EVICTION TIP SHEET

Late payments, bouncing checks – these are just a couple of the warning signs seasoned landlords look for. But while evicting a troublesome tenant may seem the easy solution, doing so isn’t quite as simple.  We asked Harry Fine, a paralegal specializing in landlord and tenant law, to give investors a list of the top four tips for first-time landlords looking to go the eviction route.
 

Prepare for a battle 
As Fine points out, investors keen to evict a tenant should first be aware it’s no straightforward process. “The single biggest mistake landlords make is not recognizing evicting a tenant is a highly regulated business,” he says. “They had better be familiar with the process, or retain someone who is, before they start the eviction.”

Separate fact from fiction 
There are several urban legends haunting the industry and lingering on the Internet about what a tenant is entitled to, but Fine advises to do your due diligence and realize what your entitlements are under the LTB. “On rent applications, the Landlord Tenant Board under the act does not evict and get you your money; it only does one or the other,” he says. “The way the process works under the law is that if the tenant pays, the tenant stays. So right up to the moment the sheriff comes to the door, the tenant has a right to be there – if they pay.”

Research your options 
A Google search for “When can I evict my tenant?” returned 814,000 results. Needless to say, compiling the answers yourself will be a cumbersome task. Instead, Fine suggests sticking to the free resources provided by your local LTB such as its website and free call centre, as well as soliciting legal counsel from a professional who specializes in landlord and tenant law, is licensed by the Law Society of Upper Canada and affiliated with their local LTB.

Don’t hesitate 
Fine advises to nip an issue in the bud quickly, rather than let it drag on. “Don't write 10 letters saying the same thing.  It's like the brakes on your car; when they start to squeak, they never get better without some action,” he says. “Give one warning, one letter, and then do the appropriate termination notice, likely an N5, which is remedial...if the tenant corrects the behaviour, the problem goes away.  By waiting, you are simply making the damage worse, the behaviour more entrenched, and letting other tenants be disturbed by the behaviour, opening yourself up to meritorious claims from other tenants.”

www.teambluesky.ca

RAISING THE RENT

Landlords don’t want to scare away tenants by raising the rent, but here’s a lesson in how and why to do it.  

Income properties are in essence a business, and as such, you are constantly trying to increase income and decrease expenses. One of the easiest ways for landlords to do the former, at no cost and little effort, is to ensure that they hand out their annual Rent Increase Notifications in a timely manner. This will both strengthen your cash flow and in turn increase the market value of your property.

In most cases, the rent for a unit can be increased if at least 12 months have passed since a tenant first moved in, or if at least 12 months have passed since the last rent increase.

Proper Notice

Typically at least 90 days written notice is required. The governing provincial body provides forms to be used for rent increase notifications. In Ontario, the form is an N1 - Notice of Rent Increase. In B.C., the form is an RTB-7 - Notice of Rent Increase. Prudent landlords will have already issued their rent increase notifications for 2013. For those not-so-prudent landlords, if you act now and issue your rent increase notifications anytime before Nov. 1, the rent increase will take effect starting Feb. 1, 2013.

Rent Increase Guideline

The rent increase guideline applies to most private residential rental accommodations with certain exceptions. The guideline varies from province to province so make sure you check with your governing provincial body. In Ontario, the maximum allowable rent increase for 2013 is 2.5% (which also happens to be the maximum allowable under the recently imposed cap in Ontario). In British Columbia, the maximum allowable rent increase for 2013 is 3.8%.

Small Increase = Big Effect

Let's look at increasing the rent of just one unit, which currently rents for $800/month. The allowable rent increase guideline in Ontario was 3.1% for 2012. As such, you could increase the rent of this unit to $824.80/month. (You may be tempted to round it to $820 or $824, but that would be a mistake as every penny counts.) You have now increased the income that this one unit generates by $24.80/month or $297.60 on an annualized basis. It doesn't seem like much until you put the power of the multiple to work. $297.60 in annual income is worth $5,952.00 in market value based on a 5% cap rate. And that is just one unit. How about if you have 6 or 12 units that are due for a rent increase?

Will I Lose My Tenant?

