Brand Name Evictions

January 22nd, 2018 · Landlord & Tenant Board, Rental Property

Today I went to the final step in an eviction, the arrival of the sheriff / enforcement officers. Once they make sure the tenant has moved out, you get possession of your property back. For 72 hours the tenant has a right to come pick up their stuff.

This tenant owes over 10K and what we found today was disgusting. Empty box after empty box of name brand clothing, computer goods and Louis Vuitton purses.

I can get really angry because of the completely wrong meme of a single mom struggling to get by on her last dollar, honest but unfortunate victim of circumstances and life or hardworking immigrant with bad English making minimum wage has to choose between food and their greedy landlord’s rent.

This is my experience of the deadbeat tenant, and honestly I’ve seen this shit too many times. This is why I’m becoming so merciless with rent arrears, because of people like this one.

I wish Landlord& Tenant Board adjudicators were paid using deadbeat tenant Landlord & Tenant Board Orders.

Deadbeat tenants… scammers.

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Landlords & Professionalism Replying to Ads

January 21st, 2018 · Property Management, Rental Property

Recently I’ve had occasion to help a few friends with the rental process and it’s been terrible. Experiencing the rental process from the other direction made me realize that we are doing a lot better than most other landlords but we can still improve a lot. It also explained a lot of “annoying” responses that tenants had been sending. It also explained a lot of newspaper articles about bidding wars. The experience has made me change my approach to the advertising process.

Here are the major issues I encountered…

  1. No reply to emails
  2. No reply to phone calls
  3. False Advertising
  4. Underpricing for the purposes of making a bidding war.
  5. Inactive Ads

So when you respond to an ad, you have a default message, such as Is this property still available? or Hi, I am interested in learning more about 83 Brenda Crescent at 83 Brenda Crescent, Toronto ON, M1K 3C5. Some landlords have taken to not answering these default messages because they feel like the tenant can’t be bothered to put any effort into the rental process. What most landlords don’t realize is that tenants are getting about 1 response for every 20-30 emails they send out. It’s kind of hard to write your whole life story when you get less that 5% of responses back. No I’m not exaggerating.

My Solution: Reply back even if it’s a simple message like “Sorry the property has been rented” or Sorry we have an application in process and will let you know if it falls through”

So when tenants call no one calls them back and I too am guilty of this. It can take a lot of time to call everyone back. It’s annoying especially if the place is already rented.

My Solution: Send a text, it doesn’t take much time.

I can not tell you how many people have said to me throughout the years… “The property looks just like the pictures.” We take pictures of the actual property with the actual number of rooms, etc. We present the property move in ready in good condition. Apparently this is not a common practice in the landlord business. I’m not sure why, I wouldn’t want to move into a dirty rental and I don’t know anyone who would. Finally if you misrepresent the property, you’re wasting both yours and the potential tenant’s time.

My Solution: Don’t be a douche.

I responded to ads such as a 3 bedroom whole house with excellent pictures on Dufferin Street, priced at $1800 per month. At least the landlord answered the phone, it was a real estate agent who told me they had a lot of interest and would be accepting offers. I laughed and said “No thanks I don’t participate in bidding wars”

My Solution: Flamethrowers or Just SAY NO!

There are often delays with the rental process such as pending applications that are taking 3-4 days to process or you’re waiting to do a showing and haven’t gotten back to people. I’ve had some ads with hundreds of responses. Then it can take a few days before pulling all the ads down. Life happens. Finally with us we have a lot of advertisers, so we can easily forget to pull one ad down from one of them.

My Solution: Take your ads down, reply in the meantime such as We have an application pending etc.

Helping other people find and look for rental properties made me really appreciate that tenants are not getting responses from 90+% of communication efforts with landlords. This made me change my own business practices to respond to tenants even after the property is rented. I encourage other landlords to be more professional in their tenant communications.

I learn a lot about the difficulties tenants experience when trying to respond to ads to see places, and I for one am going to change the way I communicate and deal with tenants trying to rent. Finally I feel like a lot of landlords may just be avoiding uncomfortable situations by “ghosting” tenants instead of telling them directly their application is not accepted.

Be Professional – No Ghosting

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Richmond Hill – Can You Stop Breaking The Law?

