STRESS-FREE PROPERTY MANAGEMENT

Learn from renowned Calgary Real Estate Agent Professional and Experienced Landlord, Glen Godlonton

Contact Me
The Book
Classes

Back to: Landlord Success: Proven Strategies & Practical Advice for Stress – Free Property Management

0

There are several topics that are importantly related to leases.

We'll go into further detail of each below.

Types of Leases: 

In Alberta there are 2 different types of leases:

FIXED TERM LEASE:  A fixed term tenancy begins and ends on specific dates.

  • For example: a tenant and landlord may agree that the tenancy will be for a fixed term of 2 years from January 1, 2016 to December 31, 2018. On December 31, 2018 the tenancy will automatically end.
  • A typical fixed term tenancy is 1 year.
  • No notice is required to end the tenancy by either the landlord or the tenant, even if the parties agree to provide each other with notice.
  • I believe a fixed Term Tenancy (or Lease) is the best for the landlord as there is a definite end date to the lease. If you have difficulties getting a tenant out, at least at the end of the term they must vacate. 
  • When a fixed term tenancy comes to an end and the Landlord accepts another rent payment without signing another Fixed Term Lease the tenancy now automatically converts to a Periodic Tenancy.  Sometimes this is referred to as a Hybrid Tenancy.

PERIODIC LEASE: A periodic tenancy has a start date but no end date.

  • Either the landlord or tenant may end a periodic tenancy by giving notice. 
  • Most periodic tenancies are month-to-month, but they can also be week-to-week or year-to-year.
  • The tenant must give the landlord 30 days notice to vacate.
  • The Landlord must give the tenant 90 days notice to vacate, but only for specific reasons
  • See Chapter 1 Tenants, Getting Rid of Annoying Tenants. 

GENERAL LEASE CONSIDERATIONS

  • Always put the lease expiry date in your calendar (Phone and Computer) so you never miss the expiry date of the lease.
  • Also put in a reminder 100 days out before the end of the lease so you start to think about if you are keeping the tenant and if you are going to raise the rent, as you are required to give 90 days notice.

Inspections

QUARTERLY INSPECTIONS: We strongly recommend that you do an inspection of your property once the tenants have moved in: 

  • When you are choosing a tenant tell them that you will have to do inspections of the property.
  • You can tell them that your insurance requires these inspections.
  • You can tell them that you will be able to maintain the property better for them if maintenance issues do not get too large and out of control (especially water damage).
  • Inspections should be done quarterly for newer tenants to determine how they are maintaining the property.
  • Inspections could be extended to twice a year if the tenants are good and you have had no problems.

Things to inspect

  • Bring your clipboard and document your inspection (use a blank move in inspection form)
  • Give 24 hours notice of inspection in writing (text or email is sufficient if agreed upon as communication)
    • furnace room (flammables)
    • bedrooms
    • bathrooms
    • kitchen
    • living room
    • garage
    • storage areas
    • yard
  • Document with pictures and video
  • Fix issues while tenant is still there or arrange who (contractor or tenant) will make repairs and discuss payment terms
  • Keep documentation on file in case you ever need to use it (i.e.: court case)

Cleaning Checklists

Move In & Move Out Checklists

These checklist will be completed in advance and adjusted if required when the tenant arrives. It’s important to take pictures and video during inspections. These will help document the time that they were performed and capture the exact nature of how clean the property is when they move in or out and the nature of any damages.

Once notice of lease termination is provided, it’s time to stop by with a cleaning checklist 45 days prior to the move out day.

Regardless of which inspection you’re performing, always sign, date and have the tenants agree to the inspection findings by signing as well. You must leave a copy of the inspection for the tenant also.

Things to remember

  • how may keys are given to them, and complete the smoke detector/CO2 detector section
  • discuss and record any items such as windows, window screens, stove, fridge, washer, dryer, shelves, and accessories that may be included
  • discuss and record any items such as yard tools, shovels, rakes, lawn mowers, garden hoses, sprayers, sprinklers, and accessories that may be included.
  • when completing the walk through, discuss the cleanliness of the property and that we expect it in the same condition at the end of the lease
  • mention that we have taken numerous pictures and videos of the property before they arrived for my records so if there is ever a disagreement, we will have them to refer back to. This indicates to the tenant that you are extremely organized, and it will be difficult to try to lie to you later about potential damage.
    • these photos are not the same as the advertising photographs we use in our ads as these are designed to historically document the exact condition of the property at move-in (record both good and bad).
    • pictures and video of the exterior and parking units
    • photos of all plumbing fixtures, light fixtures, furnace, electrical panel, and inside and outside of all appliances showing shelves are all installed and not broken
    • take photographs whenever you do an upgrade to the property, showing the improvements
  • On your computer create a folder for each property you own and create 2 sub directories for photographs and videos one for advertising and one for walk throughs.  Create a sub-directory named with the date you took the pictures. Filing everything correctly now will be a great help finding things down the road (also create a back-up).
    • photographs and videos can be used for insurance purposes

