Real Estate Solution

Renting your Toronto Condo or Mississauga Condo can be hazardous to your financial health.

It does sound easy doesn’t it?

Buy a Toronto or Mississauga Condo, rent it out and let someone else pay the mortgage. The backbone of your future wealth.

There is a problem however and that is the conflict between the present Landlord and Tenant legislation and the Condominium Act 1998.

The Condominium Act 1998 obligates a condo corporation and its’ Board of Directors to uphold and enforce if necessary the Condo Corporations declaration, by-laws and rules.

Landlord and Tenant legislation sets out the rights and obligations of both landlords and tenants. It also provides a remedial process through the Landlord and Tenant Board.

So, if you were to rent your Toronto Condo or your Mississauga Condo who would be the landlord?

a) The Condo Corp

b) The Unit owner

If you said (b) the unit owner you would be right.

Neither the Condo Corporation nor its management would be considered the landlord under landlord and tenant legislation.

Let’s see what possible problems.

The condo corporation may have in its declaration, by-laws or rules that prohibit pets of a certain size or breed.

What happens if a tenant acquires a pet after they move in to your Toronto Condo or Mississauga Condo?

And let’s just say that it is of the variety that is prohibited by the condo corporation.

The condo corporation can request that you as the owner must have the offending pet removed and if you fail to do so, enforce their rights by court order if necessary.

But the Landlord and tenant legislation specifically states that tenants are allowed pets and cannot be forced to leave as a result of owning one.

Condo corporations usually have provisions for quiet enjoyment in either their declaration, by-laws or rules.

A tenant may have a dog that persistently barks and therefore generates complaints from other unit owners.

The condo corporation has an obligation to enforce their rights under quiet enjoyment provisions and could obtain a court order requiring that you as the unit owner to remove the barking dog.

Landlord and Tenant legislation also has quiet enjoyment provisions, however an application to the Landlord and Tenant Board can often take time and tenants have been known to prolong or stall proceedings.

If the condo corporation decides it cannot wait and goes ahead with an application for a court order you will be the one paying for the legal costs of that action.

If you do not pay these costs the condo corporation can attach a lien to your unit until those costs have been taken care of.

Perhaps you rent to a tent who decides one day he or she does not want to pay rent anymore. You as the unit owner depend on the timely rent payments to cover not only the mortgage costs but also the monthly maintenance fees of the condo.

The condo corporation will expect you to pay the monthly maintenance fees whether or not you are collecting rent from your tenant.

The financial institution holding your mortgage will also expect you to keep up the regular payments.

If you default on your monthly maintenance fees the condo corporation can and probably will obtain a lien on your unit and could possibly be in a position to sell your unit in order to satisfy your financial obligations to the condo corporation.

An application to the Landlord and Tenant Board can and often does take time.

It is not unheard of for a tenant who knows their way around the system to have an eviction order postponed and the hearing process opened up again.

This can eat up a lot of time. Time you may be in short supply of in your obligations to the condo corporation

A condo corporation could require yearly inspections on smoke and carbon monoxide detectors under a provision in either their declaration, by-laws or rules. Of course they would in all likelihood, notify all residents by posting a notice in all public places around the building of when an inspection would take place.

The tenant particularly a troublesome one, upon arriving home to find evidence of such an inspection could make a complaint to the Landlord and Tenant Board that you as the landlord did not give them the required 24 hours’ notice of this inspection.

Remember, you are the landlord not the condo corporation.

This situation and similar ones could be handled upfront with a clause in the tenants lease requiring them to abide and live by any provisions in the condo corporations’ declaration, by-laws or rules.

You would be wise when renting your Toronto Condo or Mississauga Condo to do a thorough background check on any prospective tenants.

As well as a credit check make sure you contact not only present landlords but also previous ones for references. You may get a glowing reference from an existing landlord who simply wants to get rid of them.

Do not hesitate to turn a prospective tenant away if you are not satisfied with their rental application. You may save yourself thousands of dollars in the future and considerable headaches.

It is not my intention here to scare out of buying a Toronto Condo or Mississauga Condo for rental purposes, but to make you aware of the conflicts between the Condominium Act and Landlord and Tenant legislation.

You may decide your path to wealth creation lies with a freehold Toronto homes for sale or a Mississauga townhouse.