Becoming a successful real estate landlord requires some knowledge to avoid financial and legal pitfalls. It seems like what could be easier than advertising your property for rent, quickly finding a tenant, and simply receiving the cash in exchange for the keys? But in practice, leasing out your home can be a rather stressful and time-consuming process. Creating your own tenant checklist will help you save your money, and time, and avoid potential stress.
The tenant checklist for landlords can prove to be a powerful tool in selecting the proper renter for your house. This article will help you understand how to choose a suitable tenant, what checks are done when renting, how to form the list of requirements for tenants, and generate the most appropriate checklist for the landlord.
How to Screen Prospective Tenants
Every landlord is eager to pick the right tenant: one that pays their rent on time, treats the property with care, and is generally an easy-going neighbor. How you will screen renters is mainly up to you, but creating a detailed list of tenant requirements is fundamentally important at the very beginning of your home-renting journey.
To minimize headaches and prevent potential misunderstandings, explicitly discuss all the nuances with a further renter.
Checks On Tenants
It will not be superfluous either if you precisely determine your tenant selection criteria first. Then, carefully choose who you want to rent to. Remember that you need to be able to count on this person not only in terms of timely rent payments but also in keeping your property in a good state of repair.
Moreover, if your further renter is someone with whom you may be living together, get to know their habits in advance, and discuss the rules of living and responsibilities to avoid any unpleasant surprises. Whatever your tenant screening checklist, be sure to apply it consistently to all contenders. And of course a couple of words on this important issue: it would be great if you specifically explore the Canadian Human Rights Act, a federal legislation that primarily addresses discrimination and promotes equal opportunities.
The Canadian Human Rights Act
The Act aims to prevent discrimination in housing on various grounds, including race, national or ethnic origin, color, religion, age, sex, sexual orientation, gender identity or expression, marital status, family status, disability, and conviction for an offense for which a pardon has been granted. The Canadian Human Rights Act is not the primary legislation directly governing landlord-tenant relationships in Canada, but it sets out the principles of equality and non-discrimination that apply broadly to various aspects of Canadian society. The regulation of residential tenancies falls under the jurisdiction of provinces and territories, and each has its own provisions governing the rights and responsibilities of landlords and tenants, typically known as the Residential Tenancies Acts.
Additionally, landlords are generally required to comply with both residential tenancy legislation and human rights legislation to ensure fair and equal treatment of tenants. This will help you avoid inadvertent or intentional discrimination, and pick the most suitable tenant.
·Avail Tenant Screening
In order to play it safe, most experienced landlords often ask an interested contender to fill in an application form and run a credit check on a prospective renter. After receiving their social insurance number and only with the applicant's consent, keep in mind, that you can refer to one of the two Canada’s main credit bureaus – TransUnion or Equifax - and get the tenant’s credit report. Another way you can obtain this data is to resort to tenant screening service tools or turn to specialized agency services to collect the relevant information you need. Furthermore, some of these online tenant screening tools can provide you with additional information on that matter, like income and employment verification, court records, and in the case of trust scores, a detailed risk assessment.
The "Personal Information Protection and Electronic Documents Act" (PIPEDA)
Canada has its own set of laws and regulations related to consumer credit reporting. The key legislation governing credit reporting in Canada is the "Personal Information Protection and Electronic Documents Act" (PIPEDA). PIPEDA is a federal law that sets out rules for the collection, use, and disclosure of personal information by private-sector organizations.
Under PIPEDA, credit reporting agencies in Canada must adhere to certain principles, including obtaining consent for the collection and use of personal information, providing individuals with access to their credit reports, and ensuring the accuracy of the information held in those reports.
In addition to federal legislation, individual provinces may have additional regulations related to credit reporting. For example, in Ontario, the Consumer Reporting Act provides further rules and protections concerning consumer credit reports.
These kinds of services may charge fees, but asking your future residents to purchase a credit report on their own and submit a copy with their application, or to cover the expenses of generally around $10-$30 is a standard practice. Besides, this could play into the landlord's hands by making it clear whether your expected tenant is overall responsible and serious about the rental.
Thoroughly vetting residential tenants will let you know whether they're able to pay the rent on time, so checking their credit histories will provide a great deal of insight into a potential tenant's financial responsibility. The majority of renters require a credit score over a particular threshold and expect a tenant to have income above a certain amount – most commonly to cover two-three-months lease. Some lessors even call the contender's employer to ensure their job placement and confirm they still work there. Typically, it will be sufficient to have a look at payment receipts for the last few months to ensure your renter's paying capacity and avoid financial pitfalls.
Avail Background Check
Apart from credit history and solvency verification, make sure your future applicants have clean background checks and no criminal past. Keep in mind that your potential tenant is first of all a stranger, and always follow safety precautions.