Subleases

A sublease is a legally binding contract made between a tenant and a new tenant (also known as a subtenant or a sublessee). The sublease gives the subtenant the right to share or to take over the rented premises from the original tenant. Alternatively, the subtenant can pay the rent directly to the landlord.

Generally, if YOU want to be in control of who lives in your property, then you should NOT permit subleases.

  • If the existing tenant wants to leave early and the landlord wants to hold them to the contract; the landlord can tell them to help find a new tenant that will be approved by the landlord (interview them and accept or reject the prospective tenant). 
  • If the new tenant passes the screening process, the landlord should create a new fixed term lease with the new tenant for a 1-year term or for the term remaining on the existing lease.  The term is which ever is agreeable to both parties.

Termination of Leases

Ending the Lease Early


Inevitably life happens and either the landlord or the tenant may want to end the lease early. Both parties need to keep in mind that they have signed a legally binding contract that each party is supposed to adhere to.  

  • If both parties agree to the change or to end the lease, then the process is easy. Agree to the changes and sign the appropriate documentation.
  • Always make sure both parties sign a change to the lease or an amendment to the lease, so the changes are documented and so there is no confusion going forward. You the landlord, will be protected if the tenant says they did not agree to the change or they decide they do not want to move out.

Tenant Wants to End Lease Early


If the tenant wants to end the lease early, you have two choices; either let them out or try to hold them to the lease.

Letting them out early:

  • It is not necessarily a terrible thing to let the tenants out of the lease prior to the end of the lease.
  • If people need to move for a valid and necessary reason they will leave anyway (mom passed away, lost job etc.).
  • If you say no, they will leave anyways, and possibly do a ‘midnight move’. Because they are mad at you for not letting them out of the lease, potentially when they leave, they may leave some belongings and not clean thoroughly.
  • If you are understanding and let them break the lease, they think you are doing them a favour. Tell them that you will help them by terminating the lease early, however the following applies:
    • The property must be very clean
    • You must remove all belongings
    • Help find a new tenant
    • Allow showings of potential tenants
    • Keep the property clean for the showings
    • Vacate the property for these showings
    • You could ask them to pay the rent until the end of the lease (unlikely)
    • It would not be unreasonable to ask them to pay the rent until you find another tenant (at least one more month)

Holding them to the lease:

  • You can tell them that you are not letting them out of the lease early.
  • You can tell them that they are responsible for honoring all terms of the lease.
  • If they do move out early, possibly expect the property to be left in a messy condition. Document everything with pictures and video.
  • Document all correspondence in writing, so you will have a record if they do not pay, you can apply to RTDRS.
  • If you do win a judgment at RTDRS and they still do not pay you can take them to small claims court to try to collect.
  • Try to get the property cleaned up and rented ASAP. This is your obligation to the RTDRS
  • If they do leave items, you must get a written confirmation (in most cases e-mail or text would be considered valid) that they do not want these items so you can dispose of them legally.

Landlord Wants to End Lease Early


There are several reasons you may want to request the tenant to vacate the property prior to the end of the lease.

  • LACK OF RENT PAYMENT (where they are not cooperative)
  • LACK OF RENT PAYMENT (where they are cooperative)
  • SUBSTANTIAL BREACH OF THE LEASE (some result in 24 hour, 48 hour or 14 day evictions. Check the current ACT for details.)
    • interferes with the landlord or landlord’s employees
    • disturbs other tenants (for example, by playing loud music late at night or being noisy)
    • endangers others in the building
    • causes significant damage to the residential premises
    • doesn’t maintain or keep clean the residential premises and all property included in the residential tenancy agreement
    • doesn’t vacate the premises when the tenancy ends

There are very specific rules surrounding when or why a landlord can terminate a periodic lease and evict a tenant.

  • landlord or relative moving in
  • property is sold
  • building is being demolished or major renovations (painting the kitchen is NOT a major renovation)
  • the building is changing to commercial use

There are several reason boxes to choose from on the Termination of Periodic Tenancy form. The selections are in adherence with the Tenancy Act so ensure your reason fits into one of the selection criteria.