How to avoid the tenant from hell

Sunday, March 16th, 2003

Rental Property: Reporter Wyng Chow picks up some pointers for new landlords on choosing their renters

Wyng Chow

CREDIT: Ian Lindsay, Vancouver Sun Apartment building owner Elizabeth VanderZaag works in the planter she added to the parking area.

In the thriller Pacific Heights, a couple’s dream house turns into a nightmare as they try to evict a deadbeat tenant, but find no help from the legal system.

Actor Michael Keaton plays a sociopathic tenant who weasels his way into an apartment in the couple’s home, pays no rent, drives out other tenants and ultimately gets the owners barred from their own property.

While overdramatized for entertainment value, the scenario isn’t so far-fetched for many Greater Vancouver landlords, who can relate their own “tenant-from-hell” stories.

But, according to the B.C. Apartment Owners and Managers Association, a lot of the pitfalls associated with being a property owner can be avoided through better screening of tenants.

“There’s a fair amount of fraud you have to watch for out there,” said Lynda Pasacreta, the association’s chief executive officer. Her group has 1,200 members representing 77,000 rental suites, the majority of them in the Lower Mainland.

“Some landlords have some horrific stories to tell. You really need to understand the business, including carrying out proper screening, along with reference and credit checks.

“You have to do a lot of due diligence in order to bring in a good tenant who you want to stay for a long time. That should be the goal of most landlords.”

Pasacreta was reacting to recent reports that a record $394.5 million worth of rental apartment buildings sold in 2002 in Greater Vancouver, as investors — novices as well as sophisticated individuals — discovered a safe haven for their money during times of stock market volatility.

The 142 properties changing hands marked a 45-per-cent increase from the previous year, when 98 units, totalling $190.5 million, were transacted. The 2002 performance was the best since 1992 when 134 buildings, valued at $309 million, sold during a hot market then fuelled by a flood of Asian investment.

Becoming a landlord entails much more than just figuring out how much rent to charge, Pasacreta said. Landlords must also educate themselves about municipal bylaws, taxes and B.C.’s landlord and tenant legislation, which is currently being amended.

For novices like Elizabeth Vander-Zaag, who paid more than $500,000 for a 90-year-old, 12-suite rental building on Fraser Street, it also helps to be handy with tools.

“I do a lot of my own repairs,” she said Friday. “But I have a lot of time.”

In Pasacreta’s view, the most vital aspect of being a landlord is to learn how to properly screen tenants, since once you rent a unit out to them, it is often extremely difficult, time-consuming and expensive to evict them.

Under current legislation, it could take up to six months to get rid of an undesirable tenant, even if that person were involved in illegal activity such as a marijuana growing operation.

Tenants who fail to pay rent can also stall for months before the bailiffs — paid by the landlord — are authorized by the courts to remove tenant belongings from the premises and the locks can be changed.

“Some tenants who are served with eviction notice just move on,” Pasacreta said. “But some who have learned how to [live rent-free] can hang on for three to six months, costing landlords $3,000 to $5,000 and more, and you’re hoping they won’t cause any damage.

“They know the system and milk it for what it’s worth until it’s time to move on.”

Pasacreta said it is essential to do credit checks on prospective tenants to find out, among other things, how they pay their bills, whether they have ever gone bankrupt, if there have been a lot of other inquiries about their credit as well as their previous addresses, then comparing the latter with information they have volunteered.

Employer references should also be checked closely, including asking a tenant’s boss how that employee takes care of work tools and how they get along with fellow workers.

Other advice includes:

– Always insist on two landlord references, the current and the previous one, since the most recent landlord may tell fibs just to get rid of a bad tenant.

– Demand to see picture identification, such as a driver’s licence, and check it closely, since these can easily be forgeries. For example, real B.C. driver’s licences have a holograph of the word “British Columbia” as well as seven numbers. Phoney licences have either six or eight numbers.

– Do not accept cellular telephone numbers given for references; insist on getting land lines that can be verified through the phone book.

Vancouver commercial realtor David Goodman said many landlords don’t like to personally “put up with any b.s.,” so they hire professional property management firms to look after rentals.

“A lot of landlords don’t want to have to deal with [tenants’] NSF cheques, stealing coins from the paid laundry or with plugged toilets,” said Goodman, who sold 13 rental apartment buildings in Greater Vancouver in the past five months.

“But others know that s–t is going to happen once in a while, and it’s to be expected. It’s the nature of the business. You live with it.”

The provincial government says amendments to B.C.’s Residential Tenancy Act, scheduled to be implemented this summer, are designed to streamline regulations, strengthen protections for both landlords and tenants, and help revitalize investment in the rental housing market.

Issues addressed by the changes include screening fees, security deposits, fair rent increases, inspection of premises, pets and illegal tenant activities, such as marijuana growing operations.

© Copyright 2003 Vancouver Sun

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