A few words on tenants’ and owners’ responsibility in maintenance of the suites.

The Residential Renancy Act deems that painting, scuffing and so forth would be reasonable wear and tear, and therefore it is the landlord’s responsibility to paint the suites.

We’ve had some issues in the past where a tenant just moved out and there is some scuffing to the paint and the landlord is not wanting to repaint. However the landlord must repaint it and it is a cost that must be borne by him. Obviously if there is major abuse, the walls completely scratched, definite gouging, holes punched, then this would be a tenant’s responsibility. But normal wear and tear is the owner’s responsibility and they have to be prepared to have that expenditure –  probably every couple of years or times during a tenant turnaround. Not necessarily every wall in the suite, but the walls that get the most traffic.

Any maintenance issue, any heavy appliance, would be the owner’s responsibility unless we can prove that there is some damage by the tenant. Other exceptions are hair clogging drains, toilets with foreign objects in them.

We make sure that all these items are working, all the appliances are working, when the tenants move in. And should something happen, we will charge back to the tenant.

Be Aware, Cautious and Prepared

You have just purchased a home in Vancouver and intend to live in it once the deal is completed. In the eyes of the BC Residential Tenancy Act, you become an “owner-occupier” and if this home is currently occupied by a renter you are entitled to end the tenancy. There are some things you should know about the procedure.

When an owner-occupier purchases, she must send a letter to the current landlord, on or before the effective date of the notice. The landlord (or the new owner-occupier) is required to pay the current tenant one month’s rent, plus give 60 days notice, served by the end of month.

In this situation, upon receiving this notice, the tenant, on the other hand, only has to give 10 days notice before ending the tenancy.

Often it becomes a negotiation point at the time of sale, deciding who should pay that one month’s rent – the new owner-occupier, or the seller.

There can be a downside to all this for landlords. If you are counting on the rent, and, say, the deal closes August 1, you will need to request in writing to the current owner to serve notice. However, if the tenant immediately after receiving this notice, gives 10 days notice and leaves after the 10th day of the month, the result to you would be a loss of revenue, in addition to the one month rent penalty.

In the light of this potential loss of revenue, landlords need to be aware, cautious, and prepared.

At Downtown Suites, we assist owners in understanding and preparing for all situations related to their property and the BC Residential Tenancy Act.

(This is an important Evergreen Resource article, revisited from our archives.)

Should landlords have a closed one year lease, with no month to month extensions allowed or use the standard 1 year lease and continue on month to month?
The standard form agreement is for the lease to be one year and then go month to month. If the tenancy is to be for one year only, the tenant has to initial agreement to this. Very few people will want to take a large or expensive suite and not have the security of knowing that they can continue on indefinitely, so we do find it is harder to rent without such an option.

On the other hand, with a one year lease, the tenancy officially ends at end of term. Tenants are not obliged to actually give notice, they may not cooperate with releasing, and usually are not responsive on whether they are staying on etc. We have had situations where they move out and then we have an empty month to then try and get the suite re-rented.
The advantages of the approach we use at Downtown Suites are as follows:

1. The rent can be renegotiated should the market warrant it. The owner can possibly avoid the legislated maximum increase allowed by the provincial government (this year currently 4%) on ongoing agreements.

2. In the event of a sale or the owner wishing to move into their own property, the tenant does not have to be asked to leave, under current legislation the landlord is required to pay one months rent for asking the tenant to move out.

Rents have increased quite significantly over the past year, quality tenants are becoming scarcer and the reality is properties are becoming much less affordable for the tenant rental pool (whose wages haven’t increased in the same ratio). There are also hundreds more rental suites coming on each month even though demand is still quite strong.
For more info, here is a link to the Residential Tenancy web site which governs these transactions.

What happens if you own a property and you decide to sell it? What happens with the tenant?

