The Real Estate Podcast

Bulletproof Your Lease Contract | The Real Estate Podcast EP297

Ever faced tenant complaints, unexpected maintenance issues, or worse, being threatened with a lawsuit in your rental property? In this episode, Adrian Trott and Ariel Kormendy discuss the complexities of managing rental properties and the importance of clear policies and proper management. We share a real-life scenario involving tenants in a triplex where smoking complaints and maintenance issues arise. Learn why it's crucial to have solid lease agreements, know the Residential Tenancies Act, and hire reliable property management. We also touch on the importance of documenting everything for potential legal actions and provide tips for landlords to avoid common pitfalls. ************************ 0:28 – Introduction 6:51 – Smoking Complaints in a Triplex 7:46 – Importance of No Smoking Policies 8:22 – Getting the right representative and management property 12:50 – Importance of Cleaning Between Tenants 13:39 – Documenting Tenant Issues 15:54 – Outro ************************ Want more real estate podcast discussions? Watch it here: youtu.be/uLhNb8fdHt4 Listen to it here: http://www.soundcloud.com/ktrealty Catch clips and highlights of the show here: http://www.instagram.com/kormendytrott ************************ Our Social: Instagram: www.instagram.com/kormendytrott  YouTube: www.youtube.com/user/kormendytrott  Facebook: www.facebook.com/kormendytrott  Twitter: www.twitter.com/KormendyTrott Soundcloud:http://www.soundcloud.com/ktrealty  LinkedIn: www.linkedin.com/company/ktrealty  Pinterest: www.pinterest.ca/KormendyTrott  TikTok: www.tiktok.com/@kormendytrott?lang=en ************************ In 2011, Ariel Kormendy and Adrian Trott formed The Kormendy Trott Team, now often referred to as KT (thanks to our logo!). The foundation of KT is built on providing unmatched value and attention to detail in everything we do. From our ever-expanding, comprehensive list of exclusive services to our expertly trained team, you will receive the highest level of care throughout your entire real estate journey. Originally a team of two in Milton, Ontario, the KT Team has grown into a large team of exceptional REALTORS®, a client-care department, and now includes KT media, KT Commercial and KT Property Management to provide our clients with a complete lineup of genuine, professional, and proven services across Halton Region, Peel Region and the surrounding Regions within the Greater Toronto Area. We’d appreciate it if you’d subscribe and follow us for behind-the-scenes footage, real estate tips, industry secrets, exclusive listings, KT Confidential - the real estate podcast, and more!

Duration:: 17m
Broadcast on:: 22 Jul 2024
Audio Format:: mp3

So we just got off the phone with a tenant who was complaining about another tenant in the same building, smoking. And we thought, why not talk about it? So today, we're gonna talk to landlords about how to structure leases to avoid these problems and what to look for when buying tenanted properties. And we're talking to tenants to tell them what they can or cannot do. Enjoy. (logo chiming) Well, there's the solution. Everybody switched to vaping. That's what I did. That was my transition to quitting. Yeah. And then you lured me in with peer pressure to start vaping. No, no, don't blame me. I'm blaming you and David. Well, you can quit. Can I? Why don't you want to? No. Then you can't. (laughing) I wanted to quit smoking. That was always the dilemma, right? It's like, you maybe want to quit sort of 'cause you know it's bad for you, but you're not really, like you have to really want to. When did you start smoking cigarettes? How old were you? The first cigarette I ever had. Not the first one ever. Listen, let me tell him a fucking story. Holy swore. The first is gonna be a good podcast. The first cigarette I've ever had was at a church retreat. Oh. (laughing) Everything bad happens at churches and church retreats. It's like they're the most rebellious people. You're not talking about the priests now, are you? No, no, I never knew of any of that stuff back then. But it's always the pastor's daughter that's the worst and it's always church kids smoking and drinking in the back of the church and you know. So Robbie isn't as innocent as he appears. No, absolutely not. (laughing) No, I said pastor's daughters. So to be specific. So you definitely don't qualify. But yeah, anyway, so we read a church event. It was like an overnight retreat thing. I don't remember where it was, but I remember there's this one guy that he just smoked so he had cigarettes and I had one. And it just knocked me on my chair. Like I was done. I went in and I slept a whole night 'cause I felt like I was gonna throw up. How old were you? I have no idea. I would think 16, 17. Oh, wow. It's like that. But I never smoked a lot. And then maybe start smoking more regularly when I started working at McDonald's, which was probably in my late teens, 17, 18. But even then it was occasion. Well, when we met, you were full blown smoking like half a pack a day for sure. No way. Oh yes, you were. Not a chance. A hundred percent. Oh yeah, you were smoking a quarter of your pack and a quarter of mine. (laughing) Maybe if you wanna get technical. Yeah. Yeah, I have no idea how much I smoked. I didn't smoke a lot. Like I wasn't gonna do a pack a day ever. Ever. Half a, I don't think even half. Maybe like if I was partying or something. Right. But. Now you and your wife both smoked. She didn't smoke a whole lot. No. But you quit at the same time. No, she quit before me. Oh, did she? Yeah. Well, she had thyroid cancer and that scared her off if it was completely unrelated. Well, I imagine. But it still was enough to say, "Well, fuck this, I'm gonna stop smoking." Right. And then, yeah, I cut down. I didn't have a whole lot. But then I switched over to vaping for a little while. And then vaping, you know, I realized it was probably just as bad in other ways and was with no real knowledge just to the long-term effects of it. So I just stopped. And it was easier to stop that than smoking. Yes. But the reason we're talking about this today is because