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.

Landlord’s Guide: How to Recognize Tenant Red Flags

tenant-red-flags
tenant-red-flags

Out of all the tools of the trade, one of the most important skills a landlord must have is recognizing tenant red flags. Think of these as warning signs that could lead to problems with a tenant. 

Of course, that does not mean that a renter without red flags will always be the perfect tenant. Or that every renter with warning signals could be a problem tenant. In a recent Toronto ruling, for example, a tenant was convicted on three counts of fraud. He was notorious for showing up dressed well and with references, but when it came time to pay his rent he refused.

Eviction doesn’t just affect tenants. Head over to our eviction calculator to see how much it can cost you. This all goes to say that knowing the red flags can be invaluable. We’ll discuss some of the most important ways to uncover tenant red flags below. Let’s get going!

Singlekey’s 4 Ways to Discover Tenant Red Flags

1) Ask for Tenant Details (and Get Them on Record!)

Whenever you meet a prospective tenant, you should give them a rental application that covers the basics. This includes:

        • Current Address
        • Employer
        • Monthly Income
        • 3-5 Years of Residence History

It’s a good idea to follow up with their current employer and landlord to double-check that the information is valid. If the information doesn’t line up, that’s a red flag. Consider an unstable work history, lack of steady income, or reports of property damage as huge red flags as well.

Also, if you learn that the tenant was troublesome and bothered other renters in their last residence, that should set off your alarm bells. One unruly tenant can lead to fewer renters and less income.

2) Always Perform a Credit and Background Check

A credit check can reveal a tenant’s bad financial habits — and a big risk on your end. A poor credit score suggests an inability to pay bills or living above their means. 

But you don’t have to spend the time and effort to vet tenants manually. With SingleKey’s credit and background check, you can process tenant screening in minutes. The report also includes metrics that make it easier to understand the information Equifax reports on.

Our credit and background check reveals a wealth of information about tenants, such as:

        • Records of rent payments
        • Previous or ongoing collections
        • Bankruptcies
        • Past-due accounts

None of this information will give you a definitive answer about the tenant in question. But they will reveal some of the most important red flags you’ll encounter.

3) Never Rush to Fill a Vacancy

When it comes to renting, taking one’s time is a necessity for owners and tenants. When you rush to fill a vacancy, you can overlook the tenant evaluation. That’s not a wise decision. Screening tenants is a crucial step in the renting process.

Generally, renters start to look for apartments six to eight weeks before their moving date. If a tenant wants to move in right away, that could be an indication of upheaval, confusion, and lack of thought and planning in their lifestyle. This behavior can be a red flag for landlords who want a dependable and reliable tenant – and one who gives proper notice.

Similarly, if tenants indicate that they move frequently, they could turn out not to be ideal as a long-term tenant. Of course, they could have legitimate – even urgent – reasons for relocation. A single red flag shouldn’t be considered a black mark on their record. It does mean, however, that you should be on the lookout for other red flags, just in case.

4) Trust Your Gut

We’ve talked about how red flags can show up on paper through credit checks and employment history. But landlords can also make observations from interaction with the tenant – either in person, online, or during a phone conversation. 

If they are late for a viewing or careless about answering texts or emails – you guessed it – red flag. Of course, the savviest landlords avoid the extra stress and time required to vet tenants. Instead, they choose professionals like Singlekey to handle tenant screening.

Our Tenant Red Flag Rundown

Okay, so we’ve gone through lots of potential red flags. Here are some questions to ask as you decide on a tenant.

Key Takeaways

  • Does the applicant’s basic information match your research?
  • Do previous landlords or employers speak highly of them?
  • Does the credit and background check seem healthy?
  • Are they willing to move in at a reasonable time and date?
  • Do I feel good about the applicant in general?

Spotting Tenant Red Flags Easily with Singlekey

By following the steps above, we know you’ll have more success with tenants. But when it comes to property management, nothing is ever certain.

That’s why we set up the Singlekey Rent Guarantee. Signing up means you’ll get paid every month, no matter what happens to your tenant’s financial situation. You can find out how it works here.

What Should Landlords Look for in A Tenant Credit Report?

how to read a credit report for landlords

Being a landlord in today’s rental market requires diligence and experience. To avoid leasing their units to risky tenants, most landlords rely on tenant credit checks — it’s a foundational part of the tenant screening process. While these checks are very insightful, even seasoned landlords can overlook important information.

