Be Smart Landlord
10 Most Common Mistakes by DIY Landlords
Not Run Background & Credit Check of Prospective Tenants
A rental background and credit check is like an x-ray that allows you to see beneath the surface of a potential tenant.
Past behavior tends to predict future behavior. If tenants have a history of not paying their bills or continuously paying their bills late, it is possible that this behavior will continue in the future – meaning that rent payments will be late or missed.
These checks will permit you to confirm that the tenants are in a position to pay rent and that there are no “red flags” with respect to their credit history. Before you proceed, make sure a written permission is obtained from the tenants to run the checks.
Ask for Improper Information from Tenants
When collecting a prospective tenant or a tenant’s personal information, landlord should collect only what information is necessary to rent and manage the property.
Landlord should ensure that these collection practices are in accordance with the obligations set out in PIPA (Personal Information Protection Act ) and the RTA (Residential Tenancy Act).
In addition, according to BC Human Right Code, landlord cannot refuse to rent to a tenant based on their race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, gender, sexual orientation, age or lawful source of income.
Rely on a Handshake without Proper Lease Agreement
Landlord should rent a place with a written agreement, and the agreement should be on the standard lease form (RTB-1).
According to RTA (Residential Tenancy Act), even if the landlord doesn’t prepare one, the standard terms of a tenancy agreement still apply automatically. So, why not having a written agreement to protect yourself?
Both landlords and tenants must sign and date the agreement. Landlords need to provide a printed copy to their tenants within 21 days of entering into the agreement.
Renting Property without Proper License
To rent residential property in the area of City of Vancouver, landlords needs a rental property business licence, no matter they hire a property manager or not. This includes the typical One-family dwelling, apartment house, and also laneway house and secondary suite and rooming house.
Understanding the local rules and regulations, as well as licensing requirements, are essential for landlord. It is always unwise to rent out a property without the required licenses, permits and approvals.
Renting Property without Proper Home-Owner Insurance
Whether you rent or own your property, the property should be protected with Home-Owner insurance, even though your tenants has already their tenant insurance.
Tenant insurance mainly covers personal property and liability owned by the tenants. Landlords needs a separate Home-Owner insurance coverage for damages to your property from unexpected events like a fire or water damage. Landlords also need liability insurance in case someone are injured on your rental property.
No Move-In/Move-Out Inspection
According to the RTA (Residental Tenancy Act), landlords must give tenant the required opportunities to inspect the property and provide a copy of the completed Condition Inspection Report within 7 days of the inspection.
At the end of a tenancy, a landlord and tenant also inspect the property together.
Comparing the move-in and move-out Condition Inspection Reports allows the landlord and tenant to see if the property was damaged and who is responsible for paying for repairs.
Completing these steps is important in order to claim any of the deposits for the damages.
Not Ensure Tenant Pay Full Rent on Time
As a landlord, it’s absolutely vital to collect your rent payments on time. RTA (Residential Tenancy Act) is very clear that Rent must be paid in full and on time, and in the case of a 10 Day Notice in full before the end of the fifth day.
A landlord can give a 10 Day Notice to End Tenancy if rent or utilities are not paid by midnight on the due date. This notice may be served to a tenant the day after rent is due, or 30 days after giving a written demand for a utility payment
The notice is cancelled and the tenancy can continue if the tenant pays all the rent and utilities owing within five days of receiving the notice.
Under-estimate the time and efforts required
Landlords often ask if it’s possible for them to manage the property on their own. Of course it’s possible, as long as you have sufficient knowledge, experience, resources and time, and more importantly, don’t underestimate all of them.
For example, according to Residential Tenancy Act (RTA Sec.32.1), rental properties must comply with health, safety, and housing standards required by law. Landlords are generally responsible for the following essential repair and maintenance issues: Heating, Plumbing, Electricity, Locks etc. You have to be ready to respond to tenants and their needs at a reasonable time, day and night.
Not Inspect Your Property Regularly
One of the best way to protect your rental property is to inspect it during the lease term, and do it regularly and consistently.
Otherwise, you may be surprised to find any damage that has been ignored, signs of criminal activity, which can lead to fines, prolonged vacancies, and even forfeiture; or Dangerous conditions like environmental hazards, blocked exits, dangerous animals, or unknown occupants.
It is also important to note that most Home-Owner insurance policies have a condition clause, which states the rental property is required to be inspected regularly,
Hire unlicensed Property Manager
You can manage your rental property on your own, or by hiring a property manager. If you decide to hire a property manager, make sure he/she is a licensed one.
If the Real Estate “Professional” you are working with is unlicensed. Not only is it possible they have little to no experience , but there is no regulatory body monitoring them or protecting you! The likelihood that they will try and swindle you is very high, as they are known for taking advantage of those who are either inexperienced (real estate-wise) or financially vulnerable.
Right Property Manager Changes Everything
We can’t guarantee that the above tips will help you manage your house effectively. However, we believe that ignoring them will cost you.
Remember to find a professional and licensed Property Manager who always works for your needs, not for his/her own commission. Call us 778.862.8321