we had tenants complaining about other tenants and about smoking at a rental property. Right. I do enjoy cigars occasionally. Yeah. And cigars, they linger and smell more than cigarettes sometimes, right? Like, yeah. If you're gonna smoke anything, you should probably smoke a lot. Well, we had a cigar not long ago. Sitting on your front porch and one night. Yeah. And you busted out your humidor. And, yeah, I like the occasional one. We had a nice check. I was like a handful. Jack Daniels in cigar. That's a very, very medley thing to do. I think so. But it's nice to have on the golf course. I love smoking a cigar on the golf course. Yeah. But I can't remember the last time I had a cigar previous to that. It's been years. Yeah. And I woke up in the morning and all I could take, like my throat felt. You weren't inhaling over you. I nailed a little bit. Oh, that'll make you sick. I had Chris Corcoran over. I like a little bit of that. I had Chris over and he was sick. He was sick. Yeah, maybe be about his last name, in case people know him. I think he inhaled some and he instantly got nauseous. And I warned him. I'm like, do not inhale it. Is he not a cigar smoker? Like he's not smoked. No, he's very healthy. He's not smoked cigars before? No. Enough. I don't know if he's never, but it's been at least a decade. Like very long time. OK. But I warned him. I'm like, be really careful not to inhale. Because if you inhale it, you're going to be nauseous and you're going to ruin your night. Because it's very strong. Didn't make me nauseous at all. And I'm a pretty seasoned cigar smoker. Like when I go down to Cuba or whatever else. For us, it was the end of his night. Because he started to feel off. So I said, dude, just go home. I know the feeling I've been there. And I'm like, just go home. You're going to feel better. He's like, OK, OK. So he gets to the end of the driveway. And I just see him leaning over hands on his thighs. And he's like, you see, I saw him spit. And I'm like, oh, here it comes. He threw up at the end of the driveway and I rinsed it all down. And he hung around. He's like, oh, I feel so much better now. But yeah, that's not for the faint of air. Way to air his dirty laundry on air. Yeah. Oh, well, we're going to beat that his last name, right, Robbie? OK. Yeah. I know lots of chrises. I really do, because I know it's going to know. So we're safe. Anyways. And not Chris on the team. Just not. You cannot say that now it's narrowing it down. Is it? Yeah. Now people have, you know, Chris, Steve, whatever. Maybe it's not Chris. Maybe that's a pseudo name. Just keep bleeping out that every time we say Chris. Yeah. There you go. So in today's discussion, this was very-- You didn't let me finish my story. So I woke up. Very throaty. Yeah. I thought that was the end. No. And all I could taste was the cigar, OK? Yeah, that's the one thing I don't like about it. And I'm like, ah, won't be doing this again for a while. Yeah. OK, sorry. Go ahead. OK. So today's discussion was very impromptu. It was not on a list of discussions. But in between recordings, you got a phone call from a tenant at a property that's managed by rentee. Yes. And they were quite upset about claiming that another tenant in the building, this is a triplex, is smoking inside. Yes. And funny enough, we also have an email in our inbox from the tenant in the lower level, accusing the same person on the third level of smoking inside. But the person on the third level claims to never smoke inside. And he seems very convincing. We've had this discussion with him several times in the past. Meanwhile, the second level person, or main level person, also smokes, or one of the occupants smoke. And I don't know if everyone in that unit knows that that person smokes. But the point is, I think the important part of this discussion is, for landlords, is having no smoking policy, period. So what you're saying is in that property, there's a closet smoker that nobody really knows about. I think so. Ooh, the plot thickens. Yeah. And I just want to tell everybody. I think I'm going to. So the nice thing now is with the Ontario standard lease. Yes. It is specifically laid out there that either there is no smoking or there are smoking rules. And it's all laid out. But what happens when landlords-- and this is why you got to be careful both as a landlord and as a tenant to know your rights, know the Residential Tenancies Act, know what you're getting into. If you don't have proper contracts, proper documentation, how do you start holding people accountable to things that they should or should not be doing? Right. And the savings, it baffles me when people own an investment property and they don't hire the right representatives to take care of the property, to take care of their legalities throughout the process of having tenants, having money flowing, having repairs, all of these things, following rules, regulations. The cost of hiring a good realtor to represent you in the lease is-- Which is not very expensive in the big picture. And to hire a good property management company to make sure everything runs smoothly, have good communication, make sure your property's been taken care of, make sure the tenants are being taken care of, it just makes so much sense. So for all of you, trying to save a few bucks-- and I understand now you're in the red because the mortgage rates are high and all that-- but the long-term cost could be way more. If you start getting sued, you start having tenants that aren't paying their bills, you start having damage or maintenance issues at the property. So landlord beware. We have a property that we manage, the tenants. So we took this one on after the tenants were already placed there. So we had no responsibility to do with that. And the tenants were placed there by the landlord through Kijiji listing. And the tenants, overall, weren't bad. They paid their bills. They were always on time with their bills. But they were very neglectful with the maintenance and care of the property. And there was more people living there than I think they originally claimed. And the place was just packed full of stuff, literally to the ceiling, because