the risk.

2) You’ll spend more on cleaning costs.

With a higher turnover rate, especially with a vacation property, you can expect more cleaning costs. Every time a tenant moves out you’ll need to have the home deep cleaned. Even with a contract, this can get pricey.

short-term-rental-cons

3) You may need to hire a Property Manager.

Because the property is rented to different tenants so frequently, the appliances, sinks, and toilets need to be checked routinely. No one is going to want to rent a home with a broken refrigerator or one that has plumbing problems. 

Some landlords choose to hire a property manager for their short-term rentals. That way, they don’t feel as though taking care of their property is another job. You have to weigh whether the cost is worth the convenience.

Long-Term Rental Pros

1. You’ll earn steady income.

When you have a property rented for a longer time, you know you’ll have a reliable source of income. This can help you be more financially secure and plan for your next investment.

2) You might see fewer maintenance fees.

Because the turnover rate is not as frequent, you should have fewer maintenance fees. You won’t have to pay a cleaning company to come in as frequently because you’ll have the same tenants for a longer amount of time.

Long-Term Rental Cons

1) You can’t raise rental prices once in contract.

When you offer a long-term rental, you need to keep the price consistent for the length of the lease. While this offers reliable income, you lose the chance to increase it for any reason until your agreement is over.

2) You will have the tenants for longer periods of time.

If you have problem tenants, you may be forced to look into eviction. No one wants to do this because it can be costly and lengthy. To find out just how costly, try our eviction calculator.  

To avoid troublesome tenants, SingleKey offers a thorough yet easy to read Credit and Background Check. Our screening report gives you the information you need to feel comfortable with who is living in your rental property.

Key Takeaways

Short-Term Rental Pros

      • Potential for big financial gains
      • You can use the property as well
      • Limit some risks of renting

Long-Term Rental Pros

    • Earn steady income
    • Fewer maintenance fees
      •  

Short-Term Rental Cons

      • Income can fluctuate month to month
      • Higher cleaning costs
      • May need to higher property manager

Long-Term Rental Cons

    • Rental rates are locked in
    • Harder to evict bad tenants

Long-Term vs Short-Term Rental: How to Decide

There’s no easy answer to choosing the type of rental property that’s best for you. Both long term and short term have their benefits and drawbacks. So it’s worth taking some time to consider where your property is located and how much time investment you’re willing to put into maintenance, cleaning, and tenant interactions. 

Whether for three months or three years, one thing is for certain: the right tenant can make all the difference. A thorough background check can help you find applicants that are perfect for your property. Book a call to learn more about SingleKey’s tenant credit report for landlords.

The New Ontario Standard Lease Agreement – 5 Things Every Landlord Should Know

New ontario lease agreement templates

The New Ontario Standard Lease Agreement – 5 Things Every Landlord Should Know

Since April 2018, a standard lease agreement template was available from the Ontario government for landlords across the province. When complete, the standard lease creates a contract between the landlord and tenant. It is also called a residential tenancy agreement.

However, this standard residential tenancy agreement in Ontario was not mandatory and could be modified and altered by landlords, and such modifications and amendments were common practice. 

In December 2020, the Ontario government released an updated standard lease agreement template to account for RTA changes that were introduced in July 2020 by Bill 184

This new standard lease will require landlords to use 15 standard clauses and limits their ability to amend, disregard and add new clauses to the contract, limiting their ability to negotiate with the tenant.

What is the point of this new Ontario
lease agreement?

The point of the new lease agreement is to prevent residential landlords from including illegal and therefore, unenforceable clauses in the standard lease agreements. The intention was to create a standard framework that both large and small landlords could use. 

The new lease template also makes things more transparent, and clearer between landlords and tenants because now, both parties will be familiar with what is in the document, where to find the total rent, what is included and excluded from the tenancy agreement. 

Additionally, the new residential tenancy agreement seeks to introduce the changes made by Bill 184

Ultimately, the new Ontario residential tenancy agreement is an attempt at levelling the playing field between landlords and tenants since there’s an otherwise unbalanced rental market due to the giant gap in negotiating powers between both parties.