SingleKey offers a great way for landlords to screen tenants via our Tenant Credit & Background Check. We have helped landlords across Canada screen and verify thousands of prospective tenants, providing them with insights to help them make renting risk-free and hassle-free. To help landlords learn how to read the SingleKey tenant screening report, we’ll review the top 5 tenant credit check metrics.

how to read a credit report for landlords

Don’t forget to check out our sample tenant credit check report. We’ll be using it as a reference throughout this article.

How to Read a Credit Report for Landlords: 5 Key Tips

  1. Learn the Difference Between Poor, Good, and Great Credit Scores

The first risk indicator landlords typically review is the credit score. SingleKey uses an Equifax ER 2.0 score to create an accurate picture of the tenant’s financial health. A credit score is a useful metric encompassing the entire spectrum of a prospective tenant’s financial standing, including: 

      • Payment Behavior
      • Debt 
      • Income
      • Outstanding Debt
      • Late Payments

The average Canadian has a credit score of 630. So tenants with a score ranging from 600 to 700 are considered to have an average score. When reviewing rental applicants with a score below 600, landlords may want to look more carefully. A credit score below 500 is likely due to poor payment behaviour or a recent bankruptcy, indicating the riskiest applicants. 

tenant credit report for landlords

While a low credit score doesn’t mean that a tenant will be delinquent on rent, we can safely make the assumption that a tenant who doesn’t pay their bills on time is more likely to not pay their rent on time.

  1. Identify the Types of Debt the Tenant Owes

Another key piece of information on our tenant credit reports is debt. While large amounts of any debt aren’t a great sign, it’s important to understand that not all debt is created equally.

High-Interest Debt

landlord-tenant-credit-checks

Credit cards and risky loan options, such as payday loans, are high-risk debt because of their higher interest rates. Also, payday loans are often the last resort for borrowers and can indicate the tenant may be going through financial hardship.

Low-Interest Debt

On the other hand, debt categories like mortgages and HELOCs (Home Equity Lines of Credit) are significantly less risky because of the lower interest rates and the asset securing the loan. Also, individuals can rent out their property to cover the mortgage payment. 

Student debt and car payments are forms of debt that aren’t as risky as credit cards or payday loan debt. What is important here is whether the applicant has been able to make regular payments.

  1. Tally Up the Total Monthly Debt Payments

Credit reports outline the number of regular payments that a person has to pay towards items such as an auto loan, credit card, or cell phone. It is important to review these monthly payments because they show the portion of the applicant’s income going towards recurring expenses and bills.

For example, in SingleKey’s sample credit report, the “Payment Term Amount” shows how much money is to be paid, while the “Narrative” explains the frequency of payments.

tenant monthly debt payments

To give you a real-world example, if the applicant’s pre-tax income is $3000 per month but they have to pay $1000 towards their credit card and car loan payments every month, this doesn’t leave much behind to cover rent and living expenses.

  1. Calculate the Rent-to-Income Ratio

It’s important to know if the tenant can actually afford the expense of renting a unit. A landlord should consider how the tenant’s monthly income compares to how much they will have to pay for monthly rent. To simplify the process, SingleKey’s tenant credit report calculates the rent-to-income ratio so you won’t have to worry about it.

Looking at the tenant’s rent-to-income ratio gives you a good sense of affordability. If they make $3000 per month, but are applying for a unit where the rent is $2000 per month — that’s a red flag.  

We also suggest going one step further and using the (rent + debt payments) to income ratio. With this formula, both their monthly debt payments and their rent are used to get a better grasp on how much they can really afford. 

Our data shows affordability is one of the top predictors of tenant rent default. If a tenant is spending more than 50% of their income on rent, there won’t be much left to save for a rainy day. In this scenario,unexpected expenses or job loss would cause the tenant to stop paying rent.

  1. Focus on Collections and Bankruptcies

Collection items and bankruptcy demonstrate financial responsibility, and remain on a credit report for 6 years and have a significant impact on credit scores. Collections and bankruptcy can happen, but it’s important to ask the right questions when you see them on a tenant’s credit report.

1. What was the amount owing?

The amount owing is an important factor in determining how detrimental the outstanding payment is to the applicant.

2. How old is the default?

In cases where a bankruptcy occurred 5 years ago, that is not nearly as important as when the bankruptcy is fresh. The older the bankruptcy, the less financial strain the applicant is under. 

