I agree. I read the story and the lady even called Victim Services! Sorry lady, but Victim Services is not for situations like this. OK, it was messy and gross, and I guess the dog pee means you'll have to change out some of the furniture and carpet, but that is the risk you take when you rent out your basement. Next time maybe rent it out unfurnished to reduce the risk.
That is what security deposits are meant to cover. At least there was no damage to the walls. The owner sounds like a socialist.
Unfortunately it is my understanding that some provinces (such as Ontario) no longer allow damage deposits.
some people shouldn’t be landlords... She's saying she has to throw out all the furniture which seems like a bit of an emotional response; the 20,000$ the lady is claiming sounds excessive.
Ho Hum...this is common here in Ontario. With no damage deposits or cleaning deposits combined with restrictive garbage disposal in most areas now, tenants just leave crap behind.
Pretty awful really. In Alberta they do have security deposits and pet deposits and a lot better laws for landlords... this is why a scene like this makes the newspaper. I have 3 apartments very similar to this just this month. Sigh.
Landlord Rescue - Real Estate Blog
what's the logic behind Ontario disallowing damage deposits?
I think it was because it was considered a way around rent control. They were seldom returned to the tenant. You can still take the tenant to small claims court.
Just my two cents worth:
1) Thoroughly understand the CRA CCA implications (as was wisely suggested) as they may effect your principle residence deduction for the capital gains on the home when you eventually dispose of it. I used to do A LOT of tax returns but can't quite remember if there are implications.
2) If you do rent out all of the levels (i.e. vacate the house) I would confirm whether or not it would be considered a deemed disposition from personal residence to income generating property. I think it would. Confirm it.
3) Whatever you do make sure the basement apartment is legal. Lenders like to see income from legal apartments when the owner is looking to borrow against it.
Don't know if you need the income inclusion for borrowing, but sounds like you're investing with more to come so better to know that now.
4) Owner occupied rentals result in a better rate with some lenders i.e. some lenders charge a premium for residential rentals over owner occupied residential rentals. Not a huge premium but still a premium.
Well in areas where they have a cleaning or damage deposit, it seems to be less than a full month's rent. There are quite a few problems with tenants getting their deposits back. Not always but sometimes.
One of the people who emailed me during the time of the trademark dispute was complaining that they had been told their deposit would be returned but it never was.
On the other hand, it does of curse encourage tenants to clean and keep their places clean and leave you a forwarding address.
With last month's rent deposits that can only be applied to last month's rent it secures you more against skips or tenants who move and don't give you proper notice but then you get a messy place.
Realistically, IMHO nothing secures you from bum tenants. In the case of professional tenants they are more skilled at deception than you would imagine. It's a lucrative con these days. As far as I can tell there is not a jurisdiction that doesn't have these. There are stories from every state and province. The only real difference I can tell is how long it can go on. Most places have appeal processes in place with the courts even for straightforward landlord matters. You could conceivably appeal all the way to the Supreme Court with all kinds of judicial delays along the way.
So this is not an Ontario problem, it's a world problem as far as I can tell.
Landlord Rescue - Real Estate Blog
In business, nothing can protect you against lousy customers who don't pay, clients who steal, vandals who damage, or, as Berubeland recently discovered, crazy employees.
Renting is a business, remember that. It comes with risk, which you should try to minimize through techniques like proper screening...but it doesn't always work.
No one expects the government to bail out a business, why do you expect it for landlords? Heck, I'd bet everyone on this board has probably harmed some business in some small way with no qualms (taken office supplies like a pen at least).
I've owned rentals and businesses a long time, I've taken my fair share of lumps, but I also realize it's of being in business. I don't like, or advocate it, but I deal with it quickly, and try to avoid doing it again. Think of it as the price of education.
BTW, this is one of the reasons why cash flow and margins are important and a key reason why there are successful investors (business owners) who have proper ones versus the many unsuccessful ones who fail and complain about the risks.
Last edited by Just a Guy; 2012-07-10 at 12:02 PM.
I'm not JustAGuy (without spaces).
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