Thursday, September 15, 2011

Do not become a landlord in Quebec

My boyfriend and I purchased a property with his parents a few years ago as an investment. We rented it out, and for the first year everything went great. We had great tenants who paid their rent on time each month and caused no damage. However, we were not so lucky with our next tenants and eventually had to evict them.

In other countries, it's very easy to have an investment property. Often times there are property management companies that will do all the work for you, for a percentage of the rent. It's often affordable.

In Quebec, however, this is not an option. Unless you own many properties, and they generate a lot of income, then it's just too expensive to hire a property management company. For instance, if you rent out a property for $1000 a month, a management company will take at least $200 from you each month. They often don't handle everything either.

Also, if you only have one property to rent out and you want it insured, you will most likely have to pay for it yourself. You can't force your tenant to get insurance. I phoned insurance companies for quotes, and I was told it would cost around $300 for a policy that would cover fire, water damage etc. I was worried what would happen if my tenant burnt the building down. It was a townhouse condo, so if it burnt down, and thus damaged all the neighbours houses, the costs could have potentially fallen on us.

So if you want to have a company manage the property for you, and you want insurance, then after all your bills (in our case $300 a month for property tax, school tax and condo fees) you will not be left with enough money to realistically call it an investment.

But all of the above are the least of your worries when it comes to renting your property out in Quebec. This province has insane laws that protect the tenant beyond what I would call sane or fair.

You are supposed to provide your tenant with a lease. While there is a section that includes the date (start and end), it's completely irrelevant because there is only a beginning to a lease, never an end. In other words, the lease is automatically renewed every year forever, or as long as the tenant wants to live there.

Although it is "your" property, and "your" investment, the tenant can do pretty much whatever they want in there. It is illegal to force someone to give a damage deposit. Therefore, if they destroy your property it becomes your responsibility to get the money off of them to pay the damages. If the tenant is on welfare, it is highly unlikely that you will get anything back at all.  I spoke to several people at the Regie du Logement and they all said the same thing. It is also illegal to force a tenant to give you post dated cheques. Also, although technically you own the property, you can't ever get rid of a tenant unless it's through eviction for valid reasons or because you or a close family member (sibling, parent or child) plan to move in. Therefore, if you decide that you no longer want to be a landlord and would like them to leave so you can fix up your property and sell it, too bad! They can legally stay there as long as they pay rent. Period. So if you decide to sell the place, you are at their mercy every step of the way. Every time you want to go to the house to do any repairs, schedule potential buyers for visits etc. you have to give the tenant 24 hours notice. You therefore cannot ever guarantee that the house will look clean and presentable.

If you have a problem tenant, that's where things get really fun in this province. If your tenant is three weeks late in paying the rent then you can go to the Regie du logement and file an application for $66. Then approximately six weeks later there is a hearing. If the tenant has paid the rent and court fees then the case is closed and the tenant can stay. If the tenant pays the rent late every month then you are supposed to send them at least three letters asking them to pay on time. If they continue to pay late, then you can file an application, again for $66, and then in six weeks there is a hearing. If you can prove that the tenants late rent payments cause you "injury" (in other words, if it's your only property and you rely on the money to pay bills etc.), then they might evict the tenant.
If you own multiple properties and do not suffer financially at all, then it's less likely the court will side with you. 

Approximately 99% of the time the judge will issue a court order which states that the tenant must pay their rent on time from now on. If they default on the order then they will be evicted. However, they can also appeal the verdict and cause delays. The laws have changed a little over the last couple of years though, and a tenant can't cause delays unless they have valid reasons. It's a lengthy process every step of the way. If the court decides to evict the tenant, then it's still not an immediate thing.  If the tenant is on a six month lease then they are given 30 days to move but if it's a year lease then they get 3 months.

The 30 days starts from the date on the verdict though, so even though you wait two weeks for it to be mailed to you, the date on the verdict is a week earlier. So that only gives the tenant 3 weeks to find a new place to live (if they have a six month or less lease). That is the only aspect I've seen in the laws that harms the tenant.

In my situation, we stupidly rented to someone without doing thorough background checks. She was a single mother with four children on welfare. To make matters worse, she had no job history, bad credit (which she told us up front) and no history of apartments she'd lived in. We demanded references, and when I phoned them both up, it was obvious that they were fake as they were unable to answer any of my questions properly, to the point that there were pauses and whispering in the background!