One of the most common reasons that landlords do not issue rent increase notifications is that they fear they will lose good tenants. In all my years of handing out notifications, I've never lost a tenant due to the increase (some have complained but never left). At the same time, if it does become a point of contention, you as the landlord have to explain to them that your operating costs are continually subject to inflation. This includes, property taxes, hydro, water, gas, waste removal, etc... Unfortunately inflation is a part of our lives and unless you as the landlord are issuing Rent Increase Notifications, you alone are absorbing the ever increasing operating costs which eat into your cash flow and thereby reduces the market value of your property.

www.teambluesky.ca

WHAT THE CONTRACTOR REALLY MEANS....

Contractors didn't become contractors because they love to communicate. If they did they would have become speechwriters or newscasters (or get a gig writing ideabooks for Houzz). Sometimes what they say seems completely obvious to them, but makes no sense to you. And a contractor might speak euphemistically to dance around difficult topics. These tips should help you translate some of the euphemisms and somewhat curt statements you might hear, so that you get the most out of the client-contractor relationship.

Add to ideabook by Janet Paik by Janet Paik

1. Nothing. If he doesn't call you back, he's just not that into you. You don't want to chase a contractor who's too busy to return your call, unless you've given him money. 2. Let's do it my way instead. Odds are, your contractor has more experience doing things a certain way, so he may want to recommend that process. It's usually best to go with it rather than having him try something for the first time on your job.

Add to ideabook by Kenny Grono by Kenny Grono

3. I'll get started late next week. If your general contractor sets a start date, he should be able to keep it. But many times the tradesmen (plumbers, electricians, etc.) juggle several jobs at once and often have to deal with emergencies. You should expect them only to come close to their start and completion estimates. 4. The price is... Unless you're changing the scope of work, a contractor won't expect to negotiate a lump sum price quote. If you think the price is too high, get another quote for comparison. While prices vary because of differences in approaching the project or overhead costs, a contractor won't stay in business unless he prices competitively.

Add to ideabook

by Uptic Studios

by Uptic Studios

5. I'll do my best. There is a good chance a contract will fall short of your expectations. If you hear this, listen to your gut. Are you asking for too much? Have you added work to the scope, but asked for the project to be completed by the same date? Are you expecting a brand new look from a remodel with existing elements?

There are three elements to any project: The level of quality, the price and the time it takes to complete the project. Pick two of these that are most important to you. If you need everything perfect by a certain date, be prepared to pay more. If you have a fixed budget but want a certain look, give the contractor time to be creative and make it work.

Add to ideabook by Anthony James Construction by Anthony James Construction

6. Sorry, I can't make a recommendation. Most contractors prefer that you work through them. If you ask your general contractor for their plumber's name and number and he gives it to you, thank them. By allowing you to work directly with a subcontractor your contractor takes a risk by giving up control of the situation. He also gives up the ability to mark up the cost of the work the plumber does, which is one of the ways contractors get paid.

Add to ideabook by Kenny Grono by Kenny Grono

7. The design needed some tweaking. Often, this means the plans were unbuildable. Sometimes what's drawn on paper just can't be built. A staircase you'd need to crawl on your knees to use, "existing" spaces that don't exist, a pocket door that would slide through a switch box and the shower valve — I've seen them all. 8. I don't think this is a good fit. If a contractor declines to quote a project it could be for a lot of reasons. Maybe he has concerns about the budget. You and your contractor will be talking a lot, so maybe he just didn't think you clicked. It could also be that he's too busy, and he won't be able to devote enough time to your project to do it right.

Add to ideabook by Kenny Grono by Kenny Grono

9. We are going to need to do some value engineering. You've got caviar dreams on a cheese and cracker budget. Value engineering is when the team thinks creatively about how to rework the project to do the same or similar scope for less, like by changing material selections. 10. Let's walk through and make a punch list. A contractor wants to know everything you need done to be satisfied with the work. Every trip to your job costs your contractor, so make an effort to come up with a complete punch list —a list of to-do items that need to be completed for the project to be considered complete — instead of sending it bit by bit over time.

www.teambluesky.ca

"MY TENANT WRECKED THE PLACE! NOW WHAT?"

“I successfully evicted a tenant on September 5, 2012 at 8:40 AM by Sheriff but they destroyed the apartment. They broke the bathroom sink, the toilet, the doors, windows, light switches, put peanut butter everywhere, put ketchup on the ceilings, walls, everything they could break they did break. They even poured dried rice down the sink to clog it and opening the water would cause the rice to expand and make it worse.”

