Newbie Landlord Questions

[The BMW Guy]

I have some questions that I was hoping I can get answers on as I am going to become a first-time landlord. Some questions might be very obvious but I'd just like to confirm so everything is clear.

1) If a tenant or landlord breaks a lease, what is the typical penalty charged?
2) Do I get utilities in my name first when taking possession of the property? If so, to transfer the utilities to the tenant do they simply just call the utility companies?
3) Is it standard practice to confirm the pay of an applicant?
4) Is it standard practice to perform credit checks on an applicant? If so, is there a certain credit score you look for?

[spikerS]

1) it varies a lot, very dependant on the situation
2) Up to you. I know some landlords keep the utilities in their name, but I have always had it in my name when renting
3) & 4) I would not bother. What I would look for is recent previous landlord contact info to find out how the tenants were, if rent was paid on time, house condition at time of move out, etc. That is the important info. References are key.

Screen your tenants. Interview them. Know and understand the type of tenant you want to attract, and don't settle.

[The_1]

Do not keep utilities under your name
Make sure they call in and get it setup themselves

[ExtraSlow]

Utilities under tennants name for sure.

[DeleriousZ]

If the tenant breaks the lease, I -think- the tenant is still on the hook for the remainder of the lease, but it's up to you whether you want to charge that or not. Depending on if they're a good tenant or not people usually work something out. In my GF's case she broke her lease 3 months early and ended up only forfeiting her damage deposit to do so, and was off the hook for the remaining rent owed for the last 3 months.

[spike98]

Originally posted by DeleriousZ
If the tenant breaks the lease, I -think- the tenant is still on the hook for the remainder of the lease, but it's up to you whether you want to charge that or not. Depending on if they're a good tenant or not people usually work something out. In my GF's case she broke her lease 3 months early and ended up only forfeiting her damage deposit to do so, and was off the hook for the remaining rent owed for the last 3 months.

I believe this is incorrect. The DD is for damages and AFAIK not to be used to compensate for lost rent. If a tenant breaks the lease early, it is up to the landlord to put in a reasonable effort to re-rent the property. Only until the landlord is unable to recover lost rent after reasonable effort can the landlord be eligible for damages. And those damages must be collected through small claims.

Lots of landlords put in a clause in the rental agreement that to terminate the contract you must pay XXXXX or blah blah blah but i believe that its against the Landlord Tenant Act and thus void.

NOTE: This is information that i gathered from an experience by a family member (landlord) and calling the landlord/tenant hotline. Its still possible that i was mislead.

EDIT:


If a tenant ends a fixed term tenancy before the termination date, the landlord is entitled to be paid rent from the tenant until the residential tenancy agreement ends. However, the landlord must take reasonable steps to re-rent the unit. If the landlord rents the premises to a new tenant, the old tenant is no longer responsible to pay the rent from the date of the new tenancy.

http://www.servicealberta.ca/pdf/RTA/12TERMINATION_OF_A_TENANCY.pdf

[Seth1968]

Originally posted by spikerS
1) What I would look for is recent previous landlord contact info to find out how the tenants were, if rent was paid on time, house condition at time of move out, etc. That is the important info. References are key.


Is it really though?, as I suspect shitty tenants would have fake references. You know, pay a buddy $20.00 to claim. "He lived in my basement suite for three years and never was a problem".

[jabjab]

I had rented to a female before and her cheque bounced and I could'nt contact her for almost a week. I did my call up previous landlords and they said she was always on time.

I went to the unit out of worry that she might be dead and found her sex toys all over the place. I left a note on the door saying I'm worried and she contacted me the next day with payment

[GTS4tw]

Originally posted by Seth1968


Is it really though?, as I suspect shitty tenants would have fake references. You know, pay a buddy $20.00 to claim. "He lived in my basement suite for three years and never was a problem".

Some people ask for the name and address of the previous landlord, then check to make sure they are actually the owner of the property. Or you might be able to look them up on Facebook nowadays to see if they are "friends" with their reference.

I personally think you can learn a lot by having a good conversation with someone, ask them lots of specific questions about life in general. that will give you that gut feeling one way or the other. That is more reliable than references imo. It is easy to lie about what you do, how much you make, etc, much harder to keep that charade up when the questions get more specific.

[Seth1968]

^ Good points.

[pheoxs]

Why do people prefer to have the utility bills in the tenants names? Are you not concerned that they just stop paying the bills and it ends up coming back to you with huge fees?