Warning bells went off in my head, and I definitely did not want to rent to this person. However, there were three other people who owned the property with me and I was outnumbered. Everyone else wanted to give her a chance. They felt sorry for her, and felt that sometimes people just need a break.

She paid us the first months rent before moving in. After that, however, every single month there after she was late. In all fairness, after 3 or 4 months we could have taken her to court and had a court order forcing her pay on time or else she'd be evicted. But we didn't know our rights at the time, and thought it would get better. It didn't.

After 7 months of late payments, we wrote a letter to her telling her we needed the money on the 1st. Then we had numerous conversations with her every few months telling her the same thing. Every month she had excuses. She was sick, her kid was sick, she couldn't make it to the bank, or sometimes it was just that she didn't have the money. She changed her phone number every few months and hardly ever answered the door so getting in touch was very difficult. Consequently, month after month we were left waiting at least a week for the money, never knowing when we were going to get it.

We let it go on for two years, with numerous letters, and phone calls. Each time she would say she'd change. I wanted to file the application after a year and a half into the lease, but was outnumbered again. This time the tenant was pregnant and the others didn't think it would be very nice to evict her at that time. So we gave her a "final" chance. We wrote another letter saying that we were going to file an application for eviction with the Regie if she continued to pay her rent late and that we were being nice trying to give her as many chances as possible.

She continued to pay late (in two years, she only paid the rent on time twice). After three more months of late payments we finally filed an application with the Regie du logement. She was absolutely frantic when she got the copy of the application and realized that we were trying to get her evicted.

She said that from now on she would pay us with post dated cheques. She also gave us money to pay for some of the damage her and her family had caused. Someone had kicked in the front door, and it was damaged beyond repair. It was secure, but needed to be replaced. She gave us $1000, which covered the cost for the door. However, there was also about $1000 worth of other damage which we never received.

So we had two post dated cheques from her, and she had given us the damage money to cover the front door. She seemed like she was really making an effort this time. We told her that if she paid us all the money for the damage and our court fees that we would cancel the application. However, on the day before we could cash the first cheque she called us up and told us not to cash the cheque because the money wasn't there!

That proved to us that she wasn't going to change, so we didn't cancel the application. At the court hearing the judge sided with us, as we had 10 or 11 receipts in the last year showing late rent payments. The tenant was not at all apologetic and acted like we were evil bastards for trying to steal money out of her kids mouths (by asking for the money to pay for the front door she damaged!) and by being so strict about asking for the rent money on the 1st.


The judge asked if there was an alternative date that could work for all of us, instead of always having to pay on the first of the month. We told the judge that in fact, we had tried to change the date before. I think we tried making it the third, or possibly even as late as the seventh. We tried it, and it didn't work.

The judge asked her if there was any way she could pay on the first of the month as the lease stipulates. She was unable to convince us or the judge that she could. So she was evicted.

As could be expected, she was very bitter about the whole thing and was very hostile with us when we went to her house after that. We expected rent money while she was still living there (even though legally she was only allowed to live there for half the month). Legally, we were entitled to a full months rent. She refused to give it to us. She simply asked us how she was supposed to pay for somewhere else to live and pay us too. As if that was our fault!


Two weeks before she was supposed to be out of the property one of her relatives called us and begged us to let her stay until she found a new place to live. I was against the idea, and had no sympathy after the way she had treated us. But once again, I was outnumbered and everyone else thought that it would be kind to let her stay in the property for a bit longer as she had so many children and they didn't want to see them end up on the street.

A week before the date that we had agreed was the absolute longest she could stay there I contacted her to inquire as to whether she had found a new place to live. At that point it became obvious that she had no intention of leaving and that if we allowed her to stay any longer then the court would consider her a tenant again and a new lease would have to be drawn up!

So we had to hire a bailiff. This was yet another lengthy and expensive process. When we contacted the bailiff, he took two days to deliver a notice to them saying that they had 3 days to move out, starting on Monday - apparently weekends don't count!

Of course, they still hadn't vacated the property after the 3 days. So the bailiff had to hire a team of movers to physically remove all of their belongings - all at our cost! Total cost for the bailiff was about $1100. 

Once the bailiff had insured that everything was gone, I was then left with a destroyed property.

