Lease Length Advice

[BREAKRZ]

Hey guys, just wondering what length of lease terms are preferred out there (month-to-month or 1 year)?

I'm currently looking for tenants in my upper unit but plan on creating a basement apartment soon. Due to the circumstances I'm thinking a month to month term might be best just incase the upper tenants give me any problems. Any advice appreciated.

Thanks

 

[bradyloewen]

Remember that a fixed term doesn't need to be a year. It can be any length of time you decide and the new tenant agrees on.

 

[Matt Crowley]

With 99% of tenants there are adequate rules with the Residential Tenancy Act to evict them for substantial breaches. Most tenants will not want to live somewhere where the relationship is not working out either.

Some landlords recommend using a 3-month trial period fixed term lease then will sign a periodic lease after that. That is just predatory in my opinion. It is exactly the reason the housing industry gets targeted for ripping off tenants. Rip off enough tenants with predatory practices like this and we end up with the possible implications of Bill 202 (Alberta). Tenants invest their time and energy to move so if you don't have a good tenant, then wait for a better one!

The only time I use fixed term leases is when I want a tenant out by a certain date and describe it to them up front. (Renovation timing) This means I accept a lower rent but usually won't end up with a vacancy.

 

[Sherilynn]

Some landlords recommend using a 3-month trial period fixed term lease then will sign a periodic lease after that. That is just predatory in my opinion.

How could a 3-month trial period be predatory? The only way I can see it being predatory is if someone was illegally increasing the rent at the end of the trial period. If that's the case, that landlord should be fined.

We ONLY work with fixed term leases because we like the fact we can choose not to renew (very handy if you have a problem/high maintenance tenant who doesn't commit substantial breaches worthy of eviction), and we like that we can better schedule tenant turnover (to avoid winter moves in Edmonton).

And a trial lease protects both the landlord and tenants against mistakes and misjudgment.

We have had tenants take advantage of the trial lease when one misjudged the commute to work and another didn't realize basement suites could have spiders (and she had a phobia). And we once took advantage of the trial lease when we discovered an otherwise good tenant had the habit of screaming cuss words at her children and it bothered the sweet, young bible camp counselors who lived in the upper suite.

With a trial lease, there is no confrontation or eviction battle, and everyone parts on somewhat friendly terms.

 

[dpeacock]

We prefer the fixed term as well. My understanding is that in Ab, a month to month is much harder to terminate if the tenant is a poor fit for us or doesn't play well with others. We have up/down, and duplexes. The fixed term at least gives us the opportunity to end the lease without too much drama, if we choose. It's a lot of work to find what we consider a good tenant, so finding a new tenant in 3-6 mos is definitely NOT why we choose fixed term leases. It does give us some control however. Perhaps month to month works better in apartments, but we have no experience there.

 

[BREAKRZ]

In Ontario the 1 year lease once expired defaults to month to month and you cannot force the tenant to sign another lease. For security the tenant could resign a new term and lock in the length otherwise its month to month once the fixed term expires.

 

[Kjeck]

It depends on the market, where you rent out your property. For instance, in the market where rents continue to rise, it’s better to sign month-to month agreement. Short-term lease will allow you to keep your rental rates comparable to those of others in the area. However, it’ won’t be a good idea in a rental market with lower occupancy rates, since there is the potentially high turnover. And a property without a lease equals loss of rental income.

If you sing the lease for a year, you will eliminate the need to spend time and money finding a new tenant and preparing the property for move-in. But in this case you won’t being able to raise rent more than once in a year.

 

[REInvestors888]

IMO: 3-6 month lease is just right to test tenants and renew it at same lease rate if satisfied. Was thinking of this strategy for international students coming in soon. By the way, aside from copies of passport and visa and co-signor on the lease, what other requirements do you guys normally require from them?
Thanks for sharing.

 

[darkness05]

How could a 3-month trial period be predatory? The only way I can see it being predatory is if someone was illegally increasing the rent at the end of the trial period. If that's the case, that landlord should be fined.

We ONLY work with fixed term leases because we like the fact we can choose not to renew (very handy if you have a problem/high maintenance tenant who doesn't commit substantial breaches worthy of eviction), and we like that we can better schedule tenant turnover (to avoid winter moves in Edmonton).

And a trial lease protects both the landlord and tenants against mistakes and misjudgment.

We have had tenants take advantage of the trial lease when one misjudged the commute to work and another didn't realize basement suites could have spiders (and she had a phobia). And we once took advantage of the trial lease when we discovered an otherwise good tenant had the habit of screaming cuss words at her children and it bothered the sweet, young bible camp counselors who lived in the upper suite.

With a trial lease, there is no confrontation or eviction battle, and everyone parts on somewhat friendly terms.

I strongly agree with Sherilynn. We have been using the 3 month trial lease with great success. It saved both us and the tenant from a potentially nasty situation when the tenant didn't realized that there would be random noises (mild foot traffic/vacuuming) coming from the upper level until she moved in. She was not happy with this and wanted to leave once the 3 months was up. We were happy to have her leave as a pissed off tenant is never someone you want to have in your place.

All of our other units have been extended to 9 months (after the first 3) so that we can attempt to control tenant turnover and had our leases come due in the spring. Even in the super hot rental market of Kelowna, trying to rent a basement suite for Jan 1 is never easy.