5 Things to Know about the New
Ontario Standard Lease

01

Changes to the new Ontario
standard lease agreement

There are practical changes that will take effect with the new Ontario lease agreement in 2021.

Requesting a copy of the lease

The new lease agreement includes a provision that says a tenant can request a copy of the lease agreement from the landlord. If the landlord does not supply the lease agreement to the tenant within 21 days, the tenant can withhold 1 month’s rent. If the landlord does not produce it after 1 month, the tenant does not have to pay the landlord that outstanding months’ rent. Where the landlord never gives the tenant a copy of the lease agreement, the tenant can terminate the lease agreement by serving the landlord with 60 days’ notice.

No alteration

Landlords can no longer alter or change the new template. The new agreement contains 15 mandatory sections that must be included in the agreement and cannot be removed or altered in any way. The purpose of this is to prohibit landlords from making unfair changes or assigning illegal clauses that apply to the tenant.

Additional Terms Section

There is a section at the end of the lease agreement that allows landlords to attach documents with additional terms. Here landlords can add additional terms to the lease agreement but only with the tenant’s consent. It is important to note that where there is any inconsistency with the standard 14 clauses in the new lease agreement, the standard clauses will take precedence over any terms added by the landlord, which, in the case of conflict or overlap, will be viewed as illegal and therefore void. This is different from the approach seen in the previous rental agreement form because now this is the only section where landlords can add additional terms.

updated ontario lease agreement

Increased fines for landlords

As enacted by Bill 184, this new lease includes an increase in fines issued to landlords if they evict tenants unlawfully or give notices of termination in bad faith. Part D outlines the increased fines payable by landlords where landlords unlawfully evict tenants. If convicted, an individual landlord could face fines of up to $50,000.

Other changes to the Ontario rental agreement form

Along with these significant updates to the standard lease, the following is further clarified in this new form:
 
1. Landlords no longer have to serve new tenants with the “electricity consumption” form for sub-metered units.
2. Additional grounds for ending tenancy added in Part D including for landlord’s own use.
3. If a tenant rents the entire unit to a third party (e.g. Airbnb), that person is not considered a “guest” and the landlord’s permission may be required.
4. The “Post November 15, 2018” rent control exemptions are now clarified in Part I.

The most significant updates to the new Ontario standard lease agreement are:

  • Tenants can request a copy of the lease agreement from the landlord and can withhold rent if the landlord doesn’t provide it.
  • Landlords can no longer alter or modify the standard lease agreement.
  • A new “additional terms” section allows landlords to add further clauses and documents to the rental agreement, with the tenant’s consent. However, the main 15 clauses take precedence over these additional terms.
  • Increase in fines issues to landlords if they evict tenants unlawfully or give notices of termination in bad faith.

02

What properties does this new Ontario
standard lease agreement apply to?

The new lease agreement applies to all residential units in Ontario. This includes but is not restricted to condos, houses, basement units, and apartments. Those exempt from the Residential Tenancies Act are not required to use this new lease format. This includes care homes, mobile home parks, lease communities and most social housing.

03

When does the new Ontario standard lease
agreement take effect?

The new Ontario lease takes effect on March 1st, 2021

This does not mean that landlords and tenants who have already signed a lease agreement before this date are required to sign a new lease. 

Until February 28th, 2021, landlords and tenants can use the old version of the standard lease agreement and it will remain valid. However, it is important to note that any clauses in the lease agreement that are not standard clauses or are clauses that may appear to be illegal in nature, will automatically become void as of March 1st. This could mean that any clauses added within the body of the lease (and not within the “additional terms” section) could automatically become void as they would not abide by the new rules.

04

What might happen if I am not using the
new Ontario standard lease agreement?

It’s important for landlords to know that any lease agreement made prior to March 1st will be permitted to remain effective and will not automatically become void. This is good news because landlords will not be required to re-sign their already existing tenants to a new lease.

