As a new landlord, are you doing your homework?
Here are a few reasons why anybody may want to become a landlord:
- help to pay a mortgage
- get an extra income
- save money for future improvements or renovations of the dwelling
In a cosmopolitan environment as the GTA, before you begin with this endeavour, it’s your obligation to make a plan that can limit the problems that you might have with some of your tenants.
An old traditional way of meeting a person, having a friendly conversation agreeing with the terms of the tenancy and then shaking hands is no longer the right way.
Read the Law
All residential tenancies in Ontario are regulated by the Residential Tenancies Act, 2006, and the Rental Fairness Act, 2017: they do include the obligations that every landlord in Ontario must abide to.
Know formalities about your potential tenant
Do a proper investigation of your future tenant and prepare a list of the questions that you need to ask yourself before entering into a rental agreement.
- Do you know what information you may request from your prospective tenant, according to the Human Rights Code, Regulation 290/98?
- Does your prospective tenant have a good credit history; are you aware that before doing any credit check, you will need the authorization from the person involved?
- Does your tenant has a full time employment or if not, are they receiving a monthly allowance from the government that can be sent directly to you?
- Is the potential tenant willing to provide you with the information about their employment (address, phone numbers, emails, names of the supervisors, etc.)?
- Are you ready to make a thorough check out of that information, including the possibility to go to the address stated in the application in order to confirm?
- At the time of starting the tenancy, are you prepared to request first and last month deposit in guaranteed funds?
- How many tenants will be part of the Lease; will there be any other occupants living in the unit?
- Do you understand your rights and responsibilities stated in the Standard Lease (Form 2229E) that by Law, you must prepare at the time of agreeing to rent the unit?
NOTE: The requirement to use the standard lease does not apply to all tenancy agreements. Exceptions include: co-op member units; care homes; sites in a mobile home park and land lease community; most social housing units. For care home rental arrangements, a written rental agreement is required but the landlord is not required to use the standard lease form (http://www.sjto.gov.on.ca/ltb/faqs/#faq2).
Depending on the kind of tenancy you may get into, find the best way to make a list of the reasonable information you need from your prospective tenant.
There is a Latin proverb that says: Verba volant, scripta manent – “spoken words fly away, written words remain.”
Therefore, if you offer any extra services or make any changes in the original lease, do it always in writing and keep in the tenant’s file.
Finally: as a new landlord you need to understand that sooner or later you will have some problems along the way, but if you fulfill your obligations under the Tenancy Act, you will minimize or solve them fast.
By Carlos Perdomo, Licensed Paralegal
To be continued