by Jim Garnett, Canadian Tenant Inspection Services Ltd.
When was the last time you inspected one of your rental units?
If you can’t put your finger on the date, then you might be in for a surprise, as well as some unexpected expenses, potentially dangerous situations, litigation and more. While you might consider insurance as your protection of last resort, it does not cover every contingency. Some insurance companies consider regular inspections as evidence of the landlord doing their due diligence to ensure that the property is being properly maintained. The insurer could use failure to inspect to disallow a claim, which could leave you responsible for any damages.
“We recommend owners have their rental dwellings inspected three to four times per year to ensure the property is used for its intended purpose”, says Brian Paetkau, Property Manager, Hugh and McKinnon Realty Ltd. “There are lots of examples where initially there were no issues with the tenancy. Over time, the dynamics changed and problems were identified through due diligence in conducting inspections.
Examples include drugs and cultivation of marihuana, too many people living in the unit, unlicensed vehicles on the property, pets, and smoking. As property managers, we are able to monitor and effectively manage a property by having regular inspections conducted. In our case, we outsource the inspections to professionals.”
Regular inspections can protect you, your building, your investment and your tenants from a host of problems. Consider the following scenarios that can occur when you do not follow a regular inspection schedule of your rental units:
Residents in a new high-rise wondered why so many subjects of questionable character were coming and going from their building, and why there was an increase in property crime. Inspection of a rental unit determined that an 81-year-old tenant was sleeping on a cot in his living room because he rented out his bedroom to a prostitute who was bringing clients into the building.
Patti lived in the penthouse of a luxury high-rise overlooking the river. After living there for about three years, Patti realized the unit was too big for her. Rather than sell, she chose to rent the luxury penthouse out and purchased a smaller second unit in the building for her personal use. Patti did not conduct regular inspections because she assumed such an expensive rental unit would only attract well-meaning professionals.
A lovely young couple who presented very well looked at the unit with one of their mothers and rented it with an assurance from the mother that she would help out financially to make it work if necessary. Patti learned the hard way when the police executed a search warrant and dismantled a large marihuana grow operation. Those “well-meaning professionals” who “presented very well” took advantage of the privacy of the penthouse to conduct their illegal activities resulting in thousands of dollars in damages. A well thought out investment strategy could have been successful had Patti conducted some due diligence by scheduling regular inspections.
A unit in a high-rise building was due to be inspected as directed by the property manager. The Inspector called the telephone number for the tenant who answered the telephone and told the inspector that he no longer lives in that unit and is currently living in Scotland. The tenant gave the Inspector the name and telephone number of another man.
The Inspector made an appointment with the second man and determined that the original tenant had signed the lease with the property manager and had sublet the unit to the second male who had been residing there all along. The original tenant had no intention of living in the unit. Due to the history of the second man, it was unlikely that a landlord would have accepted him as a tenant, hence the deception.
Had the property manager not insisted on inspections of the unit, the deception would not likely have been discovered. The inspector, a former police officer, confirms this is a common method for people involved in criminal activity to conceal their whereabouts from authorities.
A unit in a Burnaby high-rise was rented to a male with no pets. An inspection identified the fact that the tenant had a dog. The landlord has stipulated “no pets” as a condition of the tenancy and therefore no pet deposit was retained.
Damage to unit or building
Tenants paid little attention to water stains that were forming on the ceiling of their rental unit. An inspection identified the stains as a water leak and alerted the owner who initiated an investigation with the building strata. The taps in a vacant unit on an upper floor of the high-rise building were identified as the culprit and repairs were conducted before further damage was realized.
Landlords who are not visible to their tenants are often the target of misuse of their rental dwellings. If the landlord doesn’t pay attention to what’s happening at their property, activities may be occurring at the residence that breach the policy terms and void the policy.
Subletting the space
A unit in a Vancouver high-rise building was being used as an Airbnb. The building had a concierge service, but the concierge was afraid of the operators of the Airbnb so he ignored the activity and did not report it to his superiors. Residents of the building observed people coming and going with luggage on a regular basis and reported the activity to the strata as Airbnb was not allowed under the strata’s by-laws. As the condo was not being used for its intended purpose, the owner’s insurance liability was brought into question.
Statement from Landlord
“Many landlords have experienced difficult, maybe even abusive, tenants. They will understand me when I say I was reluctant to personally serve them documents to terminate their tenancy”, says Sarla Ram, Landlord. “I wanted to avoid confrontation or a volatile situation. Therefore, I made the decision to hire a professional firm who would serve the documents and interact with the tenant.”
As a result of dealing with an independent third party rather than the landlord, “The tenant’s behaviour was more co-operative”, says Jim Garnett, President, CTI Services.
As you can see, the dangers of failing to conduct regular inspections of your rental units are all too real. These real-life scenarios will not happen with every rental unit, but do you really want to take that risk? All it takes is time and effort to prepare and follow an inspection schedule. Learn from the mistakes of others so that you can avoid the consequences of failing to conduct regular unit inspections. If you are unable or unwilling to conduct the inspections, then you should hire an accredited company who specializes in this service.
Jim Garnett is the President of Canadian Tenant Inspection Services Ltd. He can be contacted at 778-840-7611, email@example.com or visit www.ctiservices.ca.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.