Additionally, there are no penalties given by the Residential Tenancy Act, and by extension, the LTB, for landlords who do not properly use the standard lease. However, landlords should be aware that where there is a failure to use the proper form, the tenant can possibly break a fixed-term lease early. So it’s best to start using the new standard lease template before the March 1st deadline.

05

Where can I find a copy of the new Ontario
standard lease agreement?

If you are interested in finding a copy of the new Ontario standard lease agreement that takes effect in March 1st 2021, please visit SingleKey Lease Templates to find a downloadable copy of the lease agreement.

Not ready to sign a lease yet? Put your mind at ease by screening prospects using a Tenant Report, or guaranteeing your rent.

Contact us at info@singlekey.comto learn more.

Cost of Evicting a Tenant: the Ultimate Guide for Canadian Landlords

cost of evictions in Canada
cost of evictions in Canada

One of the biggest risks you’ll face as a landlord is a tenant who doesn’t pay their rent. While you can do your best to screen for quality tenants, there’s still no guarantee of a steady flow of rent payments. Unexpected issues may arise, causing them to fall behind or outright refuse to pay.

In addition, tenants may also become a nuisance, blatantly violate the rules of the lease agreement, or cause damage to your rental property

Sometimes, negotiating a payment schedule with the tenant for past due rent or issuing a verbal or written warning can solve the problem. But, in some cases, there’s no other solution but to evict them from your property.

So how do you go about evicting a tenant in Canada? What does the process entail, and how long will it take to get the job done? And most importantly, how much will it cost you?

As a landlord in Canada, you need to keep three things in mind when calculating the cost of evicting a tenant:

A. Loss of Rental Income During Evictions

The only recourse that landlords have to deal with non-payment of rent and tenants who refuse to leave the unit is to go through the provincial tribunal or court to file for tenant eviction.

The problem is that the process of eviction in most provinces suffers mainly from long delays due to a high backlog of hearings. So it takes a long time  to carry out eviction procedures from start to finish.

The duration of the eviction process in Canada depends on three things:

Statutory Delays

A statutory delay is the length of time you must wait before requesting an eviction order through the tribunal or Court to remove a tenant. It varies from province to province.

This time frame gives the tenant a chance to pay you any outstanding rent. Once the statutory delay expires, you can apply for an eviction order based on non-payment of rent.

How long does it take to evict a tenant for non-payment of rent in each province?

In British Columbia, a landlord must issue a 10-day notice to end tenancy for unpaid rent when a landlord fails to pay rent by the agreed upon date. Within the 10 days, if the tenant fails to pay the outstanding balance of rent, a landlord must wait the respective 10 days before they can apply to the Residential Tenancy Branch to claim the lost rental income.

When a landlord wishes to remove a tenant in Alberta, the landlord is to serve the tenant with a 14- day notice to vacate the unit.

In Saskatchewan when a tenant is 15 days late to paying rent, the landlord has the right to immediately end the tenancy by serving the tenant with an eviction notice.

In Manitoba a landlord is entitled to evict a tenant 5 days after the rent is due. On the 5th day, the landlord can ask the tenant to vacate the unit and has full discretion in determining how soon the tenant should vacate the unit.

The average amount of time given to tenants to allow them to leave is between 5 and 10 additional days (this is at the discretion of the landlord as there is no guidance on this).

In Ontario, eviction proceedings take at least 25 days.

First, a landlord must issue a Termination Notice (N4 Form) when the tenant is late on rent, then they have to wait 14 days to file an application for eviction (L1 Form) with the Landlord and Tenant Board to evict the tenant.

In addition to this initial 14 days, and unlike any other province, there is also a statutory requirement that the landlord must wait an additional 11 days to allow the tenant to either pay the outstanding balance or vacate the unit before the landlord is allowed to hire a sheriff to enforce the standard order.

In Quebec, the landlord must wait 3 weeks from when the payment was initially due before filing to evict a tenant. Once a tenant is 21 days late, the landlord can then apply to the Tribunal to end the tenancy, remove the tenant, and recover the lost rent.

