Category Archives: Lease

30 Day Notice To Landlord

When you become a landlord the first step is understanding leases.  I am often amazed when I am interviewing potential tenants how many do not have a documented lease.  How can a tenant be expected to know how much notice to provide.

I agree a verbal lease will work in most places, however, it offers very little protection for the landlord or tenant in the case of a dispute.

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The state or provincial rules will be enforced.  The problem is, that this will likely work in favor of the tenant.

For example: Joe landlord makes a verbal agreement to lease an apartment for one year to Bob tenant.  In my area, if Bob tenant wants to leave at the end of a one year lease, he would have to provide three months notice before the end of the year, or it would automatically renew for another year.

During Bob tenants second month of tenancy, he decides he wants to leave and move in with his girlfriend.  He calls Joe landlord and provides a verbal 30 day notice to quit.  Joe landlord points out that they agreed to a one year lease.

Bob tenant disagrees, and claims he only agreed to a month to month lease, and all he needs to provide is 30-day notice to quit.

Here is the challenge:  They do not have a written agreement.  If it goes to a residential tenancy hearing, Joe landlord will likely have trouble with his side of the story.

He will automatically lose some credibility with the tenancy board, due to the fact that he did not have a written lease.

In my opinion landlords and tenants should always have a written lease agreement.  It is the responsibility of the landlord to explain the lease to the tenants.

I hope you enjoyed my 30 day notice to landlord post.

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How to do a proper lease signing

How to do a proper lease signing

The lease – the agreement between the landlord and the tenant.

The lease is a legally binding contract.

I have a friend in the industry that gave me some advice.  Think of the lease agreement as a loan.  If the rent is $1000 for a 12 month lease, think of it as a loan for $12000.  What kind of paperwork and security would you want for a $12000 loan.

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The lease needs to be taken seriously, however, whenever we consult on tenant issues, the first thing I ask for is the current lease.  What I find amazing is how many people do not have a current lease, or unsigned or incorrectly filled out.

I have also seen some poorly written custom leases.  In Nova Scotia you are able to write your own lease, however, if you write into your lease items that are not covered under residential tenancy guidelines, then those items will not be considered at a tenancy hearing.

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Items such as, in Nova Scotia you can only collect a damage deposit of no more than the equivalent on one half months rent.  you can write in a custom lease, one full months rent damage deposit required, however, if the tenant complains, you will have to give half of the money back.

The lease should only be signed when all of the tenant screening is completed.

The lease should be signed in person (whenever possible).

Here is our lease signing process (based on Nova Scotia guidelines, other provinces and states may very)

go to the access Nova Scotia website

They have a standard lease form you can fill out on the website.

Make sure to fill out one copy for you and one copy for each person who will be signing the lease.

Then highlight the areas you want the tenant(s) to sign and initial.  We get them to initial a few areas, such as the tenant responsibilities section, amount of rent / when it is due what is included in the rent and also proof they received a copy of the lease and a copy of the residential tenancy guide.

Never assume anything.  Communication at the lease signing is crucial.  Go over the lease with your tenant (customer) line by line.

We have had questions that we may think are common sense.  Do not assume.

For example: when is the rent due?  We always assume it is due on the first of the month, but if someone is signing their first lease, they might not know (we have been asked this question).

I have a friend who is in the student housing business, he rents rooms “all inclusive” one Saturday night he had a call from one of his tenants to ask for more toilet paper.  When he explained that he does not provide toilet paper, his tenant responded by saying, ” I thought I was renting an all inclusive room”.  The moral of this story is to be clear when it comes to what is, and is not included in the lease.

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Another important section is the notice to quit.

You need to be clear about when the lease is going to end, or what the options are to end it.

In our province we have four types of leases:

weekly, monthly, yearly and fixed-term.

We start each tenancy with a six month fixed term lease.  The fixed term lease has a specific end.  You do not have to renew the lease.  That allows us and the tenant to decide if we are the right fit for each other.  If either party wants to part ways at the end of six months, we can do that.  It is important to note, that if you do nothing but keep collecting rent after six months, it becomes a month to month lease.

