LANDLORDS: Know your rights

Rental of your property is a business, not a non-profit organization

Embarking into the business of investment properties and apartment rental can have rewarding financial benefits for some people, for others it can be a nightmare.
Investment properties are an excellent source of passive income; it’s also a good way of creating a good retirement nest. But there are some people who prefer renting instead of purchasing a home and do not want to have the headache of having a mortgage and maintaining a home. Before renting apartments to individuals there is homework to be done. I strongly recommend a thorough credit check on that potential tenant regardless of who might have referred them to you.
This might sound insensitive, but business is business. Do not rent out of sympathy. I’ve heard statements like: She came with a young baby in her arms, my mother died, my child is sick, my welfare check is coming, and the best one is “my ex-landlord threw me out with my young baby”, etc. As cold as it might seem to some, these are all gimmicks to get you to rent them your apartment, but as soon as the lease is signed, the first month’s rent might be O.K., but following that the nightmare begins. People like these have no scruples. They know very well that they cannot afford to pay the rent but they devise tactics to tug at your heartstrings and you fall prey to it.
Unfortunately, because numerous landlords have not done their homework, the situation deteriorates and the perpetual saga ends up as one of the many court cases at the Régie du logement. Some of these situations could have been avoided by adhering to simple protocols.
Doing a thorough credit check by a reputable company involves digging into the payment history of the potential tenant. Yes, one would say it is private, but it’s necessary. The research must be done by a professional organization; the report will be comprised of the payment habits of the individual, such as cell phone and home phone bills, light bills, criminal records filed in court and/or any court cases that might be pending at the Regie du logement, credit card payments, employment records, references from the last two or three landlords, and most importantly credit score.
With such a complete report you the landlord will decide whether to rent to this individual or not. If the potential tenant refuses to allow you to do a credit check, it is an indication that something is wrong. Beware!
The Regie du logement du Québec states in Article 1855 of the Civil Code of Quebec that, “The tenant’s principal obligation is to pay the rent in full, usually the 1st of every month…” It continues, “The tenant is in default, as of the next day following the date that the rent should be paid. Once the tenant is in default (of payment) it’s the landlord’s rights to send a registered letter to the tenant, mentioning on the letter (WITHOUT PREJUDICE – First Warning), along with a copy of the article 1855 of C.c.Q., and immediately file an application with the Regie to recover the rent owing, interest, and the costs related to the application. If the tenant is late a second time, the landlord should immediately send a second warning to the tenant, and retain a copy as proof.
The mistake some landlords make is ignoring the first late payment, the second, and before realizing what’s happening, the third late payment is committed like a thief in the night. The landlord now scrambles to file an application at the Regie already three months late, and by the time the application is filed the case is scheduled, the landlord might be six months in arrears.
The Régie also states, “more than three weeks late, the consequences can be more far-reaching. Not only can the Landlord request that the tribunal order the tenant to pay the rent and other costs, but also the annulment of the lease and the eviction of the tenant and the other occupants.”
At the signing of the lease, everything agreed upon between landlord and the prospective tenant should be clearly written on the lease. The Regie du logement lease is a legal document created to protect both the landlord and the tenant, hence the reason there are different sections indicating what is and is not permitted in the dwelling.
Careful attention should be taken when filling out a lease, some of which is clearly indicated in that document. Failure to complete certain sections is risky and can be problematic for both parties in case of litigation.
So, (prospective) landlords, investing in rental properties is still a good source of long-term income; but exercise your rights professionally, treat your tenants as clients, manage your investment property as a serious business, and follow the legal protocols.
I AM YOUR REALTOR AT (514) 947-8240.