Following the application for eviction after 21 days, if the tenant pays the outstanding balance to the landlord before the Tribunal reaches a conclusion, then the termination of the tenancy is avoided.

In Nova Scotia, a landlord can only serve a delinquent tenant with a notice after their rent is 15 days late. Further, a landlord must wait an additional 15 days from the date the tenant is handed the eviction notice before the eviction can be carried out, totalling a minimum of 30 days of mandatory wait time before a tenant can be evicted.

In PEI, a landlord can issue a notice to evict the tenant as soon as rent is 1 day late. The tenant then has 20 days to vacate the unit. If they manage to pay the outstanding balance within 10 days, then the eviction notice is invalidated.

Similar to PEI, in New Brunswick the landlord can issue an eviction notice to a tenant as soon as rent is 1 day late. The tenant then has 15 days to vacate the unit.

In Newfoundland when a tenant is 5 days late in paying rent, a landlord will then serve a tenant with notice that the tenancy has ended, and the tenant then has 10 days to vacate the unit amounting to an average of 15 days for the entire eviction process.

Court Delays

Court delays refer to the time between issuing an eviction notice to the tenant and when the arbitrator decides on a verdict. This time frame includes delays in scheduling a hearing date and all the arbitration proceedings until a final decision is made regarding the case.

How long does it take to get an eviction court order?

In British Columbia, after a landlord files the appropriate 10-day notice to end tenancy for unpaid rent and a tenant has not paid all outstanding rent or vacated the unit, the landlord must then proceed to claim the unpaid rent amount with the provincial tribunal (the RTB).

In BC, the tribunal can take 1-2 weeks to schedule a hearing for the two parties to plead their case depending on the availability of arbitrators and their caseload. Following the end of the arbitration, the tribunal will make the final decision within 30 days of the hearing.

In Alberta, it can take as little as 5 days to as much as 48 days for a landlord to have a hearing scheduled. On average, it takes 25 days after filing a dispute to get a hearing scheduled. Following the conclusion of the hearing, it takes an additional 10 days for the arbitrator to reach a final and binding decision. Depending on the outcome of the possession order, a landlord may further need to wait between 10 to 30 days before they can regain possession of the unit.

In Saskatchewan, due to the lighter caseload, hearings are scheduled approximately 7 days from when the claim is brought the tribunal.

Manitoba’s court system adds an additional 15 days in lost time. This is because it takes approximately 12 days for the hearing to be scheduled. Following the hearing, the arbitrators release the final outcome after 3 days.

Ontario’s court delays total an average of 51 days. It takes 14 days for the provincial tribunal to schedule a hearing. When the hearing date is set, it is typically scheduled for 4-6 weeks later.

Similar to Ontario, Quebec’s tribunal system is subject to heavy delays. It can take up to 3 months in some cases for a tribunal to release a final decision. However, on average, it takes 30 days for a final and binding decision to be made.

For Nova Scotian landlords, it can take up to an additional 20 days to receive a verdict for eviction. This is a combination of delays in scheduling the hearing and waiting for a conclusion by the arbitrator to be reached. 

In PEI, the provincial tribunal prioritises eviction hearings over other landlord-tenant disputes. So hearings are scheduled between 7 – 10 days after the landlord brings forth the claim to the tribunal.

New Brunswick boasts the shortest court delay length across Canada. Landlords there face shorter wait times as it takes an average of 5 days for the court to issue their decision.

In Newfoundland, after requesting a hearing at the Residential Tenancies, there is an additional 14 day wait before the hearing is conducted. While the average length of delay is 14 days, tenants, in some cases, can have up to 18 days to file an appeal and have the case reconsidered.

Sheriff Delays

In some cases, you’ll need to hire a sheriff to enforce an Order of Possession or a Court order to remove the non-paying tenant. Naturally, this step will lengthen the eviction process.

How long does a sheriff take to evict a tenant?

