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Rental tenants have become an increasingly visible demographic in condo corporations over the past two or three years. More and more investors find that buying condo units for the purpose of generating rental income is attractive.
What does this mean for condo owners who live in their units, and for property managers? A lot. It turns out that because of the communal nature of condominiums, resident owners and property managers can end up “taking care” of tenants for investors in a lot of little ways.
This article will take a look at why rental condominiums are booming, what the impact is on owners and property managers, and suggest some best-practices for handling rental units within a condominium corporation.
First up is the overflow of tenant issues. From simple day to day issues such as a fridge not working, to major issues such as a constant disregard for the rules and regulations of the condominium corporation, a lot of tenant issues that are the sole responsibility of the unit owner as landlord can end up on the plate of the condominium corporation or the management & site staff.
What about overcrowding? Many condominiums find themselves trying to deal with multiple tenants in the same unit, ie. the renting out of rooms within one unit. This makes enforcing the “single family dwelling” clause that is in most declarations challenging, and deciding what is and is not “overcrowding”. With the ever increasing multiculturalism in Toronto today, courts are hesitant to enforce overcrowding in certain circumstances. Of course this all affects the cost of operating a building; the more people in a unit the higher the cost of operating.
Next up is problem tenants. This can be a big one. While there are many tenants that are better building occupiers than owners themselves, the few that cause issues unfortunately can create havoc. One of the worst experiences we have dealt with as a management company involved a drug dealer tenant who also preyed on other vulnerable residents (tenants and owners). They caused fights in the common areas, a constant need for police at the building, inordinate amount of common element damages, noise disturbances, filth in stairwells, and the list goes on. Of course this person was not paying rent either, so the owner was constantly bugging the management office for all kinds of assistance in dealing with eviction and the red tape and bureaucracy that comes with it.
I’m sure you can imagine that this all has a negative impact on property value, as well as on common element fees. Property values are impacted as the building becomes less attractive to potential purchasers. In some cases, this can develop a very negative reputation for the building, resulting in units not selling and thus prices being reduced. Common element fees are impacted as there is increased need for cleaning, checking security camera tapes, and management’s time being spent dealing with related problems. So, how are condominium corporations and property managers to deal with this ever more prevalent issue?
Mareka Properties has decades of experience in condominium property management. Here’s some best practices for handling rental units in condominium communities: