A Landlord Refresher: Screening Tenants

I just came across a story about someone who has rented three places in the last three years with fake references and credit reports. The Equifax report that the tenant supplied was doctored and the references were all friends of the scammer.

Landlords, please pay for a credit report when screening tenants.  If you are renting your place out with the help of a licensed sales representative or broker, ask them to pay for a new report.  The report that tenants pull up doesn’t have payment factors and you can’t verify that the report has not been doctored. If you order your own, you’ll see all kinds of information like aliases, former addresses and employers.  These are all things that can be used to verify that the rental application was filled out correctly. If an applicant doesn’t want you to run a credit report, don’t rent to them.

If the credit score is in the 800s, you have yourself a star applicant and someone who is likely to pay rent on time every month.  Someone in the 700s is likely also great.  Someone in the 600s may have had some trouble paying bills in the past or may just have thin credit, or not a lot of credit history, which is more common with young people.  A lot of tenant applicants score in this zone, so you’ll have to satisfy yourself with each particular applicant using all of the other information.

If someone applies to rent your place and they are selling their home because they are in trouble, their score may be low and you must decide if you are willing to take this risk.  What does their current home look like?  And, just because that home is well maintained, doesn’t mean they won’t damage yours.  And just because they will have a large infusion of cash at the closing of their home, doesn’t mean they will pay rent on time every month.  Sticking to an over 650 rule will likely help weed out any applicants who don’t pay their bills on time, but it’s not a guarantee.

If an applicant lies on an application, don’t rent to them. Verify that you have the correct Landlord for their previous or current home.  If the wrong name is listed for a reference, this is not someone that you want to rent to.  It’s easy for sales representatives and brokers to verify this information, so it’s probably best to involve a professional who has had lots of experience with rentals.

A google search will pull up all kinds of information including verification of the applicant’s place of employment. You can also google the name on the employment letter and make sure that the person who signed the letter actually works for the company. I also call the company using a number that I’ve looked up myself instead of the number provided by the applicant.

One last tip is when you are handing over keys, ask for identification.  Is the person who is getting the keys the same person who you are renting to?  Is the last name different?  If so, I would ask why.  Check the identification from everyone on the lease. People who use aliases don’t make good tenants.

When you move in a good tenant, you’ll get your rent paid on time every month.  But keep records, just in case things change. If a tenant suddenly asks to change the date when rent is due, say “No”.  It’s usually fine to let one month come in later, but changing the date from now until the end of the lease is usually a sign of trouble to come.  Keep all NSF cheque records. And if you are missing one whole month of rent, please follow up with the correct paperwork so that if you end up in a Tribunal, all of your ducks are in a row.  That paperwork is the topic of another blog, but you can find everything you need on the Social Justice Tribunals webpage.  http://www.sjto.gov.on.ca/ltb/

 

 

 

 

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Proposed Landlord Licensing in Oakville

The Town Council has asked their staff to come up with some options to “enhance tenant health and safety and protect and maintain stability of residential areas” which has resulted in a proposed by-law that, in my opinion, contravenes human rights legislation as well as the Residential Tenancies Act.

Rooming houses are the only type of residential housing that is currently regulated in Oakville.  And some concerns may stem from some homes being modified to include too many bedrooms and renting to too many people which also results in parking issues.

 

But the proposed by-law is going to negatively affect landlords and tenants in single family homes now referred to as Class A.

One of the restrictions is bedroom size for an adult which should, according to the proposal, be 14 square meters, which is a 12′ x 12′ room approximately.  The building department approves bedroom sizes much smaller than this for brand new homes, so it’s fine for your adult relative or friend to sleep in a 9′ x 9′ bedroom if you own the house, but not fine if you are renting.

 

And something that someone needs to consider is that under human rights legislation, we are NOT allowed to ask the age of the occupants.  We are not allowed to discriminate.  Will Oakville by-law enforcement officers be allowed to discriminate? And what happens when one of my tenants moves an extra adult into the home? I cannot evict that person but I assume I would lose my license for that rental.  What happens to the tenants? Will the Town evict them?

 

If you own a rental property in Oakville you would have to get a license which would require a police check … for you.  Do not attempt to get a police check on a prospective tenant because this is not allowed and nor should it be. If a corporation owns the rental property, any shareholders with over 30% ownership will need a police check.

 

You’ll have to dig up your deed and provide it with the application for the license.  With current technology, the town staff should have access to land registry information and the tax roll so you would think that would be enough to verify that it is in fact the owner of the home who is applying for a rental license.

 

If a corporation owns the home, you’ll have to provide articles of incorporation and a shareholder list. Nevermind that you had to provide that when you purchased the home, you’ll have to do so again.

You’ll have to have an HVAC and an ESA inspection.  If the house wasn’t built within the last two years, imagine all of the items that the ESA inspection will come up with as the code has changed significantly.

 

For instance, under the current code, every bedroom must have a wired smoke detector in the bedroom with a strobe light.  The cost for each detector is around $250 plus the re-wiring and drywall repair work.  Are you required to change this in your own home where your own children sleep?  No. But you may be required to add this to your rental property.  Are there 20 amp breakers for your own kitchen receptacles?  If not, you won’t need to change to these unless you renovate with a permit (which is the only way to renovate), but you may be required to change this for the rental property.

 

Rental properties will be classified into 4 different categories.  This is from the Town’s website: https://www.oakville.ca/townhall/residential-rental-housing.html

“Possible classes of licences include

  • Whole Home (Class A) – The entire home is rented out under a single lease.
  • Non-Owner Occupied (Class B) – Rental units in a house not occupied by the owner.
  • Owner Occupied (Class C) – Owner rents out one or more units in a house they are living in.
  • Lodging House (Class D) – A building, or part of a building, in which people rent rooms, with or without meals included.”

I propose that the Town eliminate Class A from the by-law.  Get us to register our rentals if you want so that you know who to contact if any neighbours complain about current by-law infractions, but all of these other rules just deter good landlords from owning rental property in the Town of Oakville, which is why I find this proposal so concerning. Does Oakville not want any residential housing? The Town’s website talks about how residential housing is impacting some Oakville neighbourhoods.  There are people who want to live in Oakville who can’t afford to buy their own home, so they rent.  These are good people who are “affecting residential neighbourhoods”.

 

If the problem truly is rooming houses, then enforce the current by-law and leave our single family tenants and homes alone. Our tenants have the RTA, the human rights code and the fire code to protect them.

If you want to provide feedback, you can write to the town (like I did) at enforcementservices@oakville.ca.  The by-law will be presented at the council meeting on Monday November 6, 2017.