All of the walls in the house were ruined. The place was initially covered in wallpaper, but with so many kids living in the house (it turned out that there were actually two combined families living there - so 10 kids, not 4) and all of the wallpaper was ripped and/or colored on with markers. There were numerous holes kicked and punched in the walls. Several of the doors were ripped off the hinges and very damaged, some beyond repair. The house had wall to wall carpet on two floors, it was all ruined with dirt, stains and burns. The basement was finished cheaply with vinyl floor and the walls weren't drywall. It was all ruined, the flooring was damaged, the walls were all buckling and had holes in them. 

It cost us thousands of dollars to fix up the property to sell it. Money that we were told by the Regie that we would not likely get back as the tenant was on welfare.

Which leads me to yet another reason not be a landlord in this province, at least if you are English. When you phone the Regie du logement you will never get to speak to someone who's mother tongue is English. They will speak English to you, but their level of comprehension is negligible. Therefore, you don't feel like you are getting accurate information. Many of the documents on their website are only available in French. When you receive the court verdict, the whole thing is in French. I don't even think you can obtain an English version, so have to rely on google translate. I had phoned them several times asking the same questions and I received different answers each time! They didn't understand what I was asking them! I actually got one of my friends to call them, as she is fully bilingual. I gave her a list of questions I wanted answers to. Well, the answers she got were once again different from all the answers I'd been given.

At the end of this experience, I've learned that you have to be well informed before becoming a landlord in Quebec. You need a lawyer, because the internet is filled with websites written in Frenglish legalese. There isn't anyone you can call for free accurate legal information. The Regie are not especially helpful unless you speak French. We phoned tenant hotlines but they were more knowledgeable about tenant rights. We phoned the Canadian housing and mortgage association because they have information on landlord and tenant rights. But they were useful only to a certain point.

Next, I would never rent to anyone unless they LOOK AMAZING ON PAPER. In other words, DO NOT be fooled by nice appearances or great personalities. Scam artists know how to say all the right things and put on a great show. What matters is what is on paper. Have an application form ready for them to fill out and read it carefully. Phone the references and have a list of questions ready to ask them. If they are their previous employers ask them specific questions like how long they worked there, when they started, when they left, why did they leave, were they punctual, did they get along with people, were they competent at their jobs. If it's a previous landlord, ask them how long the tenant lived there, when did they move in, when did they leave (by asking for dates you are getting specific and it will be easier to detect a liar) did they keep the house clean, did they pay their rent on time each month, were they noisy, were there any problems at all? Then do a credit check, and check for a criminal record. Although legally you can't refuse someone based on their record you can tell them you have found someone else if you don't want to rent to them.

I believe that people deserve chances too, but when you are trying to run a business (and that is what being a landlord is) you have to be logical and stick to the facts. You can't allow your emotions or feelings about the person influence your decision.

Until Quebec changes the laws to be more pro landlord though, it is just not worth the hassle. First off, landlords should have the right to demand a $2000 damage deposit before the tenant is allowed to move in. They should also be allowed to refuse people to have pets, and that if they get pets you can evict them. Same as smokers. Why is it that if you want to stay in a hotel for one night you aren't allowed to smoke unless it's a smokers room? Landlords should have the right to evict a tenant if the house and lease contract are not being respected. It should be a straight forward case that goes to court and results in eviction quickly. In other countries if you want to sell your property and need the tenants out so you can fix the place up, you simply write a letter and give them three months notice. I know, because it happened to me twice! Both times, I simply had to pack my things and leave. There was no choice, I couldn't go to court. But I understood, the owner needed his house back! That's life!

If a tenant is a pig, and you see cockroaches and you know they are ruining your house, you should be allowed to evict them! If a tenant can't pay the rent you should be allowed to contact a debt collector who will seize their personal belongings and retrieve the money for you. Most landlords are not going to want to spend years of their lives and thousands of dollars in court and bailiff fees to try and get a few thousands bucks in damages and unpaid rent. Tenants know this, and thrive on being able to get away with so much.

If you walk into a store, you can't trash the place or you will get arrested. Yet, it's ok to trash a house you rent. It doesn't matter, landlords are rich, who gives a crap about them? If you go to a restaurant, you have to pay for your meal. Or if you stay at a hotel, you have to pay for your room. Otherwise you could be arrested! Yet in Quebec, tenants can stay for at least a month in a place without going to court, and even when they are evicted (a process which takes at least 3 months) they can continue to live there rent free for at least 30 days, plus the extra week and a half it takes for the bailiff to act.

All I can say, is that unless the laws change eventually there won't be anywhere for people to rent anymore.

Quebec is known to have some of the most pro tenant laws in the world, so think carefully before deciding to become a landlord here!