In every province except Ontario, it takes between 1 and 6 days for the sheriff to enforce an eviction. 

Due to a backlog of cases in the Landlord and Tenancy Board (LTB), removing a tenant in Ontario takes much longer. As a result, you can expect to wait up to 30 days for a sheriff to uphold an eviction order. 

The delay in enforcement is one of the reasons carrying out an eviction in Ontario takes much more time than in other provinces. As the graph below illustrates, the process takes approximately eight times longer than the rest of Canada.

How Long Does the Eviction Process Take in Total?

It takes between two and three months to remove a delinquent tenant, depending on your province. Ontario has the most prolonged procedural delays in the eviction process, while Saskatchewan experiences the shortest delays.

So how much rent in total can a landlord expect to lose?

You can calculate the total amount of rent you can expect to lose during an eviction using the following formula:

TOTAL LOST RENT $ = AVG EVICTION TIME (+1 MONTH TO FIND A NEW TENANT) X AVG MONTHLY RENT $

To determine the total cost in lost rent, you’ll need to estimate the monthly average rent and utilities in your province:

Besides the loss of regular rent payments, you can expect to spend about one month posting ads, screening applications, and signing a lease with a new tenant. You may also need to include the cost of repairs to your rental unit resulting from damage done by the delinquent tenant. 

 In addition, you’ll need to tally up all the legal expenses, court fees, etc., you’re likely to incur during eviction proceedings.

The average landlord renting a 1-bedroom unit can expect to lose $2,000 to $4,000 in rent during an eviction. In Ontario, landlords are subject to much higher losses as Ontario landlords can expect to lose $9,000 in rent! The higher amount is due to the lengthy eviction process in Ontario (three to five months long) combined with the higher average rent prices.

B. Eviction Legal Costs

In addition to lost rental income during the eviction process, you may face thousands of dollars in legal expenses.

There are 3 types of legal costs:

Legal Fees

Legal expenses mainly include the cost of hiring a paralegal to deal with a case on your behalf. Paralegals will file relevant paperwork, handle the eviction hearing, and conduct negotiations that may be necessary throughout the process.

Legal Costs For Eviction in Canada

In British Columbia, Alberta, Saskatchewan and Manitoba, it costs between $700 and $800 to hire a paralegal to carry out the eviction process. 

However, in New Brunswick, Nova Scotia, PEI, and Newfoundland, the average cost ranges from $400 to $500.

Unsurprisingly, Ontario and Quebec are the most expensive provinces for legal assistance due to longer eviction processes. In Ontario, legal fees cost $2,000 on average, and in Quebec, they cost $1,000 on average.

Court Fees

Court fees cover the cost of filing a claim through a Court or a tribunal. Generally, you can expect to pay between $50 and $100.

Once again, Ontario remains the outlier, as the cost to file an eviction application with the LTB is $186.

Sheriff Fees

The cost of hiring a sheriff to enforce an eviction order varies widely across Canada. On average, you can anticipate paying $100 to $200.

In Ontario, due to the high demand for sheriffs, a landlord can spend approximately $400 to remove a delinquent tenant.

On the other hand, landlords in Newfoundland, PEI, and New Brunswick pay a measly $50 to $75 for the same service.

C. Estimated Property Damage Costs

Lost rental income is already one of the scariest expenses you can face as a landlord. But it’s much worse if the delinquent tenant causes damage to your unit before vacating it.

In Canada, 1 in 6 eviction cases includes a claim for compensation for damages to the unit on top of lost rent. The average landlord claims $1,500 and $3,500 in court against a tenant for property damage 

Damages caused by a tenant can substantially increase your financial loss following an eviction, as you must spend money on repairs. You also lose rental income over an extended period since you need more time to make the unit move-in ready for a new tenant. 

It can take 1-2 weeks to do simple repairs to the property. You may not be able to recover the total amount in damages through the court system and be forced to cover some expenses out of pocket.

What is the total cost of eviction?