There are very defined rights and responsibilities for both parties, under the Residential Tenancy Act which is the governing act for all rental transactions in the province of British Columbia.
At Downtown Suites, we always rent our properties on a one year lease. The reason we take a one year lease is so we get some longevity with the tenant client, but after that we always go on a month to month basis. That gives flexibility to the owner, should they want to sell their property they then are able to do it. We’ve had a couple of instances where owners have asked us to get another lease from the tenant, and we have done that, and they decide the market is very strong, they want to sell it. The rental lease takes precedence over any sale. It is important to remember that.
It is almost impossible to sell a property with a long lease, even ten months left still on it, they wouldn’t be able to move in for 11 months. The other option is that sometimes you can buy the tenant out, but it’s not a very easy thing to do and of course you are very much in the tenant’s pocket then – they are writing the rules.
Once we have the flexibility of a month to month lease, the requirement is that should the property be sold, and the new owner wants to move in to it, (or should the existing owner wish to move back into his own property as well,) they have to give 60 days notice to the tenant that they want to move in, before the end of the rental period. The means of delivery of this notice is very regulated as well. If the notice is just posted on the door, I believe it’s three or four days notice is used up just by putting it on the door, so we have to be very careful about that.
So essentially, 60 days notice at the end of the month. The tenant then has the right to give 10 days notice to move out on any time within that period, and rent that has been paid for the time they are not going to be there is pro-rated and refunded to them.
So this can be quite complicated if you are expecting that rental stream and you won’t get it for two months if they decide to move out within 10 days of being served the notice. You would be without any rent for 50 days, so it’s something to bear in mind.
The other thing is they are required to receive one month’s rent for the inconvenience of having to move. Now a lot of owners balk at that, but the law is One Month’s Rent. I just had a situation with a gentleman from overseas, who didn’t want to pay this. A lot of overseas owners find this absurd in their mind and they want to get their own property back. The gentleman who was the tenant went to the arbitration court and, of course, he won. So be very careful. You are obliged to pay one month’s rent, plus once you serve the 60 days notice they can then give you 10 days notice and move out any time they want. And then the remaining rent is pro-rated and refunded to them.
I’ve had personal experience of this. I bought a house not so long ago and I had to pay out $6,000 in rents to tenants just so I could get the house back for myself. So it is quite painful. However looking at it from the other side, I can fully appreciate how tenants would feel if they’ve enjoyed living in their home – it is their home after all – and they are being forced to move. Of course now a lot of people are being forced to move so people can realize capital gains. We are not into the social issues here, but I’m just saying I’m sympathetic with both sides. But what really counts is the law, and what we have to administer.

(Video version posted below.)

(originally posted April 20, 2007)

I’ve given a 25-slide PowerPoint presentation to audiences several times, and thought it would be good to share it on this blog. It deals with some aspects of property management, including common pitfalls and how we avoid them. Please note that the bad tenant examples included here were from a suite we had inherited, which did not go through our rigorous tenant selection process. You can see all the slides here:

Rental vacancy rate to decline yet again!
According to the latest forecast from the Central Credit Union of British Columbia, released this month, the rental vacancy rate will continue to decline, dropping to 0.7% by October of 2007 and to 0.5% in October of 2008. Rents are expected to increase 2% in 2008. Current rental rates for new construction are approaching $2.50 and a bit beyond for choice locations and views, while more average stock is averaging $2+ psf. The strongest market of all is in the entry level suites under $1500 per month, the market for larger suites is softer.

Are you a real estate investor thinking it is better to rent out your suite furnished rather than unfurnished? You may think again after hearing what our research and experience has concluded. As President of Downtown Suites Ltd. I am asked this question frequently, so have decided to answer in this videoblog, which pinpoints some of the problems in renting out furnished suites and outlines the benefits of the unfurnished rental scenario.

I also outlined some of these problems in an earlier blogpost.

At Downtown Suites we manage End of Tenancy Notice in an atmosphere of trust, tact and timeliness. Today, I’d like to share more with you on the fine points of the Residential Tenancy Act.