Alice from Waterloo writes about how her daughter was told by her landlord to leave the premises early and then sent a bill for $800 for clean-up costs. The landlord also threatened that if the amount wasn’t paid immediately, the bill would be sent to a collection agency and it would ruin her daughter’s credit rating. Her daughter indicated that there was nothing wrong with the apartment when she left.

These emails raise all kinds of issues as to what to do to protect yourself when a lease comes to an end. Here are some things to consider:

• Landlords will have to prove that damage was done. Landlords and tenants should prepare and sign a form called a rental unit condition statement, which is similar to what you sign before you rent a car. You go through the apartment and make a list of everything; whether there are any damages and confirming that everything is working. Then you should do the same thing at the end of the tenancy, to both agree on any damages that may have been caused by the tenant.

• Landlords should regularly inspect the unit during the lease, to make sure that it is being properly cared for by the tenant. You have to give 24 hours’ notice and can get in during the hours of 8 a.m. to 8 p.m. to do it. If you notice any damage, you can immediately demand that it be fixed, or consider an application to the Board to get the tenant to fix it.

• Landlords should respond to requests by the tenant to fix things that break down in a timely manner.

• Tenants should also take pictures of the unit when they leave as additional proof that they left the place in similar shape to what they got in the first place.

Once the tenant leaves, you will have to go to Small Claims Court to sue for any damages. You can sue for any amount up to $25,000 in Ontario, which usually is enough for most of these types of claims. When deciding whether to bring a claim, ask whether you are going to collect anything if you win. If the tenant has disappeared, it may just be a further waste of money to sue. However, if you know where the tenant is working, it may be worth your while. Consult with a lawyer or paralegal before making these types of decisions.

Landlords cannot threaten to ruin a tenant’s credit over these types of issues. In my experience, the Ontario Ministry of Consumer Services would probably consider this type of claim to be an unliquidated damage, meaning it is just an accusation and has not yet been proven. As such, if the landlord or their agent reports you to the credit bureaus over this, in my opinion, you can report the landlord to the Ministry by calling (416) 326-8800. Do not let someone bully you into paying for any damage that you did not cause.

In my experience, when landlords do more during the lease to be appreciative of their tenants and proactively try to work things out, it will reduce the risk of any damage being done to the unit when the tenant vacates.

Mark Weisleder is a Toronto real estate lawyer.

www.teambluesky.ca

Getting a Divorce? Think about the house!

Getting a divorce is tough enough, but having to sort out the house and finances can seem like a daunting process. Here’s a few tips on how to minimize your frustration, and financial exposure, during a divorce.

My husband and I have an agreement: If either one of us is unfaithful to our marriage vows that person walks away with nothing. Absolutely nothing. No car, no kids, no house. Nadda. And yes: we shook on it. We also meant it and, despite how ridiculous this gentleman’s agreement may appear to be, we share this story with family and friends, with full knowledge that our handshake would never stand up in a court of law, if it came to that.

But in era where almost half of marriages end in divorce, it was our way of trying, in a humourous way, to acknowledge that divorce and property is a messy business.

The best solution is, obviously, not to get divorced. But if separation is imminent in your life you may be curious as to how a family break up with impact the marital home.

There are three basic scenarios as to what can happen to your marital home.

Sole possession. This is when one partner opts to buy out the other partner. Often a paid appraisal is conducted, which provides a current or fair market value of the home. Then the spouse who wants to continue living in the home can obtain refinancing, which will pay the other person half of what the home is worth.

Co-ownership. This is typically only undertaken by partners who are going through an amicable divorce, as it means that both are responsible for payments and both are entitled to half the funds when the property is sold. The difficult component of this type of ownership, however, is that both people would be responsible for capital gains on their share of the profit. The spouse that remained living in the home, however, may be able to claim an exemption. Speak to a lawyer for more information on this option.

Sell. While it’s tough to uproot you and/or your family, selling can often be the easiest solution. By selling the marital home, both people are able to take their entitled portion of the sale and then able to pursue their own home ownership needs. Problems can arise, however, if the market is soft and you cannot get a good sale price for the home.