The costs that come with evicting a tenant can be substantial. Over the entire eviction process, you can expect to lose about two months of rental income if you decide to end a tenancy. And this figure doesn’t include, on average, the additional month of lost income before you find a replacement tenant.

The average cost shouldered by landlords across Canada is $4,000 to $5,000 in eviction expenses. These costs can even reach $11,000 in more expensive provinces with lengthy processes, such as Ontario.

How do landlords protect their rental income and keep renting risk-free?

As a landlord, the first step you should take to protect your rental unit from delinquent tenants is to properly screen them before signing a lease agreement. A solid screening service will provide valuable insight into tenants’ financial history and background. You can then use the information to help you choose the ideal tenant.

SingleKey offers a comprehensive Tenant Credit and Background Check that includes a full credit check and a background check with a social media scan. All these vital details are packed in a single report, which you can have at your fingertips in as little as 5 minutes!

Dealing with non-paying tenants can be a financial nightmare, even more so if you need to remove them from your property. After all, you become a landlord to earn passive income, not pay a mountain of expenses! If you’re looking for peace of mind when it comes to your rental income, be sure to check out  SingleKey’s Rent Guarantee Program. By signing up, you’ll receive coverage for up $60,000 in lost rental income should your tenant fail to pay their rent.

How Bill 184 Affects Landlords in Ontario

Bill 184 – How it affects landlords in Ontario?

Bill 184 – How it affects landlords in Ontario?

Over the past few weeks, hundreds have taken to the streets of Toronto to protest against a new piece of provincial legislation, called the Protecting Tenants and Strengthening Community Housing Act or Bill 184, that many experts fear will allow landlords to evict tenants with ease and cause “increased homelessness” across Ontario. Also known as the “Mass Eviction Bill” by its opponents, the new amendment to the 2006 Residential Tenancies Act (RTA) has become a hot topic of discussion between tenants and landlords as the real effect of this bill remain in dispute over its lack of clarity.

Here is a summary of the key points that you need to know as a landlord for Bill 184:

  1. Bill 184 now allows landlords to retrospectively seek compensation from tenants who have remained in a unit longer than agreed, even after they have left. 
  2. Tenants who have been paying an improperly increased rent amount are not permitted to make a claim if they have already paid the raised rent price for 12 months. 
  3. Landlords will now receive hefty punishments where they are found to have acted in bad faith with a tenant. 
  4. Landlords will be required to include a sworn affidavit as part of their application to the LTB to terminate a tenancy. 
  5. Landlords can now negotiate repayment plans with the tenant as opposed to using the LTB to do so and can more easily evict a tenant who does not uphold this agreement.

The main opposition to the passing of Bill 184 is the tenant community. Many tenant rights activist groups are of the belief that this bill takes aim at individuals who have suffered heavily from the pandemic, the working class. This new piece of legislation has been perceived as giving landlords the power to pressure tenants to move out of a unit without any oversight by the Landlord and Tenant Board (LTB). Further, tenants are even more concerned that the bill fails to include a way for tenants to legally oppose the eviction. Ultimately, those who oppose the bill, see it as a collection of landlord favouring amendments to the Residential Tenancy Act that look to displace tenants.

One of the main focus of this bill is to deal with the backlog at the LTB by forcing tenants and landlords to cooperate. Bill 184 does provide some benefit to landlords; however, this is only because residential landlords are among the most vulnerable people affected by the pandemic and many are in need of immediate relief. 

Many landlords have tenants who can no longer make rental payments. In such cases, landlords are forced to carry the expense, resulting in thousands of dollars lost every month.   Ultimately, as a result of the unaffordable expense of affording multiple homes, these landlords are forced to offload real estate they can no longer afford to pay off outstanding mortgage payments. Bill 184 does a decent job of providing minimal liberation by allowing landlords to act more hastily and less bureaucratically. 

