You will periodically find yourself needing expert tenancy law advice. You could ask your provincial rental authority for guidance, but government institutions are often overwhelmed with inquiries and do not always provide quick answers.
Also, you must keep current with changes to residential tenancy law. Simply put, it’ll cost you if you don’t. In 2004, for instance, British Columbia’s Residential Tenancy Act changed to require landlords to complete a move-in/move-out inspection report with their tenant. Landlords oblivious to the change were subsequently shocked to learn that failing to complete the move-in/move-out inspection report caused them to lose their right to retain any portion of the security deposit even if the property was obviously damaged by the existing tenant.
It is not the provincial government’s responsibility to provide you with a notice of change, and ignorance of the law is never an acceptable excuse. What’s a landlord to do? Even if you own only one rental unit, you should join a landlord association in your province. Not all associations are equal. The best ones offer the following services at low or no additional cost beyond the annual membership fee.
Access to a legal information hot line
Most landlord associations offer members a number to call for prompt tenancy law information. As well, the landlord association might offer insights that the provincial rental authority staff does not. Knowing the written legislation is one thing, but knowing how it works in practice is another. When you ask your landlord association for help, you receive advice from real landlords who can show you how to make the law work to your benefit.
Access to landlord-friendly rental forms relevant to your province
Provincial tenancy laws differ, and forms useful in one province may be ineffective in another. Landlord associations may offer landlord-friendly rental agreements relevant to the provinces they represent: move-in/ move-out inspection checklists, rental application forms, and so on. Access to these forms alone is often worth the membership fee.
Access to credit information
A good landlord association will offer convenient and speedy credit check services and will typically do so for a fee lower than what is charged by most commercial credit check brokers. Obtaining a prospective tenant’s credit history is an essential part of tenant screening.
Access to a “bad tenant” database
In addition to credit information, many landlord associations maintain a growing list of tenants that association members have had to evict for cause or non-payment of rent.
Whenever a landlord association performs a credit check for you, the association’s bad tenant list is cross-checked as well. This information can be invaluable for obvious reasons.
Furthermore, if your tenant knows that you are a member of an association that maintains a bad-tenant list (you’ll make him or her aware with a well-written warning letter should trouble arise), this knowledge will deter your tenant from leaving you with an unpaid rental bill.
Workshops, seminars, and newsletters regarding current events in property management
Most landlord associations offer courses, seminars, and workshops designed to educate its members on being successful landlords. These courses are a great way to network with fellow landlords while learning the latest in property management.
Generally speaking, membership in a landlord association also means access to a newsletter. This newsletter is your early warning system for new changes to tenancy laws in your area. While many landlords were caught off guard by the changes to the BC Residential Tenancy Act in 2004 mentioned earlier, members of landlord associations were prepared well in advance.
Political clout
If you join a landlord association, you become part of a unified voice representing thousands of landlords in your province. Many landlord associations dedicate significant time to lobbying their provincial government and influencing legislative changes to tenancy laws.
I only have one rental property (in my basement). Do I really have to join a landlord association?
While this book will give you a great start, there is no book that can adequately prepare you for every detail of your property management needs. For those situations where the going gets rough, you would do well to turn to a landlord association for help. Whether you’ve been landlording for two years or ten, in my opinion, membership in a landlord association is not optional. It is essential.
Check the downloadable forms kit that came with this book for a landlord association in your province.
Chapter 5
INSURANCE
In this chapter, you will learn to:
• Obtain adequate liability insurance for your property; ensure your policy covers all liabilities before you rent it out.
• Advise a potential tenant to purchase rental insurance upon moving into your property. Make it a term of the rental agreement that he or she does so.
• Prohibit items that have the potential to cause serious property damage (such as a barbeque, aquarium, or waterbed) unless rental insurance is obtained. Make this a term in your rental agreement.
• Never mislead an insurer about the use or intended use of property; doing so will invalidate any future insurance claim.
Types of Insurance
It’s critical that you check to see if you are exposed to liabilities not covered by your standard homeowner’s insurance policy when you rent out property, including your secondary suites.
The need for insurance is shared between the landlord and tenant. You insure the interior finishing (kitchen cabinetry, flooring, etc.) against damage by fire or flood, for instance, while it is the tenant’s responsibility to purchase a rental insurance policy that protects personal possessions. Many tenants mistakenly believe it is a simple matter of claiming against the landlord if their possessions are lost or damaged due to fire or water damage, theft, etc.
At the time of application, the tenant should be told to purchase rental insurance. Understandably, many landlords are uncomfortable accepting an applicant who is unwilling to purchase insurance for his or her own possessions. In particular, your tenant should be prohibited from using barbeques, aquariums, water beds or any other items that have potential to cause serious property damage unless rental insurance is obtained. Make this a term in your rental agreement.
Liability Insurance
Even before you advertise your property for rent, you must obtain adequate liability insurance for the property. Companies recommended by your landlord association will have the experience with rental property that you need.
The agent should be willing to spend time researching the right plan for you. If you only have a few properties, your insurance agent may set up a plan as an extension of your own home insurance package. This is cost effective and less complex than separate insurance plans designed for medium and large real estate operations.
Ethical landlording tip: Never mislead an insurer about the use or intended use of a property. Your insurance company must be made aware if your home contains a secondary suite, for instance. Any short-term benefit of lower insurance premiums will be obliterated if a claim is filed and the insurance company finds out (and it will find out) it has been misled about