When you sign a lease in many places, you need to provide a copy of the residential tenancy guide.  In Nova Scotia if you do not provide one within ten days of the lease signing, your new tenant can void the lease and walk away.  We always provide a copy at the time of lease signing.

collecting the damage deposit – We never consider an apartment rented until we have a signed lease with the damage deposit in hand.  If it is close to the time the tenant is moving in, make sure to get cash or an email money transfer for the damage deposit.  We have not had any damage deposit cheques bounce, but have heard of it happening.

I would like to conclude by saying, make sure you take having a properly signed lease seriously.  It is critical in having a great tenant / landlord relationship.

Michael P Currie

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What type of lease should you use?

What type of lease should you use?

 

Lease

Lease agreement

Standard Residential Lease, Nova Scotia

The lease.  This is the most important document that the landlord / property manager and the tenant have. It needs to be taken seriously, Shelly and I have often compared it to a marriage or a loan (please see our post on how to do a proper lease signing). There are several different types of leases, and it is extremely important to know which one you should use.

The following are questions and answers to help you decide which lease is best for you and your tenants.

What kind of lease terms are available in your province or state?

The kind of leases available in Nova Scotia are fixed term, weekly, month to month and annual.

A fixed term lease has a defined beginning and end.  It can be 3 months, 6 months or 1 year.  Notice does not have to be provided, and the tenant or landlord do not have to extend it any longer than the defined term.  They do have the option to sign a new lease after the defined time.  The tenure rules do not apply since it is a specific term.

A weekly lease requires 1 weeks notice by the tenant or notice by the landlord for specified reasons.

A month to month lease requires 1 months notice by the tenant or notice by the landlord for specified reasons.

In an annual lease the tenant needs to give 3 months notice before the end of the lease, or it will be automatically renewed.  The landlord can only give notice for specified reasons.

What are the tenant tenure rules in your province or state?

In Nova Scotia the residential tenancy rules changed a couple of years ago.  The biggest change was that as soon as a tenant moves in, they have tenure.  The previous rule was that a tenant had to live in a place for five years before they had tenure.  Please not the tenure rule does not apply to fixed term leases.

What does this mean for landlords in plain English?

The moment a tenant takes possession of a property they have all the residential tenancy rights stacked in their favor.  They still have to abide by the terms of the lease, however, you cannot remove them from the property unless they stop paying rent, violate the terms of the lease, you as the owner plan to move in (or have a relative move in), or are doing a major renovation that makes the unit unlivable.

We have found the best lease to start any new relationship with is a fixed term.  We start with a six month fixed term, with an option to renew as long as everything is going well for both the tenant and the building owner. The six month period gives both the tenant and us enough time to make sure it is going to be the right fit.  If either party does not think it is the right fit, no other paperwork needs to be done.  When the fixed term ends the tenant can just walk away.  If the relationship is working out well, then all that needs to happen is a new lease needs to be signed. At the end of the six month term you can be a bit more flexible on how to proceed.  I will caution you that if you sign a month to month lease, realize that the tenants only need to provide one months notice.  That can put you in a serious time crunch to fill the vacancy.

What is your long term plan for the property, and how long to you plan to lease the property?

When you are leasing up a property it is important to know your long term or short term plan.  If you are planning a major renovation sometime in the next 2 years, then you may only want to do fixed term leases.  Fixed term leases will give you the specified time of when the property will be vacant.

How long does the tenant plan to live in the property?

When you are working out the details of the lease application with your potential tenant, it would be a good idea to ask how long they plan to live in the property.  It might be easiest to write up a lease that works with the tenants timeline.  For example if they are moving to a particular city for a one year work term, it might be a good plan to write 1 one year fixed term or do two 6 month fixed terms.

I hope this post gives you some insight into the types of leases that maybe available in your area.

Make sure you use the best type of lease for you and your tenant (it is a customer service business), know the rules, make sure to screen, build your portfolio with loyal, long term tenants that always pay the rent on time and enjoy leasing from you.

Michael P Currie

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