If you provide bills monthly and they pay it on top of their rent does that not stop you from finding out they haven't paid the water bill in a year and you end up with a 1k$ bill as the homeowner?

[jabjab]

Originally posted by pheoxs
Why do people prefer to have the utility bills in the tenants names? Are you not concerned that they just stop paying the bills and it ends up coming back to you with huge fees?

If you provide bills monthly and they pay it on top of their rent does that not stop you from finding out they haven't paid the water bill in a year and you end up with a 1k$ bill as the homeowner?

I think that when they go and sell the property they can say that it was their primary residence since the bills were in their name and avoid any captial gains taxes.

[benyl]

Originally posted by pheoxs
Why do people prefer to have the utility bills in the tenants names? Are you not concerned that they just stop paying the bills and it ends up coming back to you with huge fees?

If you provide bills monthly and they pay it on top of their rent does that not stop you from finding out they haven't paid the water bill in a year and you end up with a 1k$ bill as the homeowner?

Enmax, etc. will do credit check on the tenant.

Also, if the tenant doesn't pay, Enmax goes after them. Why would you want the burden of trying to get money from someone who doesnt want to pay it? Enmax can just deny service at the next place they rent. You can't do that.

If they start running a grow-op and their bill goes to $2K / month, they take off, you are now responsible for paying Enmax. If it is in their name, Enmax has to eat that $2K.

[pheoxs]

Originally posted by benyl


Enmax, etc. will do credit check on the tenant.

Also, if the tenant doesn't pay, Enmax goes after them. Why would you want the burden of trying to get money from someone who doesnt want to pay it? Enmax can just deny service at the next place they rent. You can't do that.

If they start running a grow-op and their bill goes to $2K / month, they take off, you are now responsible for paying Enmax. If it is in their name, Enmax has to eat that $2K.

I suppose that makes sense, I was thinking they would put a lien against the house or something for unpaid bills but if they just go after the tenant then it makes more sense.

[Nufy]

Quick question about breaking leases...I think.

House next to mine was a rental. Owner sold the property and gave the required 3 months to the tenant in order to give them ample time to find a new rental.

New owners wanted to move in ASAP but owner was trying to be considerate to the tenants. Hence the 3 month notice.

Tenants find a place after a month and move out leaving owner with 2 months of mortgage payments and no rental income.

Owner held back damage deposit due to tenant breaking lease.

Tenants then went batshit crazy and did damage to the house.

Burned their rental agreement on the kitchen counter for example.

In the end owner kept damage deposit but had to pay for repairs caused by tenants.


Who is right in this situation ?

[GTS4tw]

Originally posted by Nufy
Quick question about breaking leases...I think.

House next to mine was a rental. Owner sold the property and gave the required 3 months to the tenant in order to give them ample time to find a new rental.

New owners wanted to move in ASAP but owner was trying to be considerate to the tenants. Hence the 3 month notice.

Tenants find a place after a month and move out leaving owner with 2 months of mortgage payments and no rental income.

Owner held back damage deposit due to tenant breaking lease.

Tenants then went batshit crazy and did damage to the house.

Burned their rental agreement on the kitchen counter for example.

In the end owner kept damage deposit but had to pay for repairs caused by tenants.


Who is right in this situation ?

Owner is in the right no matter what by the end of this story. It's never ok to damage someones property, if you disagree with them take them to court.

[Disoblige]

Wow, owner of the house is a douche. Gives the renters 3 months notice, yet the renters need to pay the 3 months even if they find a suitable place for them earlier? Dumb as hell.

Tenants are in the wrong for damaging the house for sure though.

[Nufy]

Originally posted by Disoblige
Wow, owner of the house is a douche. Gives the renters 3 months notice, yet the renters need to pay the 3 months even if they find a suitable place for them earlier? Dumb as hell.

Tenants are in the wrong for damaging the house for sure though.

So would you suck up the final two mortgage payments.

As I think about it I believe the tenants agreed to the three months but found a place earlier.

Moving up possession date was not an option.

[88CRX]

1) If a tenant or landlord breaks a lease, what is the typical penalty charged?
- They pay until the lease is done. In this market it's not a issue to worry about as renters will be lining up.

2) Do I get utilities in my name first when taking possession of the property? If so, to transfer the utilities to the tenant do they simply just call the utility companies?
- Call the utility companies and let them know your the owner and that you plan on renting to someone, give them tenant contact information and then tell tenant to call a week before they're taking possession to set everything up in their name.

