Downtown Suites News » Regulations

Condo Contract Rescinded

DTSuites — Sat, 06 Jun 2009 15:44:32 +0000

In the news:

A Richmond man who bought a new $3.5-million condominium at the University of B.C. can rescind the purchase contract because he was not fully informed about changes to the development, a judge has ruled. (Read more)

More than Just Collecting the Rent

Nicholas Meyer — Mon, 24 Nov 2008 20:10:58 +0000

Tenant screening is the first step in good property management. We thought this recent article was worth repeating.

It seems a building water leak caused a contactor to need to get into several strata lots to mop up the leak. When he went to one unit, the door wasn’t answered, so a locksmith was called. When the contractor stepped inside, he found that the unit had been converted to a fully equipped meth lab!

Police and fire departments arrived, the building had to be evacuated, the HAZMAT team dismantled the lab, and the city advised that the entire strata lot had to be deconstructed and rebuilt. The lot could no longer be occupied, and the owner would be facing a cost est. of $100,000 for a rebuild. Not to mention fines from the strata corporation and other legal consequences. The non-resident owner was shocked. He knew little about his tenant, other than that he paid cash for rent and security deposit.

This cautionary tale reinforces the reality that non-resident owners need to do more than simply collect monthly rent.

At Downtown Suites we handle all aspects of non-resident rental and keep informed on all regulations and updates. For example, there was a very significant court case (Supreme Court of BC) involving insurance claims, which was summarized as follows; “If an occupant of a strata lot is responsible for the cause of an incident and the insurance of the strata corporation has a deductible, the owner is responsible for paying the deductible.” This would mean the non-resident owner, if the tenant is responsible.

Our services involve the screening of tenants, including background credit checks, and we have many balances in place to ensure the good maintenance of your investment.

www.downtownsuites.com

Everything in Writing, Always

Nicholas Meyer — Thu, 13 Nov 2008 00:08:09 +0000

We are constantly reminded by the BC Real Estate Association and the courts that

in a real estate deal in BC the written document must accurately record the entire agreement. The failure to accurately and completely record the deal may leave a party unable to prove that there is a contract. Every important feature must also be certain, including financing arrangements.

Failure to do so will result in either party having reason to sue for breach of contract if they wish to wriggle out of it. Too often I encounter individuals and realtors who either write up vague financing clauses or try to negotiate verbally.

My over 30 years experience has taught me to detail everything on the contract of purchase and sale; and all offers of either price or terms must be in writing.

These comments were sparked by the most recent issue of “Legally Speaking” discussing the recent BC Supreme Court decision in Bryjen Holdings Co. v. Pug Investments Ltd. (2008 BCSC 1152, [2008] B.C.J. No. 1615)

Vancouver Attracts Overseas Investors Prior to 2010 Olympics

DTSuites — Fri, 03 Oct 2008 23:52:33 +0000

The overseas investor finds Vancouver to be particularly attractive to purchase an investment property for many reasons. Vancouver is hosting the 2010 Winter Olympics which will bring many visitors to our lovely city as well many foreigners think about the possibility of owning property here. No one has a crystal ball to predict property prices in Vancouver but we know that after Expo 86 we had a huge influx of overseas investors which drove up prices. We getting many inquires every week in regards to the 2010 Olympics from the overseas investors. Many investors are seriously thinking about owning property in Vancouver prior to 2010. This is an excellent idea, as it will enable you to own property in one of the most beautiful and desirable cities to live in the world.

At Downtown Suites we can manage your property for you prior while you reside overseas and if you visit during the Olympics you can choose to take possession of your suite. Many individuals are thinking about retirment in Vancouver within the next 10 years or so. It is an idea that many worldly individuals dream about and it is a great idea for many reasons. Our economy is very strong and the price points in Vancouver are still considered reasonable compared to other world-class cities.

For those who have never visited our city, Vancouver is located along the West Coast of British Columbia and many of our downtown neighbourhoods are surrounded by water located along the seawall. As well we have beautiful breathtaking mountain views from many of the downtown locations. We have so many attractive neighbourhoods which are desirable including; Downtown, Westend, Yaletown, Kitsilano, and West Side.