3. What type of debt was it?

If a collections item is for a payday loan, that is much more worrisome than if it was an outstanding phone bill.

Collection items and bankruptcy demonstrate financial responsibility, and remain on a credit report for 6 years and have a significant impact on credit scores. Collections and bankruptcy can happen, but it’s important to ask the right questions when you see them on a tenant’s credit report.

KEY TAKEAWAYS

The 5 Things Landlords Should Look Out for on a Tenant Credit Check

  1. Credit Score
  2. Amount of Debt and Type of Debt
  3. Monthly Debt Payments
  4. Rent-to-Income Ratio
  5. Collections and Bankruptcy

Find the Right Applicant with Single Key’s Tenant Credit Report

Being smart with your tenant screening process keeps your renting risk-free. A good tenant will not only have a stable income, but they’ll have a reassuring financial history. Keeping in mind the 5 key risk indicators in this guide will help you get the most out of your tenant credit report and raise any red flags that you should be aware of. 

If you are looking for the best tool to screen your tenants, consider the SingleKey Tenant Credit and Background Check report. The five metrics we just reviewed are at the top of every report. 

Don’t forget that we also offer a free tenant review call to help walk you through the tenant report results, so book a call with us any time.

Want to Learn How to Choose Better Tenants? Watch SingleKey’s Viler Lika Explain How with REIN

how-to-find-better-tenants-landlord-tips-video

Want tenant tips from some of Canada’s leading landlord and real estate experts? This past February, the Real Estate Investment Network’s (REIN) JG Francoeur and Patrick Francy sat down with our founder Viler Lika to talk about how SingleKey helps small everyday Canadian landlords better manage their rental properties by choosing the right tenants in order to reduce delinquency risk right at the start.

In the interview, we dive into the real costs of evicting tenants, and how SingleKey can really help landlords across Canada deal with one of the most stressful and costly experiences of their landlord journey. Francoeur and Francy bring up some good points as well. They ask how SingleKey determines the worthiness of a prospective tenant and why we never decline tenants based on credit score alone.

Some of the questions we answer in the interview are:

  1. What sort of expenses does home insurance not cover?

  1. How can SingleKey’s Rent Guarantee help you cover eviction expenses?

  1. Are the best tenants always the ones with the best credit scores?

  1. How detailed should you be with a tenant’s references?

The video also includes a detailed rundown of SingleKey Tenant Credit Check and Background Check. Viler explains how landlords can use the information they find here to find the best tenants and to support the gut feeling they may have about a prospective tenant. The tenant screening report goes far beyond a simple credit report. If you’ve been interested in seeing our comprehensive tenant credit and background check in action, this is a great time to see it explained in detail.

You can watch the entire video on Facebook Live below.

REIN is a news and resource company that helps thousands of Canadians protect their investments and better prepares them for navigating the challenges of managing a rental property. They offer Canadians unbiased real estate education and advice through webinars, a membership program, and a free weekly podcast called “The Everday Millionaire.” REIN has been featured on CNN, The Globe and Mail, and CTV Canada.

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

cost of evictions in Canada
cost of evictions in Canada

Delinquent tenants are arguably the biggest risk a landlord faces when they decide to invest in rental property. While landlords try their best to screen for good tenants to keep their rental income secure, sometimes the unexpected can still happen. Landlords still have to deal with evictions when they end up with delinquent tenants who may not pay their rent or may even damage the property.

So how do landlords evict tenants in Canada? What does the eviction process look like and how much does it actually cost to remove a delinquent tenant?

When calculating the cost of evicting a tenant, Canadian landlords need to keep three things in mind:

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

Statutory delays are periods of time that a landlord must wait before they can apply to their provincial tribunal or court to remove a tenant. This set number of days differs in each province.

The purpose of these additional wait times is to give tenants the opportunity to pay any outstanding rent owed to a landlord. If the set number of days passes, the landlord can then apply for an eviction order on the grounds of 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 are the length of time between the issuing of the notice to the tenant or filing with the provincial tribunal, to when an arbitrator issues a decision. These numbers include any delays in scheduling a hearing date, and any delays in the arbitration proceedings including the amount of time it takes to release a decision.

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

Following the eviction decision from the court, landlords need to also account for the time it’ll take to hire a sheriff to enforce an order of possession or court order to remove a non-paying tenant and allow a landlord to re-possess his unit.

How long does a sheriff take to evict a tenant?