3) Is it standard practice to confirm the pay of an applicant?
- I confirmed employment of my tenants by google searching their company name and calling that phone number, not the one they put on application form. Ask lots of questions.

4) Is it standard practice to perform credit checks on an applicant? If so, is there a certain credit score you look for?
- I asked all potential renters if they're OK with me doing a credit check. I never did the check but you get all the information you need from how they answer that question. 'Umm... uhhhh... I don't really have any credit.'

I was nervous going into renting my townhouse out but once you start interviewing people you get a pretty good feel for the type of people you do and don't want to rent to. And don't worry about not having enough people to choose from, you'll be beating them away with a stick as soon as it's posted on rentfaster.

[cam_wmh]

Originally posted by Nufy
Quick question about breaking leases...I think.

House next to mine was a rental. Owner sold the property and gave the required 3 months to the tenant in order to give them ample time to find a new rental.

New owners wanted to move in ASAP but owner was trying to be considerate to the tenants. Hence the 3 month notice.

Tenants find a place after a month and move out leaving owner with 2 months of mortgage payments and no rental income.

Owner held back damage deposit due to tenant breaking lease.

Tenants then went batshit crazy and did damage to the house.

Burned their rental agreement on the kitchen counter for example.

In the end owner kept damage deposit but had to pay for repairs caused by tenants.


Who is right in this situation ?

100% the owner. You left out an important piece -- the original lease likely ended many months ahead of the 3 months.

Those final 3 months, are month to month. He arbitrarily changed the lease -- from fixed, to an end date in 3 months. Thus, the tenants recognized they had to quickly find a new home. They were able to do so within 1 month, and gave their notice. Paying the mortgage alone for 2 months, is the cost of doing business.

Actually, I believe the tenants could've sued for damages, due to the owner changing the lease.


What the tenants did in reaction was wrong, but hardly unexpected.

[Disoblige]

Originally posted by Nufy


So would you suck up the final two mortgage payments.

As I think about it I believe the tenants agreed to the three months but found a place earlier.

Moving up possession date was not an option.
If they agreed to the 3 month lease remaining, then that's different. But something tells me that this wasn't the case if they were so pissed about their damage deposit being kept. Maybe a misunderstanding?

[revelations]

Credit check is the BIGGEST factor IMO when it comes to rentals. I dont touch anyone with a FICO score below 700.

The credit score is an excellent indicator of a persons overall reliability and character IMO. The chances of a person being a deadbeat with a score of >700 is almost zero.

As a landlord, you will have your choosing of tenants with a score above 700 in this market.

[Nufy]

Originally posted by cam_wmh


100% the owner. You left out an important piece -- the original lease likely ended many months ahead of the 3 months.

Those final 3 months, are month to month. He arbitrarily changed the lease -- from fixed, to an end date in 3 months. Thus, the tenants recognized they had to quickly find a new home. They were able to do so within 1 month, and gave their notice. Paying the mortgage alone for 2 months, is the cost of doing business.

Actually, I believe the tenants could've sued for damages, due to the owner changing the lease.


What the tenants did in reaction was wrong, but hardly unexpected.

Not sure on the details. Just what the landlord told me one day so the facts are probably skewed in her favor.

Personally I am glad they are gone. The mom was a nasty bitch.

[Disoblige]

Originally posted by cam_wmh


100% the owner. You left out an important piece -- the original lease likely ended many months ahead of the 3 months.

Those final 3 months, are month to month. He arbitrarily changed the lease -- from fixed, to an end date in 3 months. Thus, the tenants recognized they had to quickly find a new home. They were able to do so within 1 month, and gave their notice. Paying the mortgage alone for 2 months, is the cost of doing business.

Actually, I believe the tenants could've sued for damages, due to the owner changing the lease.


What the tenants did in reaction was wrong, but hardly unexpected.
I assume you're saying the owner is the one who's wrong. Because Nufy was asking who's in the right but your response confused me.

[cam_wmh]

Originally posted by Disoblige

I assume you're saying the owner is the one who's wrong. Because Nufy was asking who's in the right but your response confused me.

%100, the owner is at fault.

He arbitrarily change the terms of the original lease.

[firebane]

For the utilities part my landlord has kept them in his name and the utilities are put into the cost of rent.

The utilities included are everything essential but things like phone, cable etc are the responsiblity of us.

Personally I like it this way and keeps things simple.

[lint]

Originally posted by cam_wmh
%100, the owner is at fault.

He arbitrarily change the terms of the original lease.

the owner didn't arbitrarily change the lease, the property was sold. the lease doesn't extend to the new owner.

