Landlord Lesson – Legal Possession

May 30th, 2016 · Kids & Family, Rental Property

we are not interested Here’s a bit of a brain twister for a lot of landlords, certainly the smaller ones and the landlords that have tenants renting parts of their home.
This is the concept of legal possession and how by accepting rent the landlord gives up some of the rights of legal possession and how the tenant gets those rights and then how to get the right of legal possession back.

Basically the owner of the property initially sets up a mortgage, and finalizes the closing and picks up the keys from the lawyer, and they get legal possession of the property. For this privilege, they have paid 5%-20% of the purchase price and signed off on a mortgage for the difference.  If the owner fails to pay the mortgage the bank can go through a legal procedure called foreclosure to get the right of legal possession back from the owner. Then the bank will have legal possession.

Unlike the property itself which stays where it is, the right to use it can shift around to different people.

Tenants and legal possession

Our enterprising owner then decides to rent out his place, perhaps a basement apartment, perhaps the entire house. Oftentimes, this might be done really casually, as it’s just a basement apartment or just to friends who need a place for a few months. What could possibly go wrong?

As it turns out during this casual transaction, upon trading the keys for money, the owner has given the tenant legal possession…

For this privilege the tenant may have paid $500 or $800 or $2000. If the tenant fails to pay the rent the landlord can go through a legal procedure at the Landlord & Tenant Board to regain the right of legal possession.  It can take several months, cost a lot in legal fees, and it can go be very traumatic if you are living in the same house.

Now this tenant has almost the same rights as you do, in “your” property, except it’s not “your” property because you leased your rights away.  It’s their property until you get that pesky right of legal possession back. The only right you have is to pay the mortgage (That right you still have)  and apply to the Landlord & Tenant Board for eviction.

Legal Possession is Serious Business

Make no mistake, when you hand over the keys in exchange for money, it’s a big deal with potentially serious consequence and ramifications. Legal possession is not be taken lightly.

I compare leasing an apartment to leasing a car. If you lease someone a car can you tell people to

  • How many people they can have in the car?
  • If they can put their pet in the car?
  • What if they want to have visitors in the car?
  • Eat smelly food in the car?
  • Smoking in the car?
  • Drive around late at night in the car?
  • Play loud music in the car ? (Between city bylaw hours)
  • Obviously you can’t just go into their car whenever you like.

Tenancy is a serious business relationship and before you hand over the keys and take the money, you need to evaluate if the tenant is a stable business “partner”. In Ontario that business relationship may last many years.

If there is one word of advice I would give to owners about renting it would be to focus on the quality of their future business relationship and the person in it rather than their impending mortgage payment.

“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.” ~ John Quincy Adams

Legal Possession is Important. Wait.

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Rental Market Much Stronger In 2016

May 14th, 2016 · Rental Property

Rental

Last year I was very concerned about the rental market. Condo buildings were getting built and condos were on the rental market for a good long time. Prices were flat with even a small decline, and you had the impression that you had to work every application, and get every single appointment or you might have to wait a good while before the next rental opportunity.

New buildings had an auction like atmosphere with tenants putting ads up on kijiji touting their high credit scores and what they were willing to pay for which building.

At the top of troubling signs was the lack of showings and lame turnout for places.  Places that would have seen lots of showings even a year before, lingered for no good reason. The only thing that seemed to matter or make a difference was price and tenants didn’t seem to care too much about anything else. If you had a place that was bigger or had a better layout you were virtually stuck with the same price as the less desirable suites, or no one would come to your showings.

This year is a different story, prices are actually rising, more around the GTA but even in the downtown core. North Oshawa is on fire. I’m getting multiple applications on “Open House” showings out there. Last week I had 20 people show up for a 3 bedroom detached out there and three applications.

I’m already running out of property to rent and it’s May.  The only softness in the market seems to be in the more expensive properties over $2000 per month depending on what it is.

I’ve been renting condos over at Sherway Gardens Rd for 5-6 years now and the rent started at $1200 and went up a little bit, we got $1295 a few years ago, prices went back down to $1200 and this year we just rented one for $1350. After years of only maintenance fee increases, landlords can use a bit of a break.

Rejoice for there is hope!

