4 Tips For Saving Money When Evicting Tenants

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Evicting tenants is a huge hassle and it’s expensive.

Costs can include damage caused by tenants, tribunal costs for the actual eviction, and the costs for making the apartment ‘rent ready’.

Clearly, one bad tenant eviction can put a serious dent in your cash flow.

So how do you evict tenants in a cost-effective manner?

I’ll explain a few tips in this article, but keep in mind that I learned these lessons managing property in Ontario.

While the general principles should be the same in every province, specific provincial tenancy laws will be different, so always check your local laws before taking any action to evict someone.

 

File your Tribunal notices on time

The most important thing to remember with tenants is that…

You have to set the rules up front
and enforce them,
or they will walk all over you.

Even with rules in place, tenants will constantly test you to see if they can get away with breaking the rules.

One of the best things to do is to enforce timely payment of rent. If the tenant doesn’t pay by the third day of the month, give them a notice for non-payment of rent.

Remember: You must do this consistently!

Not only will it set the expectation that you “don’t play games”, but it’s also very important if you ever take the tenant to the Tribunal

I have personally seen a judge rule in favour of a tenant who didn’t even show up for the hearing, and who consistently paid late for 15 months, all because the landlord didn’t give them an non-payment notice each and every time they paid late!

The judge said the tenant “didn’t know” they were supposed to pay consistently on the 1st of the month.

 

Convince the tenant to leave

Negotiation Concept.If a tenant is consistently paying rent late or they are behind in their rent, first try negotiating with them to leave.

You can tell them it isn’t working out, and that it’s obvious the apartment is too much for them to afford.

Offer to break any lease you have with them if they will leave the apartment cleaned up with their belongings removed. If they agree, have them put it in writing that they are voluntarily leaving.

If they don’t agree, don’t get upset… stay calm and remind them that you both have to work together on a regular basis. If they aren’t happy with where they are or having to deal with you for late rent all the time, it’s best they just move on.

This is exactly the approach I once used with a tenant who I really wanted to get rid of. The situation was ugly, with many thousands of dollars at stake, and the tenant had brought in a friend who new the tenancy laws to negotiate with me.

If I went to the Tribunal, I knew it would have taken 2-3 months to sort out, plus many thousands more in lost rent. The entire time, both of us would have been miserable.

In the end, I was able to get the tenant to leave willingly in only 2 weeks!

No Tribunal.

No legal costs.

No sheriff removing the tenant.

It was a win-win situation for everyone.

 

Pay them to leave

If the tenant isn’t paying rent, consistently paying rent late in the month, or damaging your property, consider paying them money to break the lease and leave as soon as possible.

Why on earth would you do something like that?

Anyone who has ever evicted tenants can tell you it’s a very expensive process.  Costs can include:

  • Application fees for the tribunal
  • Delays while the tribunal gives you a court date (each day you’re missing out collecting rent, and you still need to pay your property bills)
  • Time required to fill out the forms and attend the hearing (factor in time off work or away from your business for the hearing)
  • Costs for legal representation (if you don’t represent yourself)
  • Delays while the judge makes their decision (more lost rent – see below **)
  • Extra damage done while waiting for the tribunal or eviction date. Some tenants will try to “get back at you” for evicting them (this alone can costs you hundreds or thousands)
  • Cleaning, painting, and other costs to get the apartment “rent ready”

All these costs can quickly add up to many thousands of dollars. Don’t you think it’s worth it to pay the tenant $200 or more to leave as soon as possible, and leave the unit in a reasonably clean and undamaged condition?

Remember **

The judge doesn’t have to make a decision while you are present at the hearing.

One time I was evicting tenants and the judge took 3 weeks to make a decision, even though the tenant didn’t show to the hearing.

I had photographic proof of the damage done by the tenant and the city health department had shut down the unit and even testified at the hearing!

 

Hire legal representation

A yellow folder with the label Court DecisionsIf the tenant won’t leave even if you pay them, then you’ll have to take them to your province’s rental tribunal.

Do yourself a favour and don’t try to do it yourself… hire legal representation.

Although the tribunal laws may seem clear and straightforward, it’s quite easy to fill in a form incorrectly, misinterpret the legal wording, or encounter a judge who’s having a bad day.

An individual who is familiar with the rules of the eviction process is in a much better position to get your bad tenant out quickly and cheaply.

Some law firms offer legal representation at the various provincial rental tribunals. These firms can easily charge many hundreds to thousands of dollars for complicated eviction cases.

A cheaper alternative is to look for “legal consultants” who handle evictions. Many times I’ve used consultants who were in the tribunal court rooms every day, who knew the judges on a first name basis, and had personally evicted hundreds of tenants.

They charged very reasonable fees, usually just a few hundred dollars. It was definitely worth every penny!

 

Remember: Most wealth in real estate is created by holding onto property over the long-term so that the tenants pay off your mortgage, and the property appreciates over time.

Do yourself a favour… while you’re waiting for that big pay-day, use the tips above to save yourself enormous amounts of time, money, and energy (not to mention headaches). It will make your landlording experience a much more positive one.

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Paul Blacquiere

Paul is an entrepreneur, investor, speaker, and educator.
He's experienced in multi-family properties, renovation, flips,
joint ventures, and is Canada's top RRSP mortgage expert.
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