Below we have outlined in more detail the changes that can be expected from Bill 184 that most affect landlords: 

More power against over-holding tenants 

Under the current compensation scheme for landlords in the Residential Tenancies Act, landlords have the power to apply to the LTB to seek compensation for rental arrears from are tenants who overhold a unit. Overholding means tenants who have occupied a unit for longer than agreed upon. Landlords can also claim for damage caused to a rental unit where a tenant remains in possession of the rental unit beyond the expiry of the lease. 

Bill 184 expands this same power to allow landlords to make a claim to the LTB even after the tenant has vacated the unit. Provided that the claim is made within 12 months of the date the tenant vacates the unit, landlords can receive full compensation. Bill 184 further proposes that landlords are permitted to apply to the LTB to claim compensation (up to 12 months after the tenant has vacated the unit) from a tenant where the tenant interferes with another tenant’s ability to enjoy their rental unit and from a tenant who has not paid utilities. 

In such cases, what was once intended to be a profitable investment for a landlord, would then have become a financial nightmare. This amendment allows landlords to retrospectively claim for lost rent or unpaid utilities suffered by a landlord including compensation for not being able to have new renters occupy the unit. 

Conclusively, landlords who have lost rental income, utilities payments, or damages from overstaying tenants can now seek compensation even after the tenant has left the unit.  

New Rules for Rent Increase

According to the Residential Tenancy Act, a tenant (past or present) can file an order with the Landlord Tenant Board requiring that a landlord repay a tenant any money the landlord may have collected as a result of an improper rent increase. This means where a landlord increases the rent without serving the appropriate notice of a rent increase or increasing the rent above the appropriate amount set out by the Ontario Ministry of Housing and Municipal Affairs in the respective guidelines. This order must be filed within 12 months of the date of the illegal rent payment. 

Bill 184 adds to the current laws by stating that, where a tenant has already paid the improperly increased rent amount for a minimum of 12 consecutive months, then a tenant cannot seek reimbursement for such an improper rent increase. This new change applies so long as the tenant did not make an application to the LTB challenging the validity of that rental increase within one year from the first charge was made. 

Ultimately, landlords and prospective lenders and purchasers are given peace of mind. Rent payment amounts are no longer subject to challenge by any tenant where they have consistently been paid for a minimum of one year. 

Increased Punishment for Landlords and Corporations 

Under the current state of the law, the Landlord and Tenant Board can conclude that a landlord has acted in “bad faith” when terminating a tenancy. This includes cases where a tenancy is unfairly terminated for a landlord’s personal use, purchaser’s personal use, or for demolition, conversion or substantial renovations to the unit. Under these circumstances, a landlord can be ordered to make payment to the tenant. Pre-Bill 184, landlords could be ordered to compensate a tenant for any portion of increased rent that the former tenant has incurred or will incur from moving into a new unit for a one-year period after vacating the previous rental unit. Landlords could also be forced to pay for reasonable expenses incurred by the tenant including moving and storage. Finally, a landlord can receive an additional administrative fine of up to $35,000.

Bill 184 increases the maximum potential penalty that a landlord can suffer when acts are carried out in bad faith. This is because the bill looks to allow landlords more power to deal with removing a tenant. However, the LTB will now have the discretion to force the landlord to compensate the wronged tenant for a maximum of 12 months’ worth of missed rent where they are found to have acted in “bad faith”. 

In relation to corporations, Bill 184 looks to increase the maximum penalty that can be imposed on corporations that are found liable for breaches under the Residential Tenancies Act. These fines will be increased from a maximum of $100,000 to $250,000. 

Therefore, this increase in punishment that a landlord may suffer serves the needs of tenants as it acts as a deterrent for landlords acting unfairly. Landlords should be cautious as the new regulations subject landlords to paying a much heftier sum than what was previously imposed on landlords. This is in addition to the administrative fine that landlords may be subject to paying. 

Ending a tenancy better come with a good reason

When landlords apply to terminate a tenancy agreement, Bill 184 will require a landlord to attach a sworn affidavit outlining and explaining the reasons in detail for the termination to the LTB. This means declaring reasons for termination including, a landlord wanting to use the unit for personal use, or planned demolition, conversion or renovations to the rental unit. Additionally, the landlord is required to indicate in the affidavit whether he or she has served any notice of termination in respect of the same or another rental unit, within 2 years prior to filing the present application. 