In every province except for Ontario, it takes between 1-6 days for the sheriff to enforce an eviction. However, in Ontario, due to the backlog of cases in the LTB there is also a high demand for sheriffs to enforce evictions. Therefore, following the issuing of an order to allow a landlord to regain possession of the unit, and following the statutory waiting period of 11 days to allow the tenant to move out of the unit, if the tenant does not leave, it takes an average of 30 days more for an Ontario landlord to hire a sheriff to uphold the eviction order.

This statistic is one of the key reasons why the process of carrying out an eviction in Ontario is longer than any other province. While we see the average across the country is only 4 days, in Ontario this process takes approximately 8 times longer than in the rest of Canada.

How Long Does the Eviction Process Take in Total?

It takes between 2 weeks to 3 months to remove a delinquent tenant (depending on what province you reside in). The province with the longest procedural delays during an eviction is Ontario and the province that has the shortest delays is Saskatchewan.

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

You can calculate the total amount of rent a landlord expects to lose while going through the eviction process using this 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 when faced with a delinquent tenant, it is important to consider what the monthly average monthly rent and utilities are in each province:

On top of not receiving rent for multiple months, a landlord can expect to spend an additional 1 extra month to post ads, screen, and sign a lease with a new tenant. This does not include any time spent repairing any possible damages to the property by the delinquent tenant.

This lost income also does not include extra costs such as legal expenses, court fees, etc that may be incurred during eviction proceedings.

The average landlord renting a 1-bedroom unit can expect to lose between $2,000 to $4,000 worth of rent while going through the eviction process. In Ontario, landlords are subject to much higher losses as Ontario landlords can expect to lose $9,000 in rent! This is due to the lengthy eviction process in Ontario (3 to 5 month) combined with the higher avg. rent prices.

B. Eviction Legal Costs

In addition to the rental income that landlords lose during the process of evicting a tenant, they also spend thousands of dollars in legal costs.

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 behalf of a landlord. Paralegals will file relevant paperwork, handle the eviction hearing and any other negotiations that may be necessary throughout the process.

Legal Costs For Eviction in Canada

In British Columbia, Alberta, Saskatchewan and Manitoba, the average landlord spends between $700- $800 to hire a paralegal to carry out the eviction process. 

However, in New Brunswick, Nova Scotia, PEI, and Newfoundland, the average landlord spends approximately $400 – $500 on legal expenses over the course of an eviction.

Unsurprisingly, Ontario and Quebec are the most expensive provinces in relation to hiring 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 are the payment to be made to the court or a tribunal in order to file a claim or order to evict a tenant. Generally, the average spend for court applications is between $50 to $100. Ontario, once again, remains as the outlier as the cost to file an application with the LTB for eviction is $175 (nearly twice as much as the next most expensive province).

Sheriff Fees

The cost of hiring a sheriff to enforce an order to remove a tenant widely varies across Canada. The average amount ranges between $100 – $200. In Ontario, due to the high demand for sheriffs, a landlord must also spend approximately $400 before a tenant is removed by a sheriff. On the other hand, landlords in Newfoundland, PEI, and New Brunswick pay a measly $50 – $75 for the same service.

C. Estimated Property Damage Costs

Lost rental income is one of the scariest expenses that a landlord can face. The only thing that can make a landlord’s job harder is when a delinquent tenant damages their property before vacating the unit.

In Canada, 1 in 6 eviction cases includes a claim for compensation for damages to the unit in addition to lost rent. The average landlord claims between $1,500 to $3,500 in court against a tenant for damages caused to their unit.

Damages caused to a landlord’s unit tend to extend the waiting time and the amount of losses that a landlord suffers before they are able to find a new tenant and begin renting the unit out once again. It can take 1-2 weeks just to do simple repairs to the property. Landlords may not be able to recover the full amount of damages from the tenant in court so they may still be left with some expenses to cover out of pocket.

What is the total cost of eviction?

In all Canadian provinces, even the least expensive ones, the costs of eviction can be substantial. From the many days it takes to begin eviction proceedings to the additional months it takes to remove a tenant; landlords lose an average of 2 months (60+ days) of rental income going through the process. They also have to account for an extra 1 month of lost rental income till they find a new tenant.

The average cost shouldered by landlords across Canada is between $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?

For a landlord to protect themselves and their unit, the first step to be taken is to perform a proper tenant screening when signing a new lease.

Tenant screening services offer financial insight into the tenant’s history. Some services, like SingleKey offer a comprehensive  Tenant Credit and Background Check in Canada that includes a full credit check, as well as a background check and a social media scan. All this information comes wrapped in one report, and you can get started in just 5 minutes.

For landlords who are looking for additional peace of mind and protection for their unit, products such as the SingleKey Rent Guarantee program offer just that. The SingleKey Rent Guarantee Program protects landlords from losing rental income by guaranteeing up to $60,000 worth of coverage.

Best Practices for Finding Good Tenants

landlord tips for rental tenant screening and finding good tenants
landlord tips for rental tenant screening and finding good tenants

Finding good tenants could really save you a lot of headaches. Paid rent, no damage, complaints and  even more time for family and friends. It is always worth investing the extra time and effort to find a good tenant.

Although it may seem like a complicated process, it comes down to 2 things:

1) Having interested applicants to choose from 

2) Screening for the best applicants

This step-by-step article will focus on helping you put your best foot forward when marketing your rental listing.

Best Practices for Finding Good Tenants

Step 1: Say Cheese! Start with Great Photos

That’s right, take photos that people want to see. Landlords and property managers need to learn how to take good rental photos.

The purpose of these photos is to intrigue people to come and check out your rental property. In the rental market you are competing against similar listings and your unit’s photos are the first opportunity to make a good impression.

Your rental’s photos should provide a complete view of your unit. Make sure to showcase the appearance and size of your property. Angles are important. Be strategic with how you take your property’s pictures to really display the space and layout in the rental unit.

Make sure that your rental property is cleaned and ready to be rented. No one will be interested in a household with dirty laundry on the floor and paint that is already peeling off the walls.

 

Once the rental unit looks great, take photos with bright lighting, ideally during a sunny day, and consider having all the lights on.

landlord tips for finding good tenants

 

By helping your potential applicants know what to expect, it will usually be the most interested tenants that come to the viewing and provide their information.

Step 2: List Your Unit on the Top Rental Sites

Around 43 million Americans and 4.4 million Canadians live in rental housing. This means that there will always be people looking for a place to live, especially in urban areas. 

It is your goal now to get as much exposure as possible to your listing in order to find qualified tenants who are ready to move in. 

Here are some of the best free rental listings sites to advertise your property:

When working on your rental advertisement, follow this format for greater traction.

        • Attention-grabbing headline
        • Highlights of your property (Size, bedrooms, bathrooms, etc.)
        • Location (approximate/intersection)
        • Detailed description of your rules, fees and any other important information

When posting your rental’s photos, make sure to include a description of your property and your expectations. This will separate the interested viewers from the not so interested ones. 

Step 3: Pre-Screen Tenants and Schedule a Viewing

After hearing back from interested applicants, let all of the candidates know that you will be holding viewings on a specified date (preferably weekends). This saves time and is more efficient than having daily viewings.

Before inviting a rental applicant to a viewing, make sure to ask a few pre-screening questions, to avoid wasting time on tenants who will not qualify. Some key questions you should ask from the get-go are:

        • Their monthly income (to determine affordability)
        • Their credit scores (to estimate risk)
        • Their preferred move-in date (to save time)

Keep in mind, a lot of the time the viewing is the moment where the tenant decides whether or not they would like to rent out your property. With that said, make sure to:

        • See that the appliances are working in order as well as light bulbs, doors, etc.
        • Remove unnecessary furniture and items for a more spacious look.
        • Air out the unit with some fresh air before your showing.
        • If necessary, repaint the walls of the property.

COVID Alert! Virtual Tours

Note that in many regions, viewings are now done online due to COVID. Many landlords are doing Virtual Tours via video calls so that they can walk through and show the unit while chatting with the prospective tenant and answering their questions in real time. 

Step 4: Follow the Fair Housing Act

The law states that you can not discriminate against a wide array of people and behaviors. This means that questions regarding certain subjects must not be asked, including:

        • Origin
        • Religion
        • Gender
        • Race and Colour
        • Disabilities
        • Marital status

As a landlord you are responsible to follow this act and can face serious penalties if you do not. 

Also keep in mind that by discriminating against certain people, you may be missing out on a great tenant.

Step 5: Rental Application Form and References

Knowing exactly what to include in a rental application form can be difficult. Without the right information on the form, the application can make your decision challenging.

For this reason we included a list of the most important things to ask for.