it was way too small for them. They've since moved. They bought a house. They've moved out. But there's a significant amount of damage that I would consider far beyond wear and tear. And the landlord, during his time of managing it, was not a very good landlord. And the tenants hated him. They couldn't get anything done. There were several things that he was supposed to do that he dragged his feet on. Which we hear a lot of. So they very quickly became resentful and didn't care. So they, consciously or not, they just-- I think that translated into them not caring for the property as much as somebody who has a good relationship with their landlord. Oh, you don't want to respond to my email? You don't want to fix this thing? Well, I'm not replacing your furnace filter this month. It was not replaced. And I called them out. Actually, this is going to be a good segue into our next topic, where we talk a little bit-- or our next episode, where we talk a little bit about things that require maintenance, things that break down and such. It's a good segue into that. Yeah, so since us coming on board, we've had a great relationship with the tenants. Excellent relationship. They came back by the other day to drop off the keys. And I sat them down, and we had a really good conversation. And I can't count the amount of times I said, listen, we really like you. We don't want to be difficult with you. We just hate the landlord. But I was able to get them to agree, to be open to the discussion of compensating to some degree, some of the costs for repairs. I get asked that all the time from landlords or people thinking about investing. The what happens if issues come up. And you really have to start by, first of all, there's a documentation process that has to happen in the event that you do want to pursue some kind of legal action against anybody in anything, any circumstance. But time is money, so as an example, if you have a condo unit and the tenant moves out, and everything is fine, more or less, it just needs a deep clean, which it always does. Yeah, like never have a tenant moving in the day after one moves out. It's not in your best interest to do that, even though you want a quick turnaround to minimize your expenses and your costs. If you have one tenant moving out, and then the next day, another tenant moving in, is that a good start to the relationship? It can be, but it depends how desperate that new tenant is to get in there. Well, it depends on the tenant is leaving too. Have the place cleaned, deep cleaned. That's my point. Have the cabinets cleaned, have the appliances cleaned. Certainly the bathroom and the floor is in the kitchen. But anyways, let's say a tenant is moving out. The unit is fine, it just needs a cleaning. But somewhere in the process, there is a hole in the wall. Right. Maybe from moving, right? The sofa, corner, bank, into the wall. It was there when I moved in. Well, if you hired a property management company that documented those things, and you have before photos, and everybody signed off on it, then you would know what the condition is when you moved in. But so let's say that was done. And now there's a hole in the wall at the move out process. How much does it cost to fix a hole in the wall? Like a three inch by three inch hole, 220 bucks. Yeah, a couple hundred bucks. If you're handy, you could probably do it yourself for 20 bucks. Yeah, some people are, and they will, and they do. They have those beautiful patches now. Those, you just stick it on and just fucking paint over it. Like it's so easy, right? But let's say it costs you two, 300 bucks. Yes, you can go to the tenant and say you are responsible. But let's say they put up a red flag or a roadblock, and they say, "No, I didn't do that. "No, it's wear and tear." No, it was there, whatever. Is it really worth it? Well, that's what it comes down to. How much is it going to cost? And is it worth your time and money? Because there's a cost involved in going through the process. Especially if you're not representing yourself. And going through the landlord tenant board is not the easiest thing. And you've got to think it's going to take at least six months. Minimum six months. And then you've got to prove it, and then you have to... Well, that's another thing is documenting, right? Like we document basically every conversation. We save every email, we take photographs of free reports. There's reports. You need something so that if it does go to the landlord tenant board, that you have something to substantiate your argument. Otherwise, it's just hearsay. You need evidence, right? Right. Right. So... Anyway, don't smoke in your unit. Don't smoke in your unit. And make sure you have no smoke in clause. That's all. Oh, and just for the record, the tenants we're referring to. We're also not placed there by us. They were there when we took over the management. And I believe all three of them were there before the current owners bought the building. Oh, so the owners took over the tenants? Yes, these tenants have been there for several years. And we took over from another property management company. Correct. So, if you're buying a property, my recommendation is buy something that's not tenanted. Or do you do diligence as much as you can on the people that are currently living in your home? Right. Like, did they look at the lease agreements? Yeah. Do they know what to look for? I want to copy of the supporting documents that were reviewed when you took this tenant on. I want a copy of the invoices that were done during this period of time. The rent collected during this period of time. Yeah. Ask for. I imagine a lot of that didn't happen. Right. I imagine most people buying an investment property and they are assuming the tenant that they are not doing the property due diligence when buying it. I agree. So, call me if you need information. All right. That's a good way to end it. Bye. Ciao. Thanks for watching or listening to this episode of KT Confidential, the real estate podcast. We hope you got some value out of it. We appreciate your input and questions for upcoming episodes. So leave a comment and have a good day. (beep) *beep*