[cam_wmh]

Originally posted by lint


the owner didn't arbitrarily change the lease, the property was sold. the lease doesn't extend to the new owner.

I'm foggy on the legal implications to the new owner, but it does befall the previous owner, whom signed it -- and the tenant could sue for damages.

When the previous owner sold the home, he did so under the pretence of an an existing lease.

The owner didn't get suddenly blind-sided by his own self selling the property.

He knew of the original lease.
He knew of the sale date.
They did not align.

[pheoxs]

Originally posted by cam_wmh


I'm foggy on the legal implications to the new owner, but it does befall the previous owner, whom signed it -- and the tenant could sue for damages.

When the previous owner sold the home, he did so under the pretence of an an existing lease.

The owner didn't get suddenly blind-sided by his own self selling the property.

He knew of the original lease.
He knew of the sale date.
They did not align.

It depends on the lease, you can't know without reading the details.

Leases should have penalties and necessary notice in them.

If it specifies that the landlord can give 3 months notice to cancel the lease then the landlord is perfectly fine in doing so.

If it specifies that the tenant needs to give 1 months notice (common for month to month leases) then the tenant was right up until the point the landlord kept the damage deposit. The tenant is still in the wrong for damaging the property regardless.

[cam_wmh]

Originally posted by pheoxs


It depends on the lease, you can't know without reading the details.

Leases should have penalties and necessary notice in them.

If it specifies that the landlord can give 3 months notice to cancel the lease then the landlord is perfectly fine in doing so.

If it specifies that the tenant needs to give 1 months notice (common for month to month leases) then the tenant was right up until the point the landlord kept the damage deposit. The tenant is still in the wrong for damaging the property regardless.

Well of course, that's quite obvious.

The caveats (any) weren't shared, so I'm basing it upon them not being included.

[Little Dragon]

What's the go to place you all use for credit reports?

[Black Gts]

[i]Originally posted by revelations
Credit check is the BIGGEST factor IMO when it comes to rentals. I dont touch anyone with a FICO score below 700.

The credit score is an excellent indicator of a persons overall reliability and character IMO. The chances of a person being a deadbeat with a score of >700 is almost zero.

As a landlord, you will have your choosing of tenants with a score above 700 in this market.

That's pretty funny, I can see where you're coming from but my score was stuck at 640 for years with no late payments in over 5 years. It took a massive jump when I bought a house . I agree you have to weed them out somehow But an asshole is an asshole regardless of credit score.

[FraserB]

Originally posted by Nufy
Quick question about breaking leases...I think.

House next to mine was a rental. Owner sold the property and gave the required 3 months to the tenant in order to give them ample time to find a new rental.

New owners wanted to move in ASAP but owner was trying to be considerate to the tenants. Hence the 3 month notice.

Tenants find a place after a month and move out leaving owner with 2 months of mortgage payments and no rental income.

Owner held back damage deposit due to tenant breaking lease.

Tenants then went batshit crazy and did damage to the house.

Burned their rental agreement on the kitchen counter for example.

In the end owner kept damage deposit but had to pay for repairs caused by tenants.


Who is right in this situation ?

Let's operate on the assumption that there was a monthly periodic tenancy in place at the time.

- The landlord was correct in providing 3 months notice to end the tenancy. This is in line with the guidelines set out by the RTA

- The tenants did not provide the requisite amount of notice to end a monthly periodic tenancy. They would have needed to give 1 month's notice to the landlord of their intent to leave.

- The landlord did not act in accordance with the RTA when he withheld the damage deposit in order to recoup unpaid rent. Should have been handled as a claim in small claims for the last month of rent.

- Tenants are in the wrong for doing willful damage to the property.

If there was a fixed term occupancy in place, then the tenants do not need to leave, even in case of sale, until the term is over. If the landlord wants to end the tenancy early, he can request it and seek the agreement of the tenants, but they don't NEED to agree.

[Nitron88]

Originally posted by revelations
Credit check is the BIGGEST factor IMO when it comes to rentals. I dont touch anyone with a FICO score below 700.

The credit score is an excellent indicator of a persons overall reliability and character IMO. The chances of a person being a deadbeat with a score of >700 is almost zero.

As a landlord, you will have your choosing of tenants with a score above 700 in this market.

This is funny. In theory it is correct but the number of inexperienced landlords that jumps on the first candidate that walks through their door without any type of background check is mind blowing. I lose many candidates to these retards. :banghead: