Removal of low paying assumed tenant

[IMSTOCK]

I purchased a property about 2 years ago and all of the units except one was vacant. I have renovated the others and am charging market rent on them.



The tenant I assumed is still several hundred dollars below market rent for that unit, plus I would really like to do some renovations in this unit however I dont want to do it with this current tenant living there.



I have thought about giving the N13 but that doesnt exactly fit the situation, plus they would still be given first right of refusal.



Only other thing I can think of, is increasing the rent by the allowed 2.5% per year, which would take me 10 years to get to where I would like it to be and by then the market rent would likely already be higher than this.



Im doubting the tenant has any plans on moving anytime soon as they know they have it made, and the rent has been paid on time from the very beginning.



Any other thoughts or suggestions would be appreciated.



Thanks in advance

 

[Thomas Beyer]

[quote user=IMSTOCK]

Any other thoughts or suggestions would be appreciated.
I assume this is Ontario



One can always offer an incentive, say $2000 to $5000 to move out.



The only other solution is to vote for a more landlord friendly provincial government.

 

[IMSTOCK]

A good idea Thomas, and hahaha agreed.

 

[invst4profit]

Is there any possibility of issuing a N12. Do you have a son, daughter, mother, father that would be willing to move in for a year.



If not I would issue a N13 and wait see if the tenant REQUESTS to move back into the unit when renovations are completed. It is the tenants responsibility to indicate their intent to move back in before they vacate the unit. If they inform you they do want to move back then simply cancel the N13 before you actually file it and tell the tenant you have changed your mind and have decided not to renovate.



This will some times work if the tenant either does not know they can move back or do not want the hassle of moving twice.



If you are stuck with the tenant then you should be raising the rent immediately by 2.5%. The fact is all tenants should be receiving annual rent increases regardless. This saves the hassle of having to pay interest on their LMR deposit.

Expenses are rising faster than the rent increase amount so annual increases are necessary and tenants should expect them.

You could also apply for a above allowable rent increase if your taxes have increased beyond the threshold point.



Other than that you can only make the tenants life difficult and hope they decide to move.

 

[IMSTOCK]

Unfortunately I dont have the ability to issue an N12, however yes I am still thinking about the N13.



I just dont know if there are guidelines that go along with it, such as a maximum amount of time I am allowed to take for the renovations or anything of that nature.



I was thinking of issuing both the rental increase then the following month the N13.

 

[invst4profit]

I would do the notices the other way around. If they move, following issuing the N13, without indicating (in writing) that they want to move back you are good to go. If they want to move back after reno you cancel the N13. In that case you then issuing a rent increase notice beginning the process of sending the message that you do not want them as tenants.

After that there are a number of things you can do to further apply sociological pressure to encourage them to decide they want to move.



As far as time periods are concerned for the reno it is not really important as there is no point in doing renovations on a unit with below market rents. If you can not dump the tenant they can stay in a aging unit until they get the message.

 

[markl]

I would use the N13 you can increase the rents after renovations have taken place above the normal guidelines. This is typically how we have gotten people out when they are severely under market.

 

[jonathanb]

[quote user=markl]

I would use the N13 you can increase the rents after renovations have taken place above the normal guidelines. This is typically how we have gotten people out when they are severely under market.







I am just curious how this works. After renovations, are you free to set your rent at whatever you decide and have your existing tenant either pay, or not return? Or must it be market rent? And does the board decide this? Or could you use the other units in the building as a benchmark?



Either way, very good advice in the posts above.



Jon

 

[invst4profit]

Above guide line rent increases are based on capitol expenses (renovation costs). The Board will allow a landlord a maximum above guide line increase of 9% (regardless of total capitol expense) but this is restricted to a maximum of only 3% above annual guideline in any given year.



In reality this does not allow a landlord to recoup reno costs very quickly which is why when dealing with tenants paying below market rents it is not worth renovating there units until they leave.