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Unauthorized Occupants – So Annoying

February 27th, 2016 · Property Management

No Trespassing

I got hired to manage a condo because the owner was having some issues with the tenants. One of the leaseholders had said that he was leaving the country but he had managed to find someone to take over his lease for the last several months. Then it became a big deal for the rent. The new tenants did not possess the skill of getting the rent to us. Every month was a brand new month of discovery on how to pay the rent. One month was “Come pick up the cash” the next was deposited to my account, then an e-transfer.

This month, no rent came at all, but fortunately I’d had an N-4 ready to fly immediately. Next came a surprising amount of disconnected telephone numbers.

Floor Inspection Time

Eventually the owner and I decided to do an inspection of the floors. The laminate floors installed by the builders had a strange wear pattern/defect I’d noticed. Basically little specks of paint had worn off the floors throughout the place. I had noticed that the tenants did only wear their socks in the house so we decided to investigate and report the problem to the builder, but first I had to show the owner.

Some Guy Named Hassan

We’d sent a message that we were coming by to look at the floors by phone and email. When we knocked on the door a stranger answered.  We told her, we are the landlord and we are here for our prearranged floor inspection. Last time I had been there it was 4 single guys living there. So we ask who she is, she hands the phone to us and we speak to her husband Hassan. He was supposed to pay the rent and then he was going to be able to make a lease with us. That’s what he had been told by the tenant. I’m like “No” that’s not how it works. The owner and I end up calling the police to try and figure out what is going on.

Mohammad had left the building and the country and told these people (possibly relatives) they could stay.

Truer Words Have Never Been Spoken

I end up shouting at some point, “This is an $800,000 condo, not an old shoe you can pass around to all your friends!”

Moving Out & Leaving The Condo Trashed

They left yesterday and they left a lot of garbage behind, including a plate of some unspeakable food in the fridge. Then they shut off all the power, so the fridge was interesting when I got there, but fortunately with the food down the chute and the fridge back on, we’ll be able to just give it a wash. A fridge turned off with some decomposing food in it, is not salvageable after a few days. You will never get the stench of rotting unspeakable stuff out of it. So we got lucky there.

Damages

Mostly garbage and a paint job and steam cleaning of the carpet and some serious cleaning will get the condo up to snuff and ready for rent in a few days.

Dealing with Unauthorized Occupants

I would say that we dealt with the situation properly. The police came out and I was quite forceful with the boundary setting. Quite strange and awkward to meet someone you absolutely not expecting. It was not the unauthorized occupant’s fault, they were misled by the tenant who thought the condo was some type of flophouse instead of a place where you sign a lease and take things seriously. We could have had to go to the Landlord & Tenant Board but they moved out pretty much right away.

All’s Well that Ends Well

 

 

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Evictions – The Travels of Jimmy the Cat

February 21st, 2016 · Property Management

Jimmy the catEveryone with a job can tell you that there are some bad parts to almost every career. Evictions are something I’m not sure I will ever get used to. Landlords can and do call me to help with very difficult tenants. While I don’t generally mind, late 2015 found me dealing with three difficult and wearing evictions that were all occurring at the same time. Frankly I became emotionally exhausted, and these situations just dragged on and on. So here’s a list of the situations I was involved in as a property manager hired to deal with the pain of awful tenants.  Jeff Shabes of Jems Paralegal did the legal work.

Eviction 1

This one was a tenant on tenant violence followed by mental health and hoarding issues. Basically one tenant severely assaulted the other and so we went ahead and made an agreement with him to move out through mediation. We had overwhelming evidence. The victim tenant had stopped paying rent but really was scared and just wanted to leave. We met and we agreed to terminate the tenancy using the N11. They did not move.

Next, we filed at the Landlord & Tenant Board against the victim this time and we had a hearing. When we got to the hearing, we got notified that the tenant was in hospital and so the entire issue was delayed for 2 months. The tenant still did not move. During this period I went and did an inspection and found that the place was hoarded up and the smoke alarm had been disabled.

Finally the tenant moved out. This eviction took over 6 months and both apartments were trashed and needed lots of renovations. It was very stressful for everyone. The owner has since let me go because they are selling the property. I’m happy I never need to see that place or think about it again.

Eviction 2

These people had already been evicted 2 times this year and pay up on the day the sheriff comes. This time they were unable to come up with all the money. They gave me part of the rent and they were locked out. They then paid up all the rent and filed a motion to void. This can be filed by a tenant that is evicted one time during their tenancy. There was a bunch of rushing around to meet the sheriff, then give them back the keys.

Honestly I have no idea what these people’s deal is. They are by all accounts decent people, they work, they are clean, they are polite, they just don’t pay rent until the Sheriff comes.

Eviction 3

This was an another tragic case. I had a couple in a an apartment of several years and they have never managed to pay the rent in full and on time. The other tenants would complain of fighting. Finally the second time of trying to evict for non payment of rent, we were forced to take a payment plan. I rarely refuse payments plans, but in this case I was forced to by the Landlord & Tenant Board.

The tenants paid all their payments except the small last one. Around that time, I got a call that the tenant had severely beat his girlfriend, and was in jail. She had to be taken out of the house in an ambulance.

Around this time I ended up filing for a breach of the original order to pay. The girlfriend was not on the lease (even thought they rented together) and so she had no legal standing. Then the guy moved out his stuff but she was still living there with her kids. If she was able to pay, I could have drawn up a new lease, but she simply didn’t have the ability to pay.

Almost every day, she would call me after a few drinks, check in and tell me she was moving for several months. EVERY DAY.

Finally the sheriff came, and she came and got some of her stuff.  They’d had 2 cats, but one was very sick and they couldn’t find him a home. So that’s how Jimmy the cat came into my life.

Obviously after dealing with all these issues for months, I was worn out, and so I’m not sure why but Jimmy was like a symbol of hope. Finally among all this suffering I could possibly do something to change his fate. I would finally be able to do something good.

Jimmy the Cat

Jimmy was a super friendly cat and when I was changing the locks with the sheriff, Jimmy was purring and winding his way around my legs and generally acting like a one cat welcoming committee. Unfortunately Jimmy was also sick, he could hardly breathe. He was also extremely skinny, and looked like he was on his last legs. I thought, I’ll take him to the vet, get him some antibiotics and he’ll be fine.  It was not fine.

The picture above is Jimmy at his first vet visit and the first thing they did was feed him. He weighted 3 lbs. So I got him some antibiotics, and that did help, he gained about a pound initially and he never really got better after that. I brought him back to the vet 2 more times and gave him Lysine and Steroids but nothing helped very much.

My husband and nephew are allergic to cats, so I was driving to the house everyday medicating and feeding and patting the cat. I fixated on Jimmy the cat, surely after everything I could at least fix one stupid friendly little cat, right? He was happy and didn’t seem to be in pain so I didn’t feel right taking him the Toronto Animal Services on euthanasia day. I contacted a few rescues, and no wants a sick cat. They’re afraid that it will spread to the other cats. Jimmy’s prospects seemed really grim.

Fuck Cancer

Then I found out my disabled sister has breast cancer. I’m going with her to Sunnybrooke Hospital for her staging tests, then going to feed and medicate Jimmy the cat everyday. By this point it had been over a month and I loved the little critter he really captured my heart with his snotty nose and cuddles. Then I reached out to Toronto Humane Society and set up a surrender appointment, I faxed Jimmy the cats medical records over, and trusted that they would do whatever they could for him and gladly paid the $50. I really did not know if the kindest thing would be to put him to sleep. At some point I’d lost all perspective.

Toronto Humane Society told me that they wouldn’t let me know what had happened as it was against their policies. I had to be satisfied that I had done my best for Jimmy.

Then came a dizzying round of tests at Sunnybrooke with my sister. I’m still dealing with that, the cancer was discovered too late and she’s Stage 4 already so no cure is possible and obviously that’s really awful.

Back To Jimmy

Last week a I got a phone call from the Toronto Humane Society. Jimmy ended up having nasal polyps and they were able to perform surgery and he found a home. One friendly little cat saved. Jimmy became a symbol of being able to do one small positive action while awash in negativity I could do nothing about. I was trying hard, but I ended up feeling worn and ineffectual.

For Eviction #1 It would have been ok if we evicted the tenant who assaulted the other, and the other tenant was protected and stayed, but instead the victim of the assault ripped off the poor landlord for 6 month’s rent and endangered everyone else with her hoarding.

For Eviction # 2 I am taking them back to the Landlord & Tenant Board for the 4th time for eviction for non payment in a year.

