Units left dirty/damaged - how can we cover the cost?

[surfermoe]

Hi folks,



We own several rental properties in Ottawa, and sometimes when tenants leave at the end of their lease the unit is dirty or has nicks in the walls, etc. (typical wear-and-tear). This means we have to pay for cleaning and sometimes for small repairs to the unit.



In Ontario it's against the law to take a security deposit from tenants, which would cover the cost of the occasional repairs we have to make. We understand that this is part of being a landlord, but are wondering what other investors do to prevent a tenant from leaving a unit dirty and/or slightly damaged. Do you just put wording in the lease that informs the tenant of their responsibility to leave the unit as it was when they took possession, and hope they do so?



Any thoughts/advice would be appreciated.



Moe

 

[Rickson9]

I make sure that my purchase price is low. This reduces financing costs, which reduces my expenses, which leaves me more profit that I can allocate to accounting, property management, maintenance, and legal. If an investor pays too much for a property then there is no wiggle room. I have no interest in doing accounting, property management, maintenance, or legal work myself. Others do.

 

[invst4profit]

There is no protection for landlords in Ontario after tenants move out. This is why it is extremely important to have new tenants sign off on the move in condition of the apartment and to have regular inspections of the unit while your tenants live there. This way you can hold them responsible for any damage found and have them pay for repairs while they are still tenants. This does not cover normal ware and tear but if something like carpeting is found to be stained or damaged you can hold them liable. Once they move out there is no recourse for damage, except small claims court, and normal ware and tear is fully the responsibility of the landlord.

 

[Thomas Beyer]

We invest in other, more landlord friendly jurisdictions, such as AB or SK. Expect rents to go lower in ON as electricity rates quadruple, forcing many tenants to seek lower rents so that overall total rent paid is flat or up by 2% overall perhaps. Write to your MLA and Premier; they may listen as they do not have a majority government anymore.

 

[surfermoe]

Thanks to you all for your advice!



Moe

 

[richardkp]

Hi Moe

Wish I could add something to this post! All I can say is that in Nova Scotia we are allowed to take  months rent and hold as a security deposit for just this kind of instance. It's even written into the standard lease agreement.



You do have to place it into a separate bank account and also name the institution on the lease and any interest is payable back to the tenant when they leave.

We have had one instance where we had to clean the unit and asked the tenant to ensure it was clean but she said we could just have the deposit and use it to clean!! Of course she had to sign it over to us but it didn't cost that much to clean the unit.



Chalk up another positive for Halifax!

 

[johnsu]

proper documentation on the walk in and same on walk out. If you missed it on the walkout then it's your own fault and you pay for it. In Alberta we have damage deposits and walkouts done after all stuff removed.

 

[Alvaro Sanchez]

You must budget for wear-and-tear and include that in your rent. Also do the property inspections at the start and then 5-6 months into the lease (we call them spring inspections) during the inspection you can raise issues that are not normal wear-and-tear and have them fixed during the lease. Inspection on exit is also required (and don't hesitate to ask them $$ for repairs en exit if not normal wear-and-tear).

 

[surfermoe]

[quote user=richardkp]Hi Moe

Wish I could add something to this post! All I can say is that in Nova Scotia we are allowed to take  months rent and hold as a security deposit for just this kind of instance. It's even written into the standard lease agreement.


Thanks, Richard. Look forward to speaking with you soon about properties in HRM.



[quote user=johnsu] proper documentation on the walk in and same on walk out. If you missed it on the walkout then it's your own fault and you pay for it. In Alberta we have damage deposits and walkouts done after all stuff removed.


Proper documentation has been mentioned by a few times. Thanks, John.



[quote user=asanchez]You must budget for wear-and-tear and include that in your rent. Also do the property inspections at the start and then 5-6 months into the lease (we call them spring inspections) during the inspection you can raise issues that are not normal wear-and-tear and have them fixed during the lease. Inspection on exit is also required (and don't hesitate to ask them $$ for repairs en exit if not normal wear-and-tear).


Alvaro, I love your profile photo. I'm going to round up my two sons and put them in a suit for a photo.



Moe