Renting your Toronto condo or Mississauga condo can be dangerous to your financial health.

Sounds easy right?

Buy a condo in Toronto or Mississauga, rent, and let someone else pay the mortgage. The backbone of your future wealth.

However, there is a problem and it is the conflict between the current landlord and tenant legislation and the 1998 Condominium Act.

The Condominium Act of 1998 obliges a condominium corporation and its Board of Directors to maintain and enforce, if necessary, the declaration, bylaws, and rules of the Condominium Corporations.

Landlord-tenant law establishes the rights and obligations of both landlords and tenants. It also provides a remediation process through the Landlord Tenant Board.

So if you were to rent your Toronto condo or your Mississauga condo, who would own it?

a) The Condo Corp

b) The owner of the unit

If you said (b) the owner of the unit, you would be correct.

Neither the Condominium Corporation nor its management would be considered owners under landlord-tenant law.

Let’s see what possible problems.

The condo corporation may have in its declaration, statutes or rules that prohibit pets of a certain size or breed.

What happens if a tenant acquires a pet after moving into their Toronto or Mississauga condo?

And let’s say it’s of the variety that is prohibited by the condo corporation.

The condo corporation may request that you, as the owner, remove the offending pet and if you fail to do so, enforce its rights by court order if necessary.

But landlord-tenant law specifically states that tenants are allowed pets and cannot be forced to leave as a result of owning one.

Condominium corporations generally have provisions for quiet enjoyment in their declarations, statutes, or rules.

A tenant may have a dog that barks persistently and thus generates complaints from other unit owners.

The condo corporation is required to enforce your rights under the silent enjoyment provisions and may obtain a court order requiring you, as the unit owner, to remove the barking dog.

Landlord-Tenant legislation also has provisions on silent enjoyment, however a request to the Landlord-Tenant Board can often take time and tenants have been known to prolong or delay proceedings.

If the condo corporation decides it can’t wait and goes ahead with a court order request, you will be the one to pay the legal costs of that action.

If you don’t pay these costs, the condo corporation can attach a link to your unit until those costs have been covered.

Perhaps you rent to a tent that decides that one day you don’t want to pay more rent. You, as the unit owner, depend on timely rental payments to cover not only your mortgage costs, but also your monthly condo maintenance fees.

The condo corporation will expect you to pay monthly maintenance fees, whether you are collecting rent from your tenant or not.

The financial institution that holds your mortgage will also expect you to maintain regular payments.

If you do not pay your monthly maintenance fees, the condo corporation can and will likely obtain a lien on your unit and could possibly be in a position to sell your unit to satisfy its financial obligations to the condo corporation.

An application to the Landlord-Tenant Board can take time, and often does.

It is not uncommon for a tenant who knows the system to have an eviction order postponed and the hearing process reopened.

This can be time consuming. You may be running out of time on your obligations to the condo corporation.

A condo corporation may require annual inspections of smoke and carbon monoxide detectors under a provision in its declaration, statutes, or rules. Of course, they will most likely notify all residents by posting a notice in all public places around the building of when an inspection would take place.

The particularly troublesome tenant, upon coming home to find evidence of such an inspection, could file a complaint with the Landlord-Tenant Board that you, as the landlord, did not give them the required 24-hour notice of this inspection.

Remember, you are the owner, not the condo corporation.

This situation and others like it could be handled in advance with a clause in the tenants’ lease that requires them to abide by and comply with the provisions of the declaration, bylaws, or rules of condominium corporations.

It would be wise when renting your Toronto condo or Mississauga condo to do a thorough background check on potential renters.

In addition to a credit check, be sure to contact not only current owners but previous owners as well for references. You can get an enthusiastic referral from an existing homeowner who simply wants to get rid of them.

Feel free to turn a prospective tenant down if you are unhappy with your rental request. You can save thousands of dollars down the road and considerable headaches.

It is not my intention here to scare you into buying a Toronto condo or a Mississauga condo for rental purposes, but to inform you of the conflicts between the Condominium Law and the landlord-tenant law.

You may decide that your path to wealth creation lies in a Toronto freehold home for sale or a Mississauga townhome.

Leave a Reply

Your email address will not be published. Required fields are marked *