Regardless of what you and your former spouse decides to do with the home, you’ll want to consider the following:

• Business as usual until there’s a settlement: Regardless of how bitter a divorce may become, it’s important to continue paying mortgage, property taxes and bills, at least until a settlement has been reached. Refusing to pay common debts will only hurt your future chances of refinancing and home ownership. If you find your partner is unwilling to help with the payments, simply keep receipts. Then use these receipts to seek reimbursement during the settlement process.
• Separate your finances: As fast as possible, seek to separate your finances from your partner so you can start establishing good credit on your own. That may mean opening a separate bank account, or getting your own credit card.
• Expediency is key: The sooner your divorce is finalized, the better you’ll be financially. That’s because mortgage professionals and other finance advisers may be unable to help you rebuild or move on until the settlement is signed and delivered.

www.teambluesky.ca

How to Paint Kitchen Cabinets

Want a major new look for your kitchen or bathroom cabinets on a DIY budget? Don't pick up a paintbrush until you read this!

The right cabinet color can transform your kitchen or bathroom's look. And because replacing cabinetry can be expensive, a fresh paint color could be the best bet for your budget. But before you start in on this seemingly simple DIY, keep a key point in mind. "The main issue is that with most woodwork — but specifically kitchen cabinets — is that it's finished with a glossy product designed to be wipeable, and that same property prevents paint from sticking to it," says painter Alex Davidson.

Although it's not as simple as painting your dining room, with the right prep, painting cabinets can be an affordable and lasting design solution. See what four painting professionals say about painting kitchen cabinets.

Add to ideabook by Todosomething LLC by Todosomething LLC

Should you paint your cabinetry? Before making any decisions, figure out what the existing finish is on your cabinet. If you're not sure, consider taking a door or drawer to your local paint supplier — he or she can help you with what you need to get your cabinet ready for painting. Depending on the level of work, you may want to look into hiring a professional. "Think carefully before painting your cabinetry," says Davidson. "It can be a DIY, but it requires a lot of attention and care." "Always consider the cost of possibly refacing your cabinets or replacing them altogether, and how that coordinates with your short- and long-term objectives," says Wade Thompson ofThomsonHoliday Painting.

Add to ideabook

by Julie Smith

by Julie Smith

How to paint your kitchen cabinets.

1. Remove the hardware and hinges and clean the surfaces thoroughly. Bob Miano of DeGeorge Custom Cabinetryrecommends using a clean, soft rag or T-shirt and mineral spirits or TSP (trisodium phosphate). Don't just wipe them down — give them a good scrub to remove old oils, waxes and grime. This is a crucial step. "Paint is a very forgiving material, but the one thing it refuses to abide is a dirty, greasy surface," says Philip Storey of Redhill Painting.

2. Lightly sand the painting surfaces to open the finish surfaces. If there are any dents or grooves in the cabinetry, you may want to fill them in with a good wood filler first. After sanding, use a clean cloth to remove any sanding dust.

3. Prime the cabinets with a stain-blocking primer designed for glossy surfaces.

4. Finish the cabinets with at least two coats of the paint you've chosen. Let the paint dry thoroughly and lightly sand between coats.

5. After everything has dried thoroughly, put your cabinets back together. "Be sure to keep everything organized," says Thompson. "Have a system for remembering the positioning of your cabinet doors."

Add to ideabook by Debra Toney by Debra Toney

Choosing the best paint for cabinets. If you're not working with a professional, look for paint at a local, reputable paint supply store, where the staff can help you pick the right product for your cabinets. Choose a paint that can stand up to repeated washing and is nonblocking, so it won't stick to itself when the cabinet doors are closed. Also, know that dark colors tend to show imperfections in the paint and cabinetry much more than light colors do — and, contrary to popular belief, they usually highlight dirt more, too. Having trouble choosing a color? Check out these kitchen cabinetry palettes.

Add to ideabook

by Rachel Reider Interiors

by Rachel Reider Interiors

Four experts' favorite paints for kitchen cabinets.
Alex Davidson: Kelly Moore DuraPoxy paint line, or Benjamin Moore's Regal Select line in a semigloss.

Wade Thompson:Benjamin Moore Advance— a new latex product that compares to the look of oil paint in the way it levels and performs.

Philip Storey: Fine Paints of Europe. Their durable paint products are available in both oil- and water-based paints, and are great for cabinets.

Bob Miano: Use the premium grade when using paint from major paint manufacturers, since they tend to be thicker and have more coverage. Avoid flat finishes, since they're much harder to clean.

Add to ideabook

What to watch out for.Painting cabinetry may seem like a quick and easy kitchen solution, bit it's a big job. Make sure you have the time, skills and patience for the task. Odds are, you'll be looking at this cabinetry every day — so make sure you have the ability to make it look good.

If you're feeling unsure,look into hiring a professional painter. While it may be more expensive, these pros can probably get the work done in much less time and with a result of much higher quality. "Always get a few opinions," says Thomspon. "Regardless of your decision, talking to several companies will be a learning experience." Many professionals will use spray applications to get the smoothest finish, which can make a huge difference.

Painting cabinetry can be a lot of work — but whether you hire a pro or do the painting yourself, the results are well worth it.

"Above all, have fun with the project," says Miano. "Remember, it's only paint."

www.teambluesky.ca

What to Look for in a Contractor's Contract

A contractor without a contract is just a worker and his or her word. Even the most honest person would be hard-pressed to keep track of all the conversations that go into planning for the average construction project. That's where a good contract comes in. Many a conflict can be avoided if both parties can simply consult the contract when there's a misunderstanding on either side. Contracts can save relationships, and your house. 

These 10 tips, while just a starting point, will get you thinking about the most critical thing to have in hand before work starts.

1. The contract itself. A contract protects the parties involved. Just because you had a great conversation during the first meeting at the house, and even though the work is only supposed to take two days, you'll regret not having a contract when one of you forgets half of that great conversation and the work isn't completed after two weeks. 2. A physical address. Should you need to track down your contractor after work has begun, you won't find him or her at a P.O. box. Ask to drop off the deposit at the physical location listed on the contract.

Add to ideabook by Kenny Grono by Kenny Grono

3. License. While in some cities getting a contractor's license may be more a matter of writing a check than verifying skill, check to see that your contractor lists a license required for the work being done. A license may mean that your contractor passed the required exams, or it may just mean the state knows where to find him to collect taxes. But it also means your contractor has done the paperwork and is playing by the rules. 4. Insurance. Injuries can occur on a construction site. If the location is your home and your contractor does not have the proper insurance, you may be held liable. Check with your locality for the proper amount of liability insurance, and if the contractor has employees, check to see whether he carries worker's compensation insurance.

Add to ideabook

by Thom Filicia Inc.

by Thom Filicia Inc.

5. Scope of work. There are many details to get right in a renovation, so write everything down before work begins. This can be the best way to get everyone on the same page. If your designer has drawn up detailed plans, make sure the contract references the designer and the date on the plans so you have something to point to should the finish on your woodwork be different from what you requested.

6. Duration of work.Though projects often take longer than predicted for many legitimate reasons — some caused by the client and some outside the contractor's control — put the expected project duration in writing. The important thing is not that your contractor shows up every day, but that he finishes the project on time. Having a timeline will help calm your nerves if progress hits a slow spot.

Add to ideabook

by Kenny Grono

by Kenny Grono

7. Exclusions. A good contract should include a list of exclusions. These might be related to areas that will not be visible until the walls are opened up after demolition, or the level of cleaning you should expect after the work is complete. Also, talk to your contractor about the likelihood of finding asbestos behind the walls. He won't be able to say for sure, but he can speak from experience and help you plan your contingency budget.

Add to ideabook by Kenny Grono by Kenny Grono

8. EPA lead safety certification. Contractors working on homes in the U.S. built before 1978 should be certified in lead-safe practices by the EPA. You can read more about the requirements here, but in a nutshell, it's all about minimizing and containing dust during work, which is vital for the safety of you and your family. 9. Payment schedule. While payment schedules can vary by the job, they should always be agreeable to both parties involved. In my opinion, payments tied to milestones in the project are better than those tied to percentages of completion. As long as you are confident that you're not paying for significantly more than what's been completed, you should be OK. 10. Warranty. The standard warranty for work is one year from substantial completion. If you've checked the contractor's physical address and gotten recommendations from people you trust, you'll know where to find him later if needed.

www.teambluesky.ca