Oct 11
3
Happy Monday!!
Last week we sent out the following email to our Rev N You Newsletter readers … I normally don’t repost the messages we share to our newsletter subscribers but we had such a big response to this one that I wanted to share again!
Plus I now know how the story ends … and it wasn’t good for us. We skipped a few steps and paid the price for it. I’ll tell you that part at the end. First, the story (oh, and by the way, if you missed this in your email that means you’re not a newsletter subscriber … maybe you should fix that right now so you don’t miss other goodness in the future??). Here’s the story:
Our tenants broke the lease and didn’t pay their last month of rent. It’s a long story, but basically Dave tried to keep the whole situation simple by suggesting we keep their rent and pet deposit and call it all even. Had they agreed to that we would have still been out of pocket about $600 – but we would have just let it be.
Unfortunately, the young tenants involved their father. We were unable to reason with him and felt forced to go through the legal channels to try and collect the money we are owed. We sought some council on this and it seemed we had a strong case.
The whole situation reminded me that there are some really important tips surrounding tenants notices that we should discuss.
If a tenant is moving out – ALWAYS get notice in writing.
Verbal or text message is not enough. Get it handwritten on a piece of paper or at the very least in an email. Ideally, use the forms provided by the landlord tenant board for your area.
Use the Proper Notification Forms for Your Province (or State) AND Get Proof
If you have ANY issues with a tenant regarding violations in their lease, communicate this violation over the phone or in person and follow up with the EXACT notification that you are supposed to give (the notices vary by province and state and what notice to give for what violation).
If you deliver a notification to a tenant and they are not home, in many cases you can leave it taped to their door.
HOWEVER, you MUST have proof that you did this. Proof can be a witness who will sign off saying they were there with you or a photograph time stamped. Probably you should have both.
The Onus of Proof is On You Mr. or Mrs. Landlord – ALL ON YOU
Finally, if you are dealing with a broken lease, the onus is on you to minimize your damages. Begin advertising the property AS SOON as you get notice. PDF and save copies of any online ads. Take time stamped photos of any signs you put up or any flyers you put out. And if you put ads in the paper, keep copies of the paper. You have to prove that you made EVERY effort to rent the property.
It doesn’t matter if a tenant violates the lease six different ways – it’s 100% your responsibility to prove this. And, it’s 100% your responsibility to follow the letter of the law in the process. Tenants, however, don’t really have to worry too much about what they should and should not do.
It’s not fair but there is no point getting upset about that fact. It is what it is. Just be prepared!
Here’s the good news. In 10 years and one month of being rental property owners and having probably close to 100 different tenants (maybe more, I’ve actually never counted this number!), this is only the second time it’s gotten to the point where we filed to try and recover cash.
So don’t let this freak you out … but do let it inform you to get familiar with your local laws and if there are any issues (noise complaints, pets not approved, added occupants, late rent, bounced cheques …) make sure you document the issue and serve the appropriate notices just in case it ever gets to the point where you have to fight for cash or defend yourself in court.
Hope you never have to find out how important this is -but if you do – at least you’re ready!
How It All Ended
Dave doesn’t even know this yet – we just received the decision in the mail today and he’s away in Canmore at his mastermind meeting. I won’t get into the exact details but the bottom line is we lost. The court decided that we did not have the right to deposit the cheque for the last month of rent (long story there), that while we didn’t have proper notice, it was clear to the court that we knew when they were moving out, and the costs that we incurred were irrelevant to to the situation for a variety of reasons (i.e. common business practice of changing locks is not a loss because we would have had to change the locks when the tenants moved out anyway).
It’s brutal. We were trying to be compassionate for their situation. We tried to work with them too much and didn’t follow the actual letter of the law until we saw there was a big problem. We messed up in a few ways but the two biggest were in not forcing them to put their notice in writing AND in not using the proper notification forms from the beginning when the rent bounced, the lease was being broken and other issues arose. By not doing those things we basically set the whole situation down a course where everything automatically ruled in favour of the tenants.
It makes my points above even more important.
We’ll be tightening our screening process even further after this. Like I said in our email, it’s only the second time we’ve gone to court. Even though we won the first time, we never saw a penny. So basically the idea is to not ever get to this point through good screening.
In this case, we took a chance on a nice young couple moving straight out from their parents house into their first rental ever. Everything else about them checked out but the reality is that the responsibility was too much. In the father’s opinion it was our fault because we were charging so much rent and couldn’t have possibly expected two kids to pay us $820/month in rent. Yes – that was actually said in the hearing.
We don’t discriminate based on age but I don’t think we’ll be taking a chance on a first time renter ever again. No renting references – no rental.
Regardless, as we handle a few other minor issues with other tenants right now, I assure you we’re following the rules to the letter.