  • Applicant information:
        • Personal Information (Name, Address, Date of Birth, Contact Info)
        • Credit Score
        • Pets
        • Smoking
        • Employment/Occupation/Income
        • ID/Driver’s License
  • Consent for Credit Check: Running a Tenant Background & Credit Check in Canada has become standard practice when renting, and most tenants will expect it. So, make sure to have a consent clause in your rental application form.
  • Proof of Income: In the form of recent pay stubs, employment letters or bank statements. This is critical to ensure employment and sufficient income to pay the rent.
  • Employment References: Asking for the applicant’s employment history and a reference from their manager will give you an idea of whether or not they are stable.
  • Previous Rental History: More often than not applicants will have previous history that you can learn from. By asking for this information and contacting the previous landlord you can ask about rent payments as well as the condition of their home.

    By having this information about the applicants, you will generally have a great understanding of their tendencies and whether you would like them to live in your property.  

    More importantly, rental applications will make it clear what type of applicants you should generally decline.

You may still receive applicants that do not meet all of your qualifications, but they can explain why they still proceeded with the application if this was the case.

Step 6: Do Not Settle!

Finding a worthy tenant is not an easy task, and if you do not feel confident about your applicants, there is no need to move forward with them.

Rental Property Landlords Tenant screening services

Finding good tenants is a marathon not a race. Invest the time and effort to find good tenants because it will save you a lot of stress and headaches that can result from dealing with a problematic tenant. Sometimes it may be worth losing a month of rent due to a vacancy to take the time to find the right tenant.

Evicting a delinquent tenant can cost a landlord thousands of dollars in lost rent, damages and legal fees – as well as significant time and stress. If you want to avoid these headaches and have complete peace of mind, consider enrolling in a Rent Guarantee Program.

Goodluck, and happy renting!

How to Screen for Great Tenants

“It’s none of your business what my credit score is!!” How’s that for a start?

Tenants that are soon to live in your property can come in all types : good, bad, really bad. This is why you should do your due diligence before renting out your unit.

If it sounds stressful, don’t worry!

Luckily, we’ve put together a step-by-step guide to screen for great tenants and included some tips along the way. 

1. Looks are Deceiving, A Credit Report is Not

After narrowing down your potential tenants to a short list, it is time to select the best one.

A credit report reveals a detailed breakdown of an applicant’s credit history. Credit bureaus are responsible for collecting financial information and a credit report is a great tool to get this info.

An individual’s prior financial history is a good indication of what they will do in the future. Chances are that if someone consistently pays their bills on time, they are most likely to pay their rent on time as well.   

Here is what to look out for in an Equifax credit report: 

    1. Personal Information – such as tenant’s name, address, date of birth and employment information. Make sure that this information matches the info on rental application.
    2. Payment Behavior – how often the applicant is late on their debt payments. Poor payment behaviour will be reflected in the credit score. 
    3. Credit Accounts Information –  the types of accounts, when they were created, the limits and amounts for these accounts as well as payment history.
    4. Debt Type and Amount – The debt amount is not the only important factor, mortgage debt is much safer than credit card debt and as the interest rate will be much lower.
    5. Type of Inquiry –  hard credit bureau inquiries can negatively impact the tenant’s credit score if done too often, soft inquiries do not. A tenant credit check is a soft inquiry.
    6. Public Records and Collections – from public court records such as bankruptcies, collections files, convictions and sometimes past eviction judgements.

2. No Income, No Rent

Credit check looks good? Awesome! 

But how often has your tenant switched jobs and addresses? If the answer is “often”, there is a chance you may have an unexpected vacancy in the near future.

These tenants may have the risk of losing their income and not being able to cover rent.

Another thing to consider is that individuals who work for a salary usually have a safer way to make money rather than those who depend on self-employment or freelance contracts. 

So what should you do? 

Always check the tenant’s source of income, check its reliability and compare it to the required rent payments. Alongside their income, double check their prior addresses and employment history to make sure they’ll be able to pay rent on time.

Not only this, but find out the amount of debt your prospective tenant has, and the monthly interest they are paying. This is important because if your tenant is paying $1000 or more in debt payments, they may not be able to afford the rent.

This credit report will tell you exactly what their total monthly debt payments are.

Tenant rent to income ratio screening tenants credit check

Quick Tip

Create a rent-to-income ratio. Take your prospective tenant’s monthly rent and divide it by their monthly household income. If the rent is over 30% of their income, recognize they are more likely to be delinquent.