January 13th, 2018 · Property Management, Rental Property

I can just get so disgusted. In 2011 Ontario passed a law that should have made every basement apartment in Ontario legal. Unfortunately they stopped short of sanity because they allowed the municipalities to set their own by-laws, rules, committees, licensing schemes and generally non stop road blocks to the legalization of basement apartments to satisfy the endless stream of NIMBY jerks who are terrified that some tenant germs might fall on their property or God Forbid someone park on their empty goddamn suburban street. In fact the only city that is usually pretty good is the City of Toronto, as long as your place follows Fire Code rules, they aren’t going to bother you.

For many years after the Strong Communities through Affordable Housing Act, 2011, Mississauga, Brampton, Oshawa, Whitby and others actively continued to try to eradicate second suites. To this day many cities are just complete assholes about allowing what is our only new source of affordable housing. Only 70% of the upstairs area? Two furnaces in new houses? A certain width driveway? And on and on, with every little town and hamlet, a different set of rules and regulations. It’s just maddening. Is it necessary? Is it helpful? What are the consequences?

The inevitable conclusion I have come to is that all of these rules and regulations serve just one purpose, dissuading owners from creating basement suites and adding endless hassle and expense. However grudgingly these cities have been dragged kicking and screaming into the modern era at least landlords with second suites are not inherently “Go Directly To Jail” illegally breaking the law. Finally.

However a full 7 years later Richmond Hill is still continuing this proud lawbreaking tradition, it’s really terrible and it has nothing to do with safety. It’s stupid and regressive.

Today a Fire Inspector went to the apartment in question, and his only suggestion for safety was to change the plastic dryer vent hose for a metal dryer vent hose. Everything else is legal, everything is safe, and lets face it a lot us have that shitty plastic vent hose in our houses. (You should change it)

Then a City Inspector went in and is sending information to the owner on how to remove the kitchen and basically take this apartment off the market.

In the GTA every day there is something in the news about the vacancy rates… and how we need affordable housing really badly, and people are homeless and dying in the weather and then you have the city assholes in Richmond Hill shutting down really nice decent apartments contrary to the law of Ontario and contrary to common sense.

Don’t get me wrong, I’m still frustrated as heck with antiquated City of Toronto Bylaws that make triplexes and multi unit houses in vast swathes of suburbia illegal, impossible, and unthinkable but today it’s Richmond Hill that makes me sick, and I hope it makes you sick too.

Mayor of Richmond Hill officemayor@richmondhill.ca

Councillor Greg Beros greg@gregberos.com

Councillor Tom Muench tom.muench@richmondhill.ca

Councillor Castro Liu castro.liu@richmondhill.ca

Councillor  David West david.west@richmondhill.ca

Councillor Karen Cilevitz karen.cilevitz@richmondhill.ca

Councillor Godwin Chan godwin.chan@richmondhill.ca

Just to make it easy I’ve create a little note you can copy paste (Control C to copy and Control V to paste) into an email to aforementioned city officials who have ignored the law of Ontario for years and failed to update their city policies to reflect the new rules adding to homelessness and the lack of affordable housing in their city.

Dear Mayor & Councillors of Richmond Hill,

It is time to stop ignoring the law of Ontario specifically the Strong Communities through Affordable Housing Act 2011 and stop forcing your bylaw officers to tell your (many new immigrant) constituents to remove perfectly safe and legal basement apartments. It’s time to check basement apartments for Fire Safety and then leave the tenants and owners alone.

Tenants have been evicted by owners for no good reason other than regressive, antiquated city policy, bullied by your bylaw officers and frightened of City of Richmond Hill threats of fines. The poorest and most vulnerable tenants… You are acting in an illegal manner and you need to stop be part of dismantling economically disadvantaged people’s homes.

Many Thanks,

Concerned Resident of Ontario (Your Name)

Go suck an Egg – Richmond Hill – Stop Being a Douche

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California Landlord Woes – Sounds Like Toronto

January 9th, 2018 · Personal House, Property Management

I completely stole this post about a California Landlord from Reddit. It just really goes to show that the problems we have in Toronto are not unique.

There’s another aspect that hasn’t been touched on, California’s landlord/tenant laws. I know a little about this because I’m a lawyer. I’m also an accountant and a landlord with a few properties in California and more in Arizona.

California makes it difficult to evict non-paying tenants. I know this is not a popular topic, but please hear me out. If you want people to invest, they need to have a return. I’m not talking about the profit. The income is necessary to make mortgage payments, property tax payments, insurance payments, utility payments, management payments, pay for maintenance and repairs, and much else.

Also keep in mind that anything left over is taxed, which often winds up being about 50% of the profit. Further, the IRS often wants quarterly payments from businesses. It’s slightly worse than that, though. The IRS estimates your income and expects quarterly payments of that estimate – which includes money that you may not have received. Think about that. Imagine the IRS expects you to make $50,000 in a year, but with all hours worked, it’s more like $40,000. But you still have to pay the IRS taxes equivalent to earning $50,000. The difference will be worked out later when you file, but the IRS wants the estimated tax NOW and you’re in deep shit if you don’t pay what the IRS thinks you should be paying. (The California Franchise Tax Board is a pain in the ass, too, but I won’t get into that.)

OK. Everything we listed are what we call fixed costs. That is, you have to pay them every month and these costs do not vary based on your income.

The rub is that rental income is variable. You will have vacancies. You will have unexpected maintenance costs. And then you have tenants who do not pay.

California makes it difficult to evict a tenant who doesn’t pay. The procedure can be dragged out over three or four months. That is three or four months of having to pay fixed costs (including tax on income the IRS thinks you’re getting when you are not) without any income. In contrast, I can boot someone in Arizona who doesn’t pay in 3-4 weeks. Yes, that includes full due process under the law.

So when you develop apartments, you have to figure in the costs for people who don’t pay. That’s the reality of the business. Some people won’t pay and you’re still going to have to pay your fixed costs. The IRS doesn’t give a rip if someone didn’t pay you, they still want their estimated taxes. The mortgage holder gives zero fucks, as well. And try not paying your property taxes and see what happens. You need to either have deep pockets or you have to raise rents to cover your fixed costs in case of nonpayment.

I’ve run the numbers on developing and renting in California. It ain’t pretty. I can’t make the numbers work for me. No, that doesn’t mean I can’t afford a fractional share of a jet and a Ferrari payment. It means not breaking even and probably losing money. As in I’d have to hold a cardboard sign at an offramp and hope to get enough change to buy ramen.

Simply put, it’s not worth it. I am not going to put time and money into something with no return. I don’t work for free. I drive a ten year old car and a treat for me is hitting a local Mexican place where I can get a $10 dinner. But I couldn’t even afford that by investing in LA.

Something has to change. It will have to be a radical change, because there’s too much wrong to have an easy solution. In the short term, people should leave. I did. I managed to buy a 1,500 square foot house with a pool for $106k down here. It’s an older house and I’ve torn it down to the studs, but it’s affordable. Something like it in LA would be at least $700k or $800k. As much as I love LA, the numbers no longer work.

This is very similar to the problems landlord in the GTA have and certainly a problem with creating additional housing stock. You might not care about losing money if you used to live in the house, or a speculating on capital increases. The point is as an income property it’s just not worthwhile as a business. And it doesn’t scale… and what that means is you can afford one or two money losing properties, but you can’t afford ten or twenty or 100. That’s what we need in the GTA, more affordable housing and we’re not going to get it, unless house prices get a lot more reasonable.

Happy Renting!

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Homelessness Problem Needs More Than Just Affordable Apartments.

January 7th, 2018 · Property Management, Rental Property

There are a lot of homeless people in Toronto and because it’s colder than a witches tit outside, the Mayor had to open up the Fort York Armory, to keep the homeless from freezing to death.

The real question remains what are we going to do about the problem of chronic homelessness in Toronto and elsewhere?

Earlier today I read a very good article about Housing First and It’s Impediments, which is a research report for the Calgary Homeless Foundation. They do a pretty interesting analysis of the Streets to Homes programs, which I considered very realistic. They have statistics about the “rehousing events” which means that they get people housing and they don’t pay their rent or get evicted. There is discussion about how 200 clients were housed in a building and they have all mostly been kicked out because of lack of support and they don’t put 200 clients in one building anymore.

There is also talk about how there is virtually no rent geared to income for people who are homeless, there are just no spots and the City of Toronto seems to be reducing spots not increasing housing.

I don’t think any of the issues surrounding homelessness especially chronic homelessness can be addressed without discussing the unpleasant fact that by the time people become homeless, they’ve exhausted their families, their friends, and all other resources. So you are looking at people with very complex issues, such as addiction, mental health, personality disorders, criminality, lack of employability.