At Downtown Suites we can assist you in all aspects of purchasing the perfect investment property. We will help you to narrow down your search parameters including price point, square footage, location, amenities, view and other factors that may be important to you. In fact we can assist you with the sales transaction remotely. If you are a qualified purchaser we assist with all of the documentation and paper work by email and fax.

Once we have found the perfect property for you we will make the purchase as simple as possible for you from beginning to end. We take a personal interest in our clients and will look out for your interests from negotiating the right price point for you, presenting the offer, and ultimatley closing the deal. We have a team of professionals with whom we work closely including Mortgage Specialists, Lawyers, Notaries, and Home Inspectors.

We are a fully licensed Property Management and Real Estate company that will professionally manage your property for you in all aspects including: advertising and finding a qualified tenant, collecting rents, managing tenants, maintenance issues which may arise. Please refer to our website for additional information on our Property Management and Real Estate Services www. downtownsuites.com.

I am a members of the Vancouver Real Estate Board of Greater Vancouver and Specialize in the Downtown Vancouver Real Estate Market. Specializing in working with overseas investors and tenant occupied properties. If you have any questions in regards to the acquisition or sale of an investment property in the Vancouver area or have any questions please do not hesistate to contact me directly.

Victoria Farrell

Sales Associate

Downtown Suites Ltd
www.downtownsuites.com
victoria@downtownsuties.com

Lease Advice For Landlords

Nicholas Meyer — Wed, 22 Aug 2007 21:53:36 +0000

Should landlords have a closed one year lease, with no month to month extensions allowed or use the standard 1 year lease and continue on month to month?
The standard form agreement is for the lease to be one year and then go month to month. If the tenancy is to be for one year only, the tenant has to initial agreement to this. Very few people will want to take a large or expensive suite and not have the security of knowing that they can continue on indefinitely, so we do find it is harder to rent without such an option.

On the other hand, with a one year lease, the tenancy officially ends at end of term. Tenants are not obliged to actually give notice, they may not cooperate with releasing, and usually are not responsive on whether they are staying on etc. We have had situations where they move out and then we have an empty month to then try and get the suite re-rented.
The advantages of the approach we use at Downtown Suites are as follows:

1. The rent can be renegotiated should the market warrant it. The owner can possibly avoid the legislated maximum increase allowed by the provincial government (this year currently 4%) on ongoing agreements.

2. In the event of a sale or the owner wishing to move into their own property, the tenant does not have to be asked to leave, under current legislation the landlord is required to pay one months rent for asking the tenant to move out.

Rents have increased quite significantly over the past year, quality tenants are becoming scarcer and the reality is properties are becoming much less affordable for the tenant rental pool (whose wages haven’t increased in the same ratio). There are also hundreds more rental suites coming on each month even though demand is still quite strong.
For more info, here is a link to the Residential Tenancy web site which governs these transactions.

Downtown Suites, Ltd.

(originally posted June 16, 2007)

Our Fees and Services

Nicholas Meyer — Wed, 22 Aug 2007 21:50:18 +0000

We recently did this videoblog outlining our fees and services for Property Management at Downtown Suites.

Here it is, in three parts.

Our Fees and Services Part 1: Introduction to Downtown Suites
Our Fees and Services Part 2: Details on Our Services
Our Fees and Services Part 3: Downtown Suites Overview(originally posted June 7, 2007)
Note: these fees are now updated, call for more info.