An ideal candidate should have additional income to cover the rent payments in the case of unexpected expenses. 

If your tenant has been consistently changing addresses and jobs, be wary of them doing the same with you.

3. Run a Background Check

A background check is used to investigate a candidate’s history. It generally includes employment, education, criminal records, credit history, motor vehicle and license record checks. 

So how do I run a background check? 

It’s easy! All you need is:

  1. Tenant’s Full Name
  2. Driber’s license or Social Security Number (both optional)
  3. Date of Birth
  4. Current Address

4. Contact the Previous Landlord

The more information, the better. See if it is possible to contact the former landlord. Chances are the previous landlords will happily share their experience with your prospective tenant. They will relate to and understand your questions and will be inclined to help a fellow landlord.   By reaching out, you would be surprised by what you can find out!  While respecting the landlord’s time and not being too pushy, you should look to acquire more insights on the prospective tenant. Here are some sample questions that you can ask the former landlord:
  • Has the tenant paid you all the rent?
  • Does the tenant pay on time?
  • Has the tenant caused damage to your property?
  • Were they respectful towards the neighbors?
  • Would you rent out your property to this tenant again? 

Quick Tip

It is always better to try and contact more than one landlord in case they are just trying to get rid of their past tenant.

5. Join a Facebook Group

Have a question stuck on your mind but don’t know who to ask? Join a Facebook group of landlords from your province. 

Members of these groups share stories about their experiences and will provide advice that can help you with your current situation.

They will also often share information amongst the group about delinquent tenants and it might save you hours of figuring that out on your own. 

The Facebook admins assist with all questions relating to the Residential Tenancies Act and will help answer your questions!

Landlord Facebook Groups Across Canada

6. Interview the tenant

Have you taken all the steps to screen for a great tenant? Well, it still might not be enough. You can spend weeks screening a tenant but sometimes your instincts are the best judgement. 

Think of the screening as weeding through the candidates that you certainly do not want living in your property.

Quick Tip

When hiring a realtor, their objective is usually to find a tenant in the shortest amount of time. So you might end up with an average tenant rather than a great tenant, which may result in problems over time.

After thoroughly screening your prospective tenant and confirming they’re good on paper, talking to them over a cup of coffee might be the best screening of all.

“Talk to them? About what?” 

Well, first things first, ask about what you want to find out. You should ask about their past renting experience, and see if their story aligns to their references and feedback from past landlords. 

An easy way to start up that conversation is by saying “I know how difficult landlords can be when it comes to their property. How was your past relationship with the landlord?”

You might just find out that they’re in court right now for an eviction.

Final Word

As a landlord, you cannot rely on the paperwork alone to carry out a tenant background search. You have to be creative and willing to engage with tenants on a personal level. Conversations can help you better understand the way your tenants relate to others and how they handle conflict, all of which are essential to achieve the best tenant screening.

Following these 6 steps will minimize the risk involved in renting your unit. Investing in proper tenant screening pays off down the road. With SingleKey, you can get a comprehensive tenant screening report in minutes, including a background check, credit report, employment history, past addresses and evictions, and criminal record.

Offering You The Key To Living Stress-Free!

Singlekey tenant landlord relationship
Singkey is here to help with landlord's biggest challenges - finding a right tenant and managing risks.

Welcome to the Single-Key Blog! We look forward to providing you with educational and entertaining reading experiences on a regular basis. Be sure to keep checking out our blog section as we will endeavour to give you timely updates about the world of landlords and tenants.

To be a bit more specific, our blog will provide landlords with ample information that will help for their jobs to be a lot easier. Suggestions about how to develop and maintain strong relationships with your tenants and solutions for receiving rent money on time will be abound in our blog.

However, this blog is for renters too! For great tips and advice about such topics as how to locate the perfect rental property or how to manage monthly rent payments, be sure to make this blog one of your favourite go-to places on the internet!

So, what exactly does Single-Key do for landlords?

We offer a unique service that guarantees that you will be paid your rent money on time each and every month. At Single-Key, we understand that the entire rent collection process can be a gruelling one. We’re sure that you’re quite used to hearing a wide range of reasons, from your tenants, as to why they may not have their rent payments by their due dates. Our services remove that headache from your life for good!

Attain the peace of mind you’re looking for by enlisting our services. For a monthly fee, we not only ensure that you receive timely payments from each of your tenants but we also professionally manage eviction situations. You’re likely to agree that the only thing more frustrating than having to hunt down tenants for rent money is having to serve them with eviction notices. When you register with Single-Key, evictions become our responsibility.

What does Single-Key do for tenants?

If you’re a renter, don’t assume that we’re out to get you. In fact, it’s quite the opposite. We’re here to help you! As much as we understand how frustrating it can be for landlords to have to hunt down their rent money, we know that, for you, securing rent money can sometimes be difficult.

Tough times are bound to pop up. People from all walks of life experience hardships such as job losses, unexpected car repairs, injuries that prevent the ability to go to work, deaths in the family and so on. Not only will there be times when money needs to be spent elsewhere or is simply hard to come by, but you’ll also experience moments when paying the rent just simply isn’t your top priority.

At Single-Key, we take the stress out of the entire “paying the rent on time” dilemma. If your landlord is a Single-Key customer, we offer you payment flexibility. That means that you will have some leeway with your rent due dates. If necessary, our services will enable you to postpone your rent for up to a month. In addition, you will be given the option of paying your rent with either cheque or Interac.

And here’s the best part – it costs you nothing! Monthly fees are paid for by landlords. For more information about how Single-Key is the key for landlords and their tenants to live stress-free, please don’t hesitate to give us a call at 1-877-978-1404 or email us at info@singlekey.com.

What Is The Hardest Part About Being A Landlord?

the hardest part of being a landlord
What is the hardest part about being a landlord? Find out!

A landlord’s work is never done. Or, at least, it seems that way to the majority of individuals who hold the title of landlord. While it is often heralded as a rewarding occupation (many people love owning various properties for the purpose of profit), the landlord position is certainly not one that is without hardships. But what is the hardest part about being a landlord?

Many will tell you that it’s the non-stop ringing of the phone.

In most cases, the “phone is ringing off the hook” scenario is one that conveys that business is booming. In a landlord’s case, it may just mean that, as well. A ringing phone can signify a potential renter calling to look at the property. But, most often, the phone calls are complaints. On BiggerPockets.com, Kevin Perk tops his list of things he hates most about being a landlord with the inundation of phone calls he receives.

“When you become a landlord, your phone begins to ring,” he details, “Sometimes that can be good; other times it can be bad. Good or bad, there comes a time when you’ll be ready to throw your phone in the river because it never seems to stop ringing. Prospective tenants call looking to rent an apartment. Current tenants call to tell you something is broken, that they will be late with their rent or to complain about something else. There is always someone calling.”

Others will say that it’s the carrying of a mortgage.

Renters aren’t the only ones who are required to make monthly payments. Quite obviously, landlords – a.k.a. property owners – have monthly payments of their own to make. And, in many cases, they have several properties to pay for. Paying the mortgage is a monthly obligation that can often be a tough task. This is especially true if there is difficulty with collecting rent from tenants on a timely basis.

On ClubThrifty.com, Greg Johnson lists carrying a mortgage at the top of his “Being A Landlord – The Bad” list. “Don’t run out and finance a rental house just yet!” he advises, “Borrowing on a rental house means some fairly major risk for you. If your renter doesn’t pay, is late, or the property is empty, you still have to pay that mortgage bill every month. Before making the leap, be sure you’ve got the money to cover the costs for a few months if needed.”

Most will complain about having to collect the rent each month.

Depending on how many tenants you have living in your property, monthly rent collection can be an intimidating duty. Hopefully, the majority of your tenants are the types who promptly pay their rents without having to be constantly reminded. However, nearly every landlord has experienced altercations with tenants who list numerous excuses as to why they don’t have enough money to pay their rents by their due dates.

At Single-Key, we sympathize with this dilemma. In fact, we understand the difficulties that are presented on both sides. This is why we offer a service that provides both landlords and tenants with great peace of mind. For landlords, we take over the responsibility of collecting rent from your tenants! As a result, you are guaranteed to receive all of your rent money on time, each and every month.

For tenants, we make it a lot easier for you to pay your rent if your landlord is a Single-Key customer! We offer payment flexibility that includes allowing you a choice to pay with either cheque or Interac. And we also allow you to postpone your rent for a month, if absolutely necessary.

For more information about SingleKey’s Rent Guarantee, please don’t hesitate to give us a call at 416-518-3489 or email us at contact@single-key.com.