Four Legal Forms Every Landlord Needs
With Edmonton having the lowest tax rate in Canada and a steady increase in wages, it is no wonder investors are looking toward Edmonton’s lucrative real estate market. Unfortunately being a landlord is not as easy as one may think. Many actions have to be followed in accordance to the Residential Tenancies Act. Failure to act in regards to this law can have dire consequences.
We have put together a list of 4 legal documents that every landlord should have and when they should be appropriately used.
1. Residential Rental Application
A Residential Rental Application is used by landlords to collect information on potential renters. This document is very important as it helps screen possible tenants. Landlords can see the renter’s employment history, income, references and get written consent to do a credit and criminal background check. Some skip this step since it requires extra time and money; however not doing these screenings can result in getting the wrong tenant that is late on their payments or cause costly damages to the property.
*Tip: Many people put their friends as references so that they will give them a good word. Instead, try to get references from the renters past landlord. This will allow you to get a real glimpse of what type of tenant they are and if they are right for your property.
2. Residential Rental Agreement
Once you have found the right tenant, the next step is having both parties sign a Residential Rental Agreement. This contract clarifies the expectations for both parties during a residential tenancy and lowers the likelihood of any disputes or misunderstanding at a later date.
A Rental Agreement should include:
- Landlord, Tenant and Property Information: Contact information for both parties, as well as a description of the rental property.
- Lease Length: How long the tenancy will be, including whether it will automatically renew or if it is a fixed term, and notice details.
- Rent Price: How much the rent price will be per month, and if utilities are included. Also, if there is a fee for late payments and if the landlord requires a damage deposit.
- Permissions: This includes whether the landlord will permit certain things, such as smoking, pets, home businesses, or improvements to the rental property.
- Rules and Responsibilities: The responsibilities for the tenant and landlord, such as care and maintenance of the property, and overall expectations from both parties during the course of the lease period.
*Tip: Go through the lease with your tenant to ensure that they understand the terms and to answer any question they may have. Once signed by both parties give your tenant a copy of the agreement.
3. Rental Inspection Report
After the Residential Rental Agreement has been signed by both parties, landlords should do a walk-through of the residence with the tenant. This allows you to record the condition of the rented residence before the tenant moves in. When the tenant moves out you will have a reference of how the place looked and if any new damages have occurred you can deduct it from their damage deposit.
*Tip: Make sure you do the walk through with the tenant and have them sign the report. This will make the Tenant responsible if they caused any damage.
4. Eviction Notice
Even after doing your due diligence you may still be faced with a bad tenant that you have to evict. In cases where the tenant has severely damaged your property or physically assaulted you, you can give them a 24 Eviction Notice to vacate your property. In other cases such as late payment, the eviction process becomes more complex. In this case you will have to give the tenant a 14 day notice. When filling out the Eviction Notice for late payment ensure that you list how much rent was due, when it was due and property information.
*Tip: Evicting a tenant can be costly from the $75 filing fee for a hearing to hiring a bailiff to escort your tenant off your property. Plan ahead in case this happens to you by setting aside some extra money to cover these expenses.
Real Estate investing can be risky however in the words of Andrew Carnegie the wealthiest man in America during the early 20th century, “90 percent of all millionaires become so through owning real estate.”
Investing always has some risk to it, but being prepared by having these 4 legal documents will alleviate some of this risk. There are many resources that can get you started such as LawDepot the leading publisher of online legal documents. Whichever resource you choose, ensure you have these legal forms handy as you never know when you might need them.
Article by Liv Real Estate