With the new addition to the Residential Tenancies Act 2006, the LTB will be encouraged to take a landlord’s history of serving termination into account when concluding whether or not the landlord has acted in good faith. The amount of previous termination requests filed by a landlord will act as an important indicator as to whether landlords truly have sufficient and substantial reason to end a tenancy. 

The effect of deterring landlords from ending lease agreements and terminating tenancies for disingenuous reasons is to the benefit of tenants. The LTB will now have access to additional evidence to use in favour of tenants. 

This new amendment coupled with the increased fines means landlords are to be more cautious when ending tenancies. Where ending the tenancy does not align with the affidavit or is found to serve another purpose, landlords will be subject to hefty fines for acting in “bad faith”  

Bypassing the LTB

One of the biggest points of contention between the landlord and tenant communities is the proposed changes to the way landlords can address the issue of tenants not paying rent.  

Currently, disputes between landlords and tenants over rent arrears can only be addressed by the LTB. This has contributed to the extreme backlog of cases in the LTB. Pre- pandemic, eviction hearings and cases in the LTB could take an average of 3 months to be heard. 

Bill 184 aims to provide some relief, or at the very least not make the situation at the LTB worse. It allows disputes over rent between tenants and landlords to be negotiated without LTB intervention. Landlords can bypass the LTB and are encouraged to offer a repayment plan directly to tenants, something that was originally the responsibility of the LTB. For this repayment plan to be in good faith, it should be formulated following some form of discussion and negotiation with the tenant as, in theory, the plan is to the benefit of both parties. Additionally, this new change will allow landlords to claim for lost rent and remove tenants who have been withholding payment retroactively. Where the tenant refuses the repayment plan, or accepts and fails to uphold it, this constitutes sufficient grounds for the landlord to evict the tenant. 

Landlords and tenants are forced to work together to reach a solution where the landlord can expect some percentage of rent to be paid regularly, while also taking into account the difficulties that a tenant may be having to repay the rent. 

The introduction of increased compensation for tenants for evictions done in “bad faith” as discussed above, restrict landlords from imposing unfair repayment plans on tenants. Having to compensate a tenant for up to 12 months’ worth of missed rent in Ontario will cost the average residential landlord substantial financial hardship. Tenants are also given the right to appeal to the LTB where they believe their repayment plan or eviction was handled unfairly. The alternative to Bill 184, which is the current state of affairs, is for landlords to have to continue to shoulder the burden of tenants who continue to not pay rent.  

Conclusively, Bill 184 allows landlords to act with more urgency than being forced to wait in a three-month long line at the LTB. However, this solution does not protect landlords from having to shoulder thousands of dollars’ worth of lost rent as the repayment plan must be given a fair chance to work before steps can be taken to remove the tenant.  

The Current State of Bill 184

What this bill means for tenants and landlords is that, there is to be expected a drastic change to the Residential Tenancies Act that aims to force landlords and tenants to communicate, compromise and work together. 

While this new amendment to the RTA looks to provide relief for the LTB, the truth of the state of affairs at the LTB is that they face backlog and a lack of organisation that this bill fails to address. There are still many steps in between tenants not paying rent and a tenant being evicted including negotiating a payment plan and providing the tenants a chance to pay out on their repayment plan. These new amendments do not protect the average landlord from suffering thousands of dollars, and several months’ worth of missed rent. Additionally, claims for damage (on top of lost rent), brough against a tenant can still be expected to eat up landlord time and money because of the ongoing pandemic. 

As a result of the increased risk that comes with being a renter, many landlords are turning to insurance options such as SingleKey to guarantee rental income and protect landlords from delinquent tenants. The SingleKey Rent Guarantee provides landlords peace of mind knowing that they will are protected against tenants who do not pay the rent and who may damage their property.