Weisleder: Do your research before renting out your space
It is important to conduct proper research in advance before renting any space to a residential tenant, whether it is a basement apartment in your home or an investment property. Being careful in advance can save you unnecessary lost rent, repairs and legal costs.
You must also be very careful when interviewing any potential tenant that you do not inadvertently violate any sections of the Human Rights Code.
In one case, a woman with three teenage boys was refused an apartment. She was able to prove that she was discriminated against for “family status” reasons. The judge accepted her statement of complainant that the superintendent told her that her application would probably be rejected because of her children and was told the landlord had trouble with teenagers in the past. She was awarded $4,000. It is clear that you must be very careful what you say to a tenant at any time in the interview process.
You are permitted to ask a tenant on a rental application if they smoke, whether they have pets and how many people will be living with them in the apartment. You cannot ask about their ethnic background, religious or sexual preference or marital status.
Trying to evict a tenant who is damaging the premises or interfering with the enjoyment of the other tenants can typically take two months, and that’s when there are no significant delays. Unfortunately, professional tenants who know how to work the legal system can delay proceedings by up to six months. Such tenants can cause severe financial hardship for landlords.
How can you avoid this from happening? You can carefully qualify your tenants, doing credit checks, obtaining references from previous landlords and making sure the tenants have regular employment. When you speak to prior landlords, make sure to ask whether the rent was paid on time and if the tenant kept his unit clean and tidy or caused damages through smoking, pets or disturbing the other tenants. To verify employment, ask the perspective tenant for a copy of their most recent company pay stub.
Once you have created a basement apartment, it is not so easy to change it back. For example, in one case where a landlord tried to terminate a basement apartment tenancy in order to use the space as a home office, it was not deemed to be acceptable as a reason to evict the tenant. Similarly, converting the basement for extra storage space will also not likely be an acceptable reason to evict the tenant.
Even if your basement apartment is illegal or has not been legally retrofitted, you still cannot evict the tenant. Only the city can evict the tenant, but be careful because the city could also issue a work order, requiring you to spend thousands of dollars to properly retrofit the unit.
In another decision, a landlord was not permitted to terminate a tenancy even though they proved that their son needed the apartment because the tenant had a chemical disability and she could not find another apartment to address her specific needs. The only way the landlord could evict her was if he could assist the tenant in finding a suitable alternative accommodation.
There are also of course responsible tenants who take excellent care of their apartment units, in many cases better than even an owner would. By making sure that you find these tenants in advance, you will not only secure your investments, you will not have to worry about the difficulties or the costs that will be incurred if you later need to evict them.
Mark Weisleder is a lawyer, author, course developer and public speaker for the real estate industry. Visit him online at www.markweisleder.com.