Are you managing your own Rental Property?

Date: January 23, 2009

Author: Lawrence Brown
Website: http://www.westwyndrealty.com

ABSENTEE OWNER? MANAGING YOUR OWN RENTAL PROPERTY?

If so, here is a bulletin you should read. Although the following story is written from a strata property perspective, the details apply equally to all forms of rental property. The following is a true story — you will find it interesting and valuable as a non-resident owner.

Recently one Saturday morning, our office received a telephone call on our emergency line that there was a water leak in a Vancouver building we manage so we dispatched a restoration contractor to mop up the water. The contractor had to access several strata lots to get the job done, and, at one unit, no one answered the door and a locksmith was called to “pick the lock”. Once open, the restoration contractor stepped inside and, to his horror he discovered a fully equipped meth lab.

The police and fire departments were called and the building had to be evacuated. The fire department’s HAZMAT team gingerly dismantled the meth lab. The City then advised that the strata lot could no longer be occupied and, further, the entire strata lot has to now be “deconstructed” and rebuilt. The owner of the strata lot will be facing a cost estimated at about $100,000 to reimburse the City and to reconstruct. On top of this fines were levied by the strata corporation and other legal consequences are pending.

The non-resident owner was in shock to learn all this. It turns out that little was known about the tenant other than he had paid cash for his monthly rent payments and security deposit.

No doubt the vast number of renters in strata corporations are properly screened by non-resident owners such as yourself, or their agents, and in reality there are likely only a few bad apples. Nevertheless, let this true episode serve as a huge heads-up to you (and your rental agent if applicable) that renting your apartment involves a lot more than merely collecting the monthly rent.

You ought to be aware also that most strata corporation insurance policies are now imposing huge deductibles ($50,000 in some cases) for damages arising from illegal operations. In some policies, the coverage is denied altogether. You can be sure that your strata council is not going to step up to the plate and have the strata corporation pick up the tab if your strata lot is improperly managed. Also, be aware of a very significant court case recently heard in the Supreme Court of British Columbia involving insurance claims. The essence of this case is that if an occupant of a strata lot is responsible for the cause of an incident and the insurance of the strata corporation has a deductible, the owner is responsible for paying the deductible. That would be you if your tenant is the culprit for some incident.

Accordingly, we urge you to properly screen your tenants, obtain background and reference checks, and, make frequent inspections of your rental premises. Collecting the rent is the least of your worries given the above facts.

To make it all very simple and CAREFREE....hire Westwynd Realty to professionally manage your investment properties