Questions To Ask Previous Landlords
Vetting tenants for rental property may also include a few references from their former landlords. Feel free to have a phone talk with previous lessors: after all, you need to know if they're reliable, pay on time, and carefully treat the living spaces. Don't hesitate to ask uncomfortable questions like whether your future residents smoke indoors or enjoy noisy parties. Also, specify in advance whether pets are living in the home. In case you'd prefer to incorporate a pet deposit or ban pets from your rental property, consider your local laws on this issue.
Tenant Documents For a Landlord
Once the tenant seems suitable, expert lessors precisely discuss an appropriate schedule of rental payment beforehand and often ask for an acceptable security deposit. There are regulations around security deposits, including the amount that can be charged, the conditions under which it can be withheld, and the timeframe for its return. An equally essential step, however, is to prepare all renting documents and to protect your residents' security bond. Consider that as a landlord you are obliged to refund your renters their security deposit upon expiration of the lease. It's highly recommended to open a separate untouchable account, given that such a procedure is even legally required in particular jurisdictions. Although you can invest some of that funding on repairs, relevant documents of how that money was spent shall be provided within the legally prescribed period. Normally, this statutory-defined deadline covers 30 days, but it varies regarding the province.
Needless to say, you'll need to legalize the rental with your tenants. Landlords are generally required to provide tenants with a written lease agreement that includes terms and conditions of the tenancy, such as rent, rules, and responsibilities. Besides, some provinces and territories have rent control measures in place to limit how much landlords can increase rent during a tenancy. Therefore, primarily ensure that you carefully examine landlord-tenant laws and policies, especially your local laws, as they can vary by province and territory. Ask your local housing authority for clarification of property, security deposits, or notice periods for rental termination issues. Speaking about the state of your rental house, it's advisable to take photos of your property's condition before the future lodgers move in. This will account for truthful evidence that property damage, if any, didn't exist earlier.
Your landlord checklist before renting should inevitably include reviewing such laws as the Residential Tenancies Act (RTA) and the Landlord and Tenant Board (LTB), as regards Ontario. Note that the landlord-tenant laws in Canada are governed by provincial and territorial legislation, and each region has its own set of rules. So it's crucial to verify with the latest legal sources in the respective province or territory.
The Landlord and Tenant Board (LTB)
For instance, the Landlord and Tenant Board (LTB) operates in the province of Ontario. The LTB is a government agency responsible for assisting landlords and tenants in resolving disagreements related to their residential tenancy through various processes, including mediation and adjudication. This may involve issues such as rent arrears, maintenance problems, eviction notices, and other disputes covered by the Residential Tenancies Act. The LTB provides information and resources to landlords and tenants about their rights and responsibilities under the RTA.
It's important to mention that the Landlord and Tenant Board specifically applies to Ontario, and other provinces and territories may have specific legislation and authorities responsible for handling similar landlord-tenant matters. You can typically find this information on the government website of the respective region you are interested in, or consult with a legal professional for advice tailored to your situation.
The Residential Tenancies Act (RTA)
The Residential Tenancies Act is commonly used to refer to the legislation that outlines the rights and responsibilities of both landlords and tenants. These acts typically cover the relationship between landlords and tenants in the residential rental areas such as lease agreements, rent payments, maintenance and repairs, landlord and tenant responsibilities, eviction procedures, and more. However, the specific name and details of the act can vary by province or territory, as each RTA can have unique provisions and regulations. Additionally, keep in mind that legislative names or details may change, so it's advisable to verify with the latest sources.
Consult with a qualified lawyer to help you legally document the landlord-tenant rental agreement, and ensure there are no legal loopholes that you didn't account for.
Minor Issues Matter
It is crucially important that you start hunting for a tenant only when you are ready to show your estate. Be ready for your prospective renters will critically evaluate every corner of your seemingly perfect property. To properly prepare your home for the rental market, do a major cleanup to make it shine from the basement to the attic. Undoubtedly, a poorly maintained accommodation will reduce the price of your rental. Therefore, take the time to perform small repairs you might get used to postponing. As soon as you boost the attractiveness of your home space, be always ready to welcome potential renters.
Key Tips To Follow
- Prospective landlords have extensive rights and responsibilities, as well as potential tenants do. Therefore, it is absolutely necessary to check out several pieces of legislation such asthe Residential Tenancies Act (RTA), the Landlord and Tenant Board (LTB), as regards Ontario, the "Personal Information Protection and Electronic Documents Act" (PIPEDA), and the Canadian Human Rights Act.
- When screening your potential tenants, avail a thorough background and credit history check to avoid any further challenges.
- During the tenant vetting feel free to ask for some references from your future renters' employers and former landlords.
- Renting a house often comes along with unexpected expenses, so consider reserving some cash to cover unforeseen costs such as unexpected repairs. Besides, you owe to return your lessee's security deposit when your lease agreement ends.
- - Peak seasons play into your hands to rent out your property more expensive than the market price. Consider locating a tenant from July through September to earn the most.
- If you are a lucky owner of accommodation near a beach, on a cozy pond, or near another seasonal location, don't hesitate to investigate short-term rental platforms.