Everyone plays an important role in a rental unit. It doesn’t matter whether you are a first-time renter, long-term tenant, building manager or landlord — everyone’s responsibilities should be clear. This will prevent misunderstandings and help landlords acquire and maintain good, happy tenants.
Landlord responsibilities are often outlined in the rental agreement. The agreement should be transparent to allow everyone involved in the process to thrive. Rental housing is a competitive market, and great landlords and tenants must collaborate to ensure a living situation works for everyone. With that said, it’s time to break down landlord responsibilities.
An overview of landlords
A landlord is a property owner who rents or leases a property to another person in exchange for rent payments. Landlords are either individuals or businesses, such as property management companies. Landlords are usually responsible for maintenance and repairs during the rental term. The tenant, also known as the leaseholder, has to keep the property clean and looking its best. However, responsibilities are delegated in the rental agreement.
The role of landlords
As we’ve discussed, a landlord owns the property and rents it out to another person, known as the tenant or leaseholder. The sole purpose is investing in a property to earn a profit. The main benefit of a property owner asking tenants to pay rent is to earn an income while their properties appreciate in value over time.
There are various types of property owners. These can include individuals, businesses, or sometimes, government agencies. In addition, multiple types of properties exist, and all of them can be used as rental units. That means single-family homes are not the only types of rental units on the market. These can include:
- Multi-family dwellings (e.g. multi-family homes, apartment buildings, and condominiums)
- Land and empty lots
- Vacation properties (e.g. cottages and villas)
- Commercial properties (e.g. standalone business properties, shopping malls, office buildings, etc.)
Property owners offering a rental unit use something called a lease agreement or a tenancy agreement. It’s a contract that consists of the terms of renting out the property. In basic terms, it ensures the tenant pays rent while living in the rental unit.
Understanding your role is essential as a new landlord. It will allow you to give your tenants a positive experience while they are living in your building. Additionally, it will allow you to fulfill all your responsibilities without worry.
What you might not know is that landlords fall into one of a few categories. Which one applies to you? In the next section, we will learn about the different types of landlords and how they operate.
Types of landlords
Anyone can own property, so there are various types of landlords and tenants. Regardless of who owns the rental property, the tenant must pay rent in exchange for living there. Let’s review the most common types of landlords:
Individuals
Some people own multiple properties to supplement their income and upgrade their investment portfolio. For example, a middle-aged couple might buy a second house to rent out to increase their annual income. It could also act as an additional stream of income when they retire.
Businesses
Property management companies often own multiple buildings. The business model is purchasing a property and renting it out for a profit. This isn’t restricted to residential complexes. In fact, many corporations rent out commercial properties to businesses.
Government agencies
In bigger cities, the municipal government may own certain housing corporations. The purpose is to own, rent, manage, and offer affordable or subsidized housing rentals for low-income residents. The rent payment amounts are usually based on the tenant’s income or the property value.
Some landlords are individuals looking for extra income, while others are businesses that use their properties as their primary source of revenue. In other situations, the government will purchase properties for the purpose of housing low-income families. As a landlord, you will likely find that you fit into one of the first two categories. With that said, you must fulfill certain responsibilities, which we will get into shortly.
Landlord responsibilities
The tenancy agreement also outlines the landlord’s rights and responsibilities. When renting out their spaces, property owners must fulfill certain requirements. These provide tenants with the basics they need to live and also offer a sense of privacy. Below, we will cover the responsibilities of a landlord:
Maintaining common areas
A landlord must maintain common areas such as driveways and lobbies at a rental property. The specifics are outlined in the lease agreement. What’s defined as a common area depends on the type of rental housing the tenant lives in.
Emergency repairs
The landlord, building manager or superintendent is responsible for emergency repairs. This includes repairs and maintenance of major appliances the rental unit came with. If a tenant is having issues, they can find out who to contact here.
Ensuring the property is inhabitable
The property should be inhabitable for potential tenants. There should not be issues with pests, and the building should not be in disrepair. A landlord has to ensure the rental property complies with health safety, house and maintenance standards.