A Trust Account is Vital

Nicholas Meyer — Wed, 22 Aug 2007 21:46:06 +0000

In this videoblog, Nicholas Meyer shares a warning about what happens when an investor doesn’t have a licensed property manager with a trust account. He discusses investors’ needs for a trust account and how as a licensed property management company, Downtown Suites assures investors that their income is safe.
(originally posted May 31, 2007)

What Landlords Should Know

Nicholas Meyer — Wed, 22 Aug 2007 21:34:34 +0000

What happens if you own a property and you decide to sell it? What happens with the tenant? There are very defined rights and responsibilities for both parties, under the Residential Tenancy Act which is the governing act for all rental transactions in the province of British Columbia.
At Downtown Suites, we always rent our properties on a one year lease. The reason we take a one year lease is so we get some longevity with the tenant client, but after that we always go on a month to month basis. That gives flexibility to the owner, should they want to sell their property they then are able to do it. We’ve had a couple of instances where owners have asked us to get another lease from the tenant, and we have done that, and they decide the market is very strong, they want to sell it. The rental lease takes precedence over any sale. It is important to remember that.
It is almost impossible to sell a property with a long lease, even ten months left still on it, they wouldn’t be able to move in for 11 months. The other option is that sometimes you can buy the tenant out, but it’s not a very easy thing to do and of course you are very much in the tenant’s pocket then – they are writing the rules.
Once we have the flexibility of a month to month lease, the requirement is that should the property be sold, and the new owner wants to move in to it, (or should the existing owner wish to move back into his own property as well,) they have to give 60 days notice to the tenant that they want to move in, before the end of the rental period. The means of delivery of this notice is very regulated as well. If the notice is just posted on the door, I believe it’s three or four days notice is used up just by putting it on the door, so we have to be very careful about that.
So essentially, 60 days notice at the end of the month. The tenant then has the right to give 10 days notice to move out on any time within that period, and rent that has been paid for the time they are not going to be there is pro-rated and refunded to them.
So this can be quite complicated if you are expecting that rental stream and you won’t get it for two months if they decide to move out within 10 days of being served the notice. You would be without any rent for 50 days, so it’s something to bear in mind.
The other thing is they are required to receive one month’s rent for the inconvenience of having to move. Now a lot of owners balk at that, but the law is One Month’s Rent. I just had a situation with a gentleman from overseas, who didn’t want to pay this. A lot of overseas owners find this absurd in their mind and they want to get their own property back. The gentleman who was the tenant went to the arbitration court and, of course, he won. So be very careful. You are obliged to pay one month’s rent, plus once you serve the 60 days notice they can then give you 10 days notice and move out any time they want. And then the remaining rent is pro-rated and refunded to them.
I’ve had personal experience of this. I bought a house not so long ago and I had to pay out $6,000 in rents to tenants just so I could get the house back for myself. So it is quite painful. However looking at it from the other side, I can fully appreciate how tenants would feel if they’ve enjoyed living in their home – it is their home after all – and they are being forced to move. Of course now a lot of people are being forced to move so people can realize capital gains. We are not into the social issues here, but I’m just saying I’m sympathetic with both sides. But what really counts is the law, and what we have to administer.

(Video version posted below.)

Downtown Suites, Ltd.

(originally posted April 20, 2007)

Selling Tenanted Property

Nicholas Meyer — Wed, 22 Aug 2007 21:34:21 +0000

In this short video, I explain to landlords some of the ins and outs involved in selling property when it is rented to a tenant.
(originally posted March 23, 2007)

Downtown Suites, Ltd.

Everything You Need to Know about Non-Resident Tax

Nicholas Meyer — Wed, 22 Aug 2007 21:33:37 +0000

In this video blog, I discuss the procedures and government requirements for non-resident tax on investment property.
Meet the Accounting and Admin people at the Downtown Suites office, as they have just finished the Non-Resident Tax information for the month.
About Non-Resident Tax

It’s quite a complicated procedure that the government requires: first of all a non-resident must have an ITN number which is very similar to a resident of Canada’s social insurance number. That became a requirement at the beginning of January 2006.

So the first step is actually applying for the ITN number, which we would help you do – we have the forms in the office. We’ll have you sign them and then we remit them for you. Once you’ve been given an ITN number, the next requirement is to go ahead and file the NR-6 form. For this we estimate what the revenue from the property will be throughout the year, and what the expenses would be – such as insurance costs, management fees, strata fees, taxes, maybe a vacancy allowance. We compute all of this and derive either a net positive income or a negative income