When a rental unit requires extensive renovations or repairs, so extensive that the place would have to be vacant, the landlord may give notice to the tenant. In this situation, the requirement is not one but two months notice. These renovations would also need all the legally relevant permits and approvals before notice could be given. As well, the Residential Tenancy Act says that the landlord needs to intend these repairs “in good faith”, to ensure that this is an actual renovation/repair and not simply a ruse to remove the tenant. In addition, the landlord needs to be aware that the tenant could give ten days notice after receiving this two month notice, with a potential loss of revenue to the landlord.

There are many reasons why an owner might need to give a resident tenant notice to vacate, and landlords should be familiar with the Residential Tenancy Act to understand which of these require two months notice.

Such as: the conversion of the residential property to strata lots, or conversion into a not-for-profit housing coop. Of course, in both of these situations all legal permits must be in place.

Or: if a rental unit needs to be made available for a residential building’s caretaker or manager, two months notice can be given to the tenant of that suite, to make room for the caretaker.

Other permitted reasons for notice include the demolition of the rental unit, and the conversion of the rental unit to another non-residential use. In earlier posts, I’ve gone over the situations related to notice for the purposes of sale.

The 10 days notice scenario:
A tenant receives two months’ notice. He turns around and gives the landlord 10 days written notice for an earlier move-out date. Along with this notice, he pays rent to the landlord, covering the time of notice to the move-out date. However, the landlord has the tenant’s previously paid rent (for a period after that effective date) such as a post-dated cheque for the full month and future months. She must return these funds to the tenant. (This scenario doesn’t apply to a fixed term tenancy.)

At Downtown Suites, we always act with compassion and empathy to the tenants when delivering an end of tenancy notice. At the same time, we want to ensure everything happens without any loss to the property owners if at all possible. An important factor is making sure we have timely delivery of any End of Tenancy Notice, according to the Residential Tenancy Act’s stipulations.

Notice is not always considered “received” on the date is it sent, depending on the way this notice is delivered.

Received on the day of delivery: When a copy of the notice is left directly with the tenant, or left with an adult who apparently lives with the tenant, the notice is deemed to be received on the day it is left.

Received in three days: It is important to know that when a copy is left in a mailbox (or mail slot) where the tenant lives, the notice is not deemed to be received until three days after the day it was left. If the notice is faxed to a number provided by the tenant, it is deemed to be received on the third day after faxing. Similarly, if notice is posted on the door or other noticeable place at the address where the tenant lives, it is deemed as received on the third day after this posting.

Received in five days: When a copy has been sent by regular mail or registered mail to the address where the tenant lives, notice is deemed to be received on the fifth day after mailing.

Many owners following these regulations are surprised to discover that, through no fault of the tenant, the notice was not actually received. Unless the notice is directly handed to the tenant, it is wise to have confirmation of receipt. At Downtown Suites, as soon as we hear from the owner that notice must be given, we send it out by registered mail.

Ending Tenancy after Sale
You have just purchased a home in Vancouver and intend to live in it once the deal is completed. In the eyes of the Residential Tenancy Act, you become an “owner-occupier” and if this home is currently occupied by a renter you are entitled to end the tenancy. There are some things you should know about the procedure.
When an owner-occupier purchases, she must send a letter to the current landlord, on or before the effective date of the notice. The landlord (or the new owner-occupier) is required to pay the current tenant one month’s rent, plus give 60 days notice, served by the end of month.
In this situation, upon receiving this notice, the tenant, on the other hand, only has to give 10 days notice before ending the tenancy.
Often it becomes a negotiation point at the time of sale, deciding who should pay that one month’s rent – the new owner-occupier, or the seller.
There can be a downside to all this for landlords. If you are counting on the rent, and, say, the deal closes August 1, you will need to request in writing to the current owner to serve notice. However, if the tenant immediately after receiving this notice, gives 10 days notice and leaves after the 10th day of the month, the result to you would be a loss of revenue, in addition to the one month rent penalty. In the light of this potential loss of revenue, landlords need to be aware, cautious, and prepared.