Not intruding on a tenant’s space
When it comes to rental housing, landlords do not have the right to come and go as they please. In other words, they should not enter the premises outside of fulfilling their responsibilities as landlords.
Giving notice before entering the rental unit
The tenant agreement usually states the amount of notice that needs to be given before a landlord visits a property. Proper notice is an act of courtesy and a legal obligation. Yes, a property owner has the right to collect rent in a timely manner, but they cannot show up without giving at least 24 hours' notice.
Providing access to essential services
The property owners need to ensure tenants have access to essential services such as hot and cold water, electricity and heat. Utilities need to be in place before renting out a property or adding other tenants to the lease agreement.
For more information, check out the Alberta Provincial Tenancies Act and Ontario’s rental rights. You can also look into your local residential tenancies act online from any search engine.
Being a landlord isn’t something that should be taken lightly. There are several responsibilities required to acquire and maintain tenants. The tenancy agreement protects landlords and renters and comes with obligations for both parties. These minimum standards are in place for everyone’s peace of mind, but they don’t give landlords unrestricted power. Next we will explore the limitations of landlords.
What a landlord can’t do
A landlord has rights and responsibilities to fulfill. However, there are limitations on what they can and can’t do. Yes, they can collect rent from tenants, but that doesn’t make them above the law. Here are the restrictions that landlords and property owners have:
Discrimination
The Fair Housing Act, more commonly known as the National Housing Act in Canada, prevents property owners from denying a renter without just cause. A person cannot be denied based on race, colour, national origin, sexual orientation, familial status, disability, or gender.
Coming in without proper notice
Outside of an emergency situation like a fire leak, landlords have to give proper notice before visiting their rental property. The amount of notice that has to be given will vary depending on the tenancy agreement, but it’s generally at least 24 hours.
Unjustly evicting tenants
As a property owner, you are allowed to evict tenants. However, there has to be a legal reason to do so. Not following local laws can get landlords into legal trouble. That’s why it’s essential to have just cause before evicting someone.
Raising rent without notice
Before increasing a tenant’s rent, landlords must give a minimum of 90 days’ notice. However, this will vary depending on the province in which you live. Some rent control laws will limit how much a landlord can raise the rent even when it’s time to renew a lease agreement.
Certain rules must be followed between the application and when the tenant moves in. In other words, property owners cannot do whatever they want. Discrimination is illegal, and once tenants move in, they have their own set of rights and responsibilities that can’t be violated. On the other hand, landlords have their own set of rights, which we will review shortly.
Landlord rights
A landlord’s rights are usually outlined in the tenancy agreement. When a tenant is living on their property, a landlord is entitled to their own set of rights. During the rental period, the tenant agrees to certain terms. Let’s review the rights a property owner has when renting out a unit:
Collecting a rent deposit
Many landlords ask tenants to pay a rent deposit before moving in. A rent deposit is an amount equivalent to one rental period (e.g., one month or one week). This money will be used as the tenant’s last rent payment.
Receiving rent on time
Landlords must be paid rent in full on the day that it is due. After collecting rent, the landlord has to give the tenant(s) a copy of the receipt if requested. Post-dated cheques and automatic debits are not allowed.
Evict tenants who violate the rental agreement
A landlord has the right to evict a tenant for violating the terms of a lease. Tenancy agreements outline the responsibilities of the tenant. If the tenant goes against these terms, the landlord can legally give them a notice of eviction.
When a tenant moves into a rental unit, they have to understand that landlords have their own set of rights. You can learn more about this in our tenant insurance guide. Speaking of insurance, landlords can also purchase insurance policies to protect their properties. Next, we will learn about landlord insurance and how it can help landlords maintain their rental properties.
Landlord insurance
If you own a rental property, you should consider purchasing an insurance policy. What is landlord insurance? Well, it protects property owners from financial losses that can occur as a result of damages to their property or its contents. Additionally, it can help recuperate lost rental income if the property becomes uninhabitable during a rental term. A landlord insurance policy consists of multiple types of coverage, which you can learn more about below:
Liability coverage
General liability coverage will protect you against potential losses that can result from third-party property damage or bodily injury claims and lawsuits. For instance, if a tenant sues a landlord after they or a visitor slips and falls, this coverage can help. It will assist you by paying for legal expenses and potential settlements.