For Eviction #3 The victim ended up being an alcoholic who used her trauma as an excuse for her bad behavior. It ended up being very hard for me to feel for her. She really played the victim card and I ended up being really annoyed by her unwillingness to help herself. Going up North to hang out with your new boyfriend and not move your stuff and calling me drunk every single night to tell me about your lack of progress was exhausting and infuriating.

But I did save Jimmy the Cat, so there’s that.

Just do your best and screw the rest.

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Condo Rules – Occupancy Restrictions Rant

September 16th, 2015 · Property Management, Real Estate Lawyer, Rental Property

Human Rights Day commemoration, 21 Mar 2015Lets talk about the sneaky way that condos restrict occupation of their units and how that impacts investors and occupants alike.  I’ll even name then and shame them in this post because I’m a fed up by this blatant ignorance of the Ontario Human Rights Tribunal’s clear rules and regulations. You may not discriminate based on family status. Some people are both dumb and discriminatory.

Unknown Client

Just last month I refused a client, she had a lovely 3 bedroom condo on Coxwell Ave.  We talked a while, I told her that it should be pretty easy to rent because it was on the second floor and a three bedroom. “We will be able to find a great family for your condo” I said. “No, I don’t want to rent to families” she told me. I asked her “Who exactly do you think will rent a three bedroom condo?”

According to this lady, there are a lot of seniors who want to pay for a three bedroom even if they only need one. I can’t wait until the rampaging horde of seniors finds me, because I keep renting to young professionals and families. The seniors are stuck to their large paid off houses and so far are not renting condos.

Sadly, I told her I don’t discriminate like that. First because I don’t want to. Second because it’s illegal and all I lost was the opportunity to make 20 trips downtown looking for a magical tenant.

3650 Kaneff Crescent, Mississauga

This condo is managed by Tridel and it used to be a seniors building. They’ve enjoyed a long history of discrimination and they continue to this day. It’s no surprise that a lot of units are for sale in that building. Last year we rented a one plus den that had been converted to a two bedroom unit to a family. We did not ask how many children the family had. It’s none of our business as long as the parents can pay rent. We had no legitimate reason to decline them. After the family (very nice and clean BTW) move in we find out that they have 4 small children when the management of 3650 Kaneff Crescent, Tridel sends the owner a letter stating that his maintenance fees will increase 50% because there are 2 more people then are allowed by the building by-laws.

The place is very clean and organized and well taken care of. The building wants to charge more for these 2 extra kids because of wear and tear on the building. That’s $400 more a month. It’s 1300 square feet, unlike the 3 bedroom I manage that’s 900. (coming up next)

So I sent a letter to the owner of the unit and he requested a meeting with the condo board.

Please forward this information onto the condo management. It is my position at this point that we were unable to discriminate based on the number of children that the tenants had because it is illegal. However the Ontario Human Rights Code does also prevail over the condo bylaw. Just as it would be disallowed to ask a resident to pay more based on their colour the condo board regulation is not complying with the requirements of the OHRC based on lack of discrimination based on family size.

Certainly a maintenance fee increase of 50% is unreasonable at best and illegal.

Condominium corporations may not contract out of the law, in this case the OHRC because of perceived increased utility cost. Do they give single people a discount because they are not using their allotment of utilities? I think not. This is a poorly veiled attempt to limit children in the building or provide a severe financial disincentive for landlords to allow families as tenants.

My suggestion at this point is that the Condo Board review the relevant legislation and possibly send it their lawyer for consideration before imposing any extra fees or penalties or increase in maintenance fees. The bylaws are created when the building becomes a corporate entity, usually a year or so after occupancy. However the rules for housing and specifically the addition of housing guidelines to the OHRC and subsequent enforcement of those laws have changed considerably in the last few years. It is only reasonable that our enforcement of these by-laws must change to reflect the updated status of the OHRC.

Many thanks,

Rachelle

That was in February and apparently no increase was sent to the owner. Now the lease is expired and the condo board and Tridel as their agent are pressuring my client to terminate the lease or they will impose the increase in maintenance fees.

Tridel, what are you doing? This condo board is a bunch of uninformed yokels, but you are supposed to be professionals and tell your clients when they are doing questionable and stupid acts that will wind up before the courts. Do you really want a OHRT suit that will cost tens of thousands or more to defend so you can illegally discriminate against families? Seriously, get your head out of the board’s ass and give your head a shake. I don’t think that’s an appropriate use of funds for a condo that already charges $734.11 per month in maintenance fees for one plus den. Just saying. (Now you know why I don’t work as a condo manager lol)

The Westlake 2220 Lakeshore Ave W

As mentioned previously, this building has sold a 3 bedroom, two bath condo to my client. It’s a whole 900 square feet so the rooms are a decent size but the common area is about the size of an eat in kitchen. Living room is combined with the kitchen. It’s small. The families who came to see it, rejected it because there is no living space to speak of. So we rented it to a few roommates that are all working, very polite and completely respectful.

So here is Onni the developer being stupid.

Hi (Wonderful Client),

So I just spoke to Tina from Westlake.  Our tenants have been having access issues as they only have 1 FOB between the three of them and as the building develops, they have implemented a system where in order to access your floor, you will need to swipe your FOB.  Each fob only accesses your floor (strangely enough.  Meaning if you live on the 6th floor, you will not be able to visit your friend on any other floor without them swiping their FOB in the elevator).   

Additionally, according to Tina, it has been determined by the Board that each unit is allowed a maximum of 2 FOBS… 1 garage and 1 general access.  This may change depending on Board decisions / outcome of voting I assume by unit owners (so make sure you attend those Board meetings!  😉

Our tenants currently have 1 FOB.  In order to secure another, they require an email from the Unit Owner indicating;

That you require an additional FOB
The name of the tenant it is required for (tenant)
The purpose for the FOB (for the tenant)
Who will be picking up the FOB (myself)
Personal cheque from the Unit owner of $75 payable to Onni Contracting Ontario

Tina, kindly confirm if there is anything further that you require or if I am missing any information.  

(Client), let me know when / where is best place for me to get the cheques from you.  I will collect deposit from tenants once I issue to them that will be exchanged for the FOB at the end of their tenancy.

Regards,

 
Dina Mulic

Then I replied to all including this manager…

Hi Dina,

Did you tell management that we have a three bedroom and that it’s completely possible to have 3 adult people living in a three bedroom?

Is it possible that we are seeing the same discriminatory policy we saw and complained about at Kaneff Crescent? Are management aware that policies discriminating like this are against Ontario Human Rights Commissions guidelines on housing?

I’m sure the Westlake wouldn’t want to be the brought in front of the OHRC for providing to provide proper access for our residents. Residents who are perfectly legally allowed to live in the building.

I’m sure that we can get 3 FOBs because that’s just reasonable.

Rachelle

Fortunately Onni saw the light and decided to issue us another FOB to access the building. It would not be illegal for 3 couples to share a 3 bedroom. It would be tight but possible. So without doing anything wrong we could need 6 FOBs per 3 bedroom. As a landlord you might only rent to three people but they might end up with a spouse/bedfriend.

Occupancy Thoughts

Some people’s response to these higher rents is to simply share accommodations. It’s unfortunate but people want to get ahead and even if that’s not our style, they figure out ways to make due in very small spaces. I had a lovely family at 225-235 Sherway Gardens Rd condominiums, they moved in pregnant, and had two children, then I became aware that every time I went to inspect the unit their parents were “visiting” so that was 6 people living in 500 square feet. They paid the rent every single month, the place was immaculate and neat and tidy. I didn’t even have to paint the unit after they left. The law is pretty clear that landlords do not have the right to limit occupancy other than according to the city bylaws. Even so, if the unit is being kept immaculately, I’m not going to call the city on an apartment I manage. Had they told me before they moved in that they were going to live 6 people in a one bedroom I would have said no but eventually they moved out and bought a nice house. They were saving up money for a long time.

Benefits of Management

As more and more condominiums are rental units, I see more and more of these conflicts between landlords trying to break even and condo managers. You can get some really bizarre boards who are completely unchecked by their management companies. (They are terrified of getting fired) Owners don’t generally know the rules that well and most people don’t have the chutzpah to set these boards and managers straight. I’ve had condo managers try and stick owners with repairs many times, extend the amount of time renovations on a suite over 6 months because of unnecessary bureaucratic approvals, general incompetence and more. I’m really looking forward to this new Condo Tribunal which will give condo owners reasonably priced access to justice.

Otherwise we will end up with a city’s worth of Panorama Courts in 30 years. One more article on that nightmare condo.

What have your experience been as a landlord of a condo?

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