While it is true that housing is a core tenet to stability required to deal with some of the other issues, it’s not going to be maintained on it’s own without support. Certain behaviors are not compatible with community living.

We haven’t even discussed poverty yet.

So let me give you an example, I had a condo for rent, I get contacted by a gentleman named Carlos. He says he wants to come see the condo, the rent is $1800. I set an appointment for X time and give my usual instruction to call before and confirm, I get no such call. The next day, I get a call from the building security, Carlos is at the building. It’s not far, I drive over to show the unit. Carlos smells very badly of poo. I’m not really comfortable in the elevator because Carlos is setting off my sketchy as heck instinct in a significant way.

I give Carlos an application, he says he’ll fill it out. I don’t get anything. Then on the 1st of the month Carlos calls me, and says he’s moving into the unit. I’m like no you’re not. You need first & last. Carlos now tells me that he is on Ontario Works. His income is $630 per month.

So as you can see, housing people with these kinds of complex problems is a major challenge. Carlos lacks the basic skills required to get and maintain housing. First he can’t fill out an application, he can’t follow simple instructions and I can’t imagine what his credit score is like, and his income is so low there are virtually no apartments in his price range. And he smells like poo. No one is going to rent to Carlos.

Even if Carlos did have an apartment, chances are that he couldn’t maintain it, and he needs ongoing help for his mental issues. This is what the Streets to Homes statistics revealed. Further any landlords that have participated in Streets to Homes where they have had to evict a tenant isn’t going to really feel like signing up again, are they?

Then there are further issues like the one this Ottawa landlord had. Again there are no life skills supports in place. The city and province have said that they want to “partner” with landlords but only in the context that they want landlord to take their complex homeless people out of the homeless system, so that they cost less money. Not in the way that they want to have a meaningful dialog with landlords about the real risk of housing difficult to house tenants, and the costs when things go wrong. Instead it’s very popular to accuse landlords of discrimination.

Then there is a major problem with our social services in that they are completely and totally inadequate to provide for the essentials of life including shelter. In Toronto, you simply cannot find even the shittiest room for $325 per month which is the allowed amount for Ontario Works for shelter.

There was a time when there was a “moving allowance” for people on ODSP, that has been clawed back. In fact what I have noticed is that people on Ontario Works and ODSP have to be better budgeters than anyone else, which considering the challenges they have that make them unable to work, is a pretty big ask. It’s pretty crazy. What inevitably happens is the same that happens to all of us, there is some type of emergency, and they don’t have credit cards, and they have to pick between rent and food, and they pick food, or the life of their cat, or a tire for their car and they don’t pay the rent… and they can’t recover because there is no leeway, no wiggle room, in their budget.

Anyhow, I can see landlords making a decision to help a homeless person, but with the caveat that their “partners” in this venture are going to support the person. Making sure they are well, they don’t smell like poo, their apartment is cleaned and sorted. These are the types of supports we need. The problem is that all these supports cost money and people might need mental health care, which is another difficult service to access. You need to have great mental health to have the skills to get mental health care.

From what I can see, there needs to be a lot more supportive housing built kind of in the model of an old age home, where people with lower levels of life skills can live in safety with a simple room, dinette, nursing care and cleaning. In the paper one of the workers espoused a desire for some slum lords, who wouldn’t care too much about their clients were up to and not be too picky about cleanliness. I have noticed a really unrealistic trend, where people have champagne dreams on a beer budget. For people who are presently homeless, any place that is not -20 would be an improvement.

Until the province and the city make significant headway towards realistic programs that increase the amount of rent that people on OW can pay, and support people with complex issues, including paying the rent to landlords and continuing to pay the rent for tenant, and dealing with other issues to help landlords deal with ongoing concerns… we will continue to have a severe homeless problem.

Until the city can admit that the homeless are not an ideal tenant pool, and that landlords are not able to solve these issues just by giving people a place to live, then there can be no movement towards a solution. Eviction is traumatic for the landlord & the tenant. Surely avoiding additional trauma is beneficial?

I’ve been a property manager for 20 years and I have tried many times to help people who have housing problems and I mostly live to regret it. Even now I feel really bad just saying it, but it’s my real experience.

I for one cannot wait until some meaningful actions happen.

Eradicate Homelessness – realistic supports.

 

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