Property coverage
Life is unpredictable, and your property can get damaged in an instant. Property coverage can help pay for any damages to your property or its contents. This can include unforeseen circumstances such as fire , wind damage, water damage, theft or vandalism. Expect to be compensated for the following:
Rental income coverage
If your property is temporarily uninhabitable, insurance can help replace lost rent payments. However, there is a limit on how big of a claim you can make.
Contents
Some items aren’t permanently attached to your building. For example, if kitchen appliances are damaged, insurance can help pay to repair or replace them.
Equipment coverage
Repairing and replacing equipment can add up. Equipment insurance helps cover the costs associated with repairing and replacing equipment present in the rental unit. This can include kitchen appliances or the HVAC system if it breaks down due to a mechanical or electrical problem.
An up-to-date insurance policy is the best way for landlords to avoid the financial losses associated with property damage. Alongside complying with local building codes, landlords need to protect their investments. Like other types of insurance coverage, there are optional types of coverage available. We will learn more about these types of coverage next.
Additional types of landlord insurance coverage
The previously mentioned types of insurance coverage come with landlord insurance policies by default. However, they don’t account for every scenario. Depending on where your rental property is located, you may want to consider purchasing additional insurance coverage. Keep in mind that additional coverage can increase your premiums. Here are your other options:
Overland flood insurance
The majority of landlord insurance policies don’t include overland flood insurance. This type of coverage will provide compensation if a freshwater flood occurs because of inclement weather, a spring thaw or an overflowing body of water. It will help pay for any internal or external damage caused by the flood, including water that enters through the basement, roof, windows, and doors. Opt into this coverage if you own a waterfront property.
Sewer backup insurance
Sewer backup ending up inside your home is never good. It can cause moisture damage and a nasty stench. If a municipal sewer line floods your rental property by making its way through drains and septic tanks, you need to address the issue right away. Sewer backup insurance will help pay for the cleanup costs and can sometimes help with any items damaged by the backup of waste water.
Earthquake insurance
Most people won’t think of this type of insurance coverage first. In fact, many will overlook it unless they rent out a property in an area prone to earthquakes. If this is the case, having proper insurance coverage is essential. It will cover losses and damages to the property and its contents that occurred as a result of the earthquake.
Legal expense insurance
If a tenant refuses to or cannot pay rent, you will want to evict them. However, you have to go through an extensive legal process to do so. That’s where legal expense insurance can spring into action. Paying legal fees can cost a decent amount of money. However, having insurance coverage will reduce the costs of hiring a lawyer to fight for you in court.
Although landlords don’t have to purchase these types of insurance coverage, they can if they apply for it. Having a comprehensive insurance policy prevents costly damages from cutting into profits. It also ensures tenants get reasonable enjoyment out of their spaces without interruption. To better protect your property from damages, consider reviewing our home protection tips.
Ensure tenants pay rent with BrokerLink!
As a landlord, it’s your job to advocate for yourself and your tenants. Ask them if they have tenants and renters insurance to ensure their personal belongings are protected. Showing that you care about their well-being when living on your property increases the likelihood of lease renewal.
Additionally, you probably have a home of your own, which requires understanding home insurance vs. homeowners insurance as well as home insurance tax deductibles. If this is the case, you’ll need the right insurance policy and bundling your home and auto insurance can save you money in the long run. Choose from one of the following options:
- Condo insurance
- Tenant and renters insurance
- Vacation and cottage insurance
- High-value home insurance
If you have any questions about tenant or landlord insurance, contact your BrokerLink broker to learn more. Our insurance brokers can help set up and implement any additional coverage or make adjustments to your insurance to ensure that what you want covered is covered. Considering changing house insurance or looking for a reliable home insurance broker? Use our online quote tool for a free estimate today.
Get a tenant insurance quote [phone]
