Take these 10 steps to avoid ending up with a ‘professional tenant’

By Paul Russell, LegalMatters Staff • If you have a house or apartment to rent, rely on your brain and not your gut when choosing a tenant, or you may find yourself owed money in the future, says Toronto paralegal Joyann Oliver.

“Finding the right tenant is probably the most important thing a landlord is going to do, but sometimes they put the least amount of work into it,” says Oliver, co-founder of JNR Legal Services.

“It’s like a marriage, where no one thinks about the end of the relationship,” she says. “As a landlord, you need to go into it thinking about how it could end, and to prepare yourself so you can avoid having someone walk out, owing you thousands of dollars in rent but leaving you with no means to collect it.”

Oliver tells LegalMattersCanada.ca that people renting houses or units should follow these 10 steps.

• Create a standardized rental application. “That will allow you to compare multiple applicants, so you can choose the best fit for you,” says Oliver, noting the application should include names of everyone who is going to be residing there, as well as the name and contact information for their employers. “You need to verify the prospective tenant has been employed for at least six months, and you need to do a cost analysis of their level of income, to see if they can afford to rent your house or unit,” she says. Oliver gives the example of someone making $30,000 yearly will likely run into financial troubles if they have to pay $2,100 a month in rent for a unit. “Just use common sense,” she says.
• Be sure to find out an employer’s name. If the tenant turns out to be delinquent in paying rent, Oliver says the homeowner can go to Ontario’s Landlord and Tenant Board to get an eviction notice. “You can also get an order requiring the tenant to pay the rent owing, and if you know who his employer is, you can file that Order with the Small Claims Court and commence enforcement proceedings, such as garnishment. If you know who the employer is, you can garnish the tenant’s wages,” she says.
• Verify a tenant’s identity. Oliver recommends asking for a copy of the tenant’s passport or driver’s licence, to avoid those using a false name when looking for apartments. And if that person leaves with rent owing, she says they can be tracked down through a process server if you have their government-issued identification.
• Take cheques for the first and last month’s rent. While tenants are not required to provide post-dated cheques for rent, it helps with identification to accept only cheques for the first and last month and not cash. “If it comes down to you doing an enforcement proceeding against the tenant to get your rent money, you will have their banking info, so you can garnish their bank account for the amount owing,” says Oliver.
• Get references from the tenant’s previous landlords. Oliver says landlords have to verify the references are genuine, and that the person making the reference actually owned the previous property in question. :”You can have your real estate agent or real estate lawyer do a property search to make sure that person actually owned the property,” she says.
• Don’t put too much emphasis on credit score. “A credit score gives you an idea about the person’s fiscal responsibility, it’s not the complete picture,” says Oliver. “A person may have a low credit score, but will still be able to pay their bill.”
• Tenants need to sign a formal lease agreement. Oliver says the Ontario government has a standardized agreement that all landlords should use, as it sets out the rights and responsibilities of both the landlord and tenant.
• Put the utilities in the tenant’s name. If the tenant is responsible for paying for hydro and gas or are renting the entire house, Oliver says it is important that utility accounts be set up in their name. “Then, if the tenant does not pay the bill, the homeowner will not be liable for it,” she said. With Toronto water charges, however, the unpaid amount will go automatically to the property tax, she says.
• Add additional terms as needed. “The landlord and tenant can agree to add language about the rules around smoking, or who is responsible for mowing the lawn or doing snow removal,” Oliver says.
• Don’t violate the Ontario Human Rights Code. The Ontario government identifies 15 prohibited grounds of discrimination, such as race, religion and sexual orientation, and Oliver says landlords have to be careful not to violate the rights of those applying to rent a unit. “My advice would be that if you think your question to a prospective tenant might be in violation of the rule, just don’t ask it,” she says.

If landlords follow her 10-step plan, Oliver says they stand a much better chance of having a good tenant.

“Some landlords just speak to a would-be tenant for a few minutes and then agree that person can move it, as they feel that they can trust them. They could very well end up with a problematic tenant, or what I would call a ‘professional tenant,’ who moves from one apartment to another leaving behind unpaid rent and utility bills,” she says. “Landlords really need to do their homework to verify their tenants.”