Five Ways To Get Screwed By Tenants

There’s no excuse for a real estate investor not to know the Law. In Alberta you can read it for free online, download it or get it shipped to you for anywhere between $2 and $6.

In Alberta there’s five documents you need to be aware of, the Residential Tenancies Act (the RTA) and four supporting documents. Each of them is a big potential pitfall if you’re not careful.

Obviously, I’m not a lawyer or professional and this is not legal advice. Go see a lawyer. Call the government.

1. The Residential Tenancies Act (The RTA)
   This is the real core to the laws which tenants and landlords have to live by in Alberta. The last time I counted its in 75 sections with a similar number of pages. I last read through the whole thing in 2007 after the changes to the Act (when they changed the limit to rental increases). I actually sat down the day it became law and went line-by-line between the old and the new versions to make sure we didn’t miss anything.There’s seven sections:

   Part 1 Periodic Tenancies
   The important sections here include termination and notice periods, implied periodic tenancies and notice of increase in rent. One important thing to note is that monthly notices must be served for the start of the month. That means that if you miss it, you may have to wait the notice period plus another 29 days until your notice is valid.Part 2 Obligations of Landlords and Tenants
   Locks, entry and notices, subleases and inspection reports. A couple of important quotes and notes:

   A landlord and tenant shall inspect the residential premises within one week before or after the tenant gives up possession of the residential premises and the landlord shall, forthwith on completion of the inspection, provide the tenant with a report of the inspection that describes the condition of the premises.

   Don’t miss this one. It’s your safety blanket for tenants who damage your properties. Go the extra mile and take photos/video.

   Except as otherwise permitted in this section, no landlord shall enter residential premises rented by the landlord without the consent of the tenant or of an adult person lawfully on the premises.

   There’s a lot of reasons why you can enter. It’s a powerful section and you should use it responsibly. One secret tip: when a tenant asks you to repair something, they’re automatically giving you or the repair guy to enter the premises. Every so often, you’ll hit a tenant who is asking for 24 hour notice, and they’re not entitled to it. If you’ve also tried to book trades, you’ll know how difficult it is to schedule repairs, and asking the plumber to serve a 24 hour notice is not going to work very well.

   Part 3 Remedies of Landlords and Tenants
   All the reasons you or a tenant can terminate a tenancy and how you deal with them. Read it, learn it and ensure you understand the meaning of the phrase substantial breach.

   Part 4 Security Deposits
   This part is boring, the important parts are in the Security Deposit Interest Rate Regulations. What you need to know is that right now there is no interest payable.

   The annual rate of interest for a year to which subsection (1)(e) applies is the rate that is 3 1/2% below the rate of interest that is in effect in December of the previous year for Alberta Savings Certificates or any security issued in that previous year to replace those certificates.

   Part 5 The Provincial Court
   This essentially only tells you that if you don’t use the RTDRS you should use the Court of Queen’s Bench. The RTDRS is a much better tool anyways.

   Part 5.1 Residential Tenancy Dispute Resolution Service (RTDRS)
   This part isn’t very interesting, but the RTDRS site and the application forms are quite good.

   Part 6 General
   This is a little boring too, but it details notice information, offenses, limitations, and some other small items.

   Part 7 Transitional Provisions, Repeal and Coming into Force
   And this area will let you know how often the legislation has been updated.

2. Residential Tenancies Ministerial Regulation
   The RTA is the meat and potatoes of the law, and it’s not complete without the Ministerial Regulations. That’s the gravy which actually spells out some of the details like notice periods, limits on raising rents and details for what notices have to say. There’s also a couple of templates there.
3. The Voluntary Code Of Practice
   This isn’t something I’ve read in detail, but there are some good ideas. If you want to play it straight, and avoid nasty things like your late fees being overturned by a judge or RTDRS mediator, use this. One great thing is the links to legal cases. In particular, check out the case of Cracknell v. Jeffrey (2001).
4. Security Deposit Interest Rate Regulation
   Again, right now there is no interest payable for security deposits as far as I know. Here’s the quote:

   The annual rate of interest for a year to which subsection (1)(e) applies is the rate that is 3 1/2% below the rate of interest that is in effect in December of the previous year for Alberta Savings Certificates or any security issued in that previous year to replace those certificates.

5. Residential Tenancies Exemption Regulation
   This is only a couple paragraphs, and unless you have a hospital, a cancer treatment center or a property in Banff, it likely apply to you.