jpandrsn;From the Residential Tenancies Act:"Obligations and rights of new landlord 47(1) A person who acquires the interest of a landlord in residential premises has the rights and is subject to the obligations of the previous landlord with respect to a security deposit paid to the previous landlord in respect of the residential premises. (2) A person who acquires the interest of a landlord in residential premises shall, within a reasonable time after acquiring the interest and without cost to the tenant, serve on the tenant
(a) a notice of landlord that meets the requirements of section 18, and
(b) a statement setting out the amount of the security deposit and interest, calculated in accordance with the regulations, standing to the tenant`s credit as of the date the person acquired the interest in the residential premises.
Notice of landlord
18(1) In this section, "notice of landlord" means a written notice that is dated and signed by the landlord and sets out the name of one of the persons who falls within the definition of landlord and a postal address and physical location in Alberta for that person.
(2) When a tenant enters into a residential tenancy agreement with a landlord, the landlord shall serve the tenant with a notice of landlord within 7 days after the day on which the tenant takes possession of the residential premises.
(3) A landlord of residential premises that are contained in a building or complex with common areas may, instead of complying with subsection (2), post the notice of landlord in a conspicuous place in a common area.
(4) If the information in the notice of landlord changes, the landlord shall forthwith serve the tenant with a new notice with the current information or, if the landlord has posted the notice under subsection (3), forthwith post a new notice with the current information.
(5) The landlord who posts a notice of landlord under this section shall take all reasonable steps to ensure that it remains posted."
Well, you may want to phone, but I would interpret the above to mean that you are bound by the terms and conditions of the previous Landlord. Actually, I would phone the RTDRS or similar to get a clarification. But right now, I am not optimistic.
Probably the best approach is to just work with your new tenants as best you can. Explain to them that the previous Landlord was assuming a rather large and avoidable risk by not collecting a security deposit (how dumb is that!!??), and that you are bound by your company`s (if you are operating one) policy / investment philosophy that a security deposit must be collected from every tenant. Would they be willing to at least put up (a) one months rent, (b) half of one months` rent  any suitable compromise.
You may advise them that you need to be compensated for risks you are undertaking and that the risk may be reflected in the next rental rate increase as a premium. I don`t mean to intend that as direct threat to your tenants, but try to provide all the very reasonable, rational, frim and clear reasons that 99% (hopefully!! I made the stat up!!) Landlords collect Security Deposits. There is a reason that the R.T.Act specifically mentions them, regulates them, and most of all, allows them.
If, in the end, the tenants refuse to provide a security deposit, and the advice you`ve received from the RTDRS or Landlord-Tenant Board clarifies that you can`t make them pay a security deposit after the fact, then that`s that - you`re stuck, and you will have to receive additional premium through a rent increase. That might make them angry and be more likely to damage to your unit.If you are really stuck, how about offering them a rebate program off their rent to help "fund" the Security Deposit? Let`s say for arguments sake, their rent is $1200. You might say to them: "I`m am going to raise your rent by $200 to $1400. This is to help fund my Security Deposit and other costs (justify the increase here), to mitigate my risk, BUT I am willing to offer this deal to you: I`ll allow $100 rebate for every month you (1) pay your rent on time (2) and take care of my place."
By the time a year goes by, you`ll have collected an additional $1200 - the max. amount of the security deposit, and you have offered to "cut" the rent increase by half (net $100 instead of $1300). If you do this, make sure that they make the post dated cheques for $1400, you actually collect and deposit $1400, and then every 3 months you cut them a rebate of $300 (3 months x $100 rebate) as long as they hold up their end of the bargain.
I use the rental rebate program all the time, it works very well. You can make your tenant feel like they`re getting a deal, and you`re getting some additional cash. Use whatever numbers you like, if you feel your justified in asking for more.
Bottom line is that, no matter what happens, make sure you get (1) the move-in report - if it exists that is - from the previous Landlord (2) Do a new move-in report, updated with all the wear and tear you and your tenants note - you`ve got to know exactly what condition this place was in when you assumed owenrship, especially if theres no security deposit and move in report and finally (3) get pictures of the place, and all the damages on the day you have ownership.
That way, even without a damage deposit, if you know for certain - with proof/evidence - of the units condition when you assumed ownership, you could claim damage/vandalism if the tenants do severe damage (worst case scenario).
And yes, the condo board can require you to pay a damage deposit for have a renter in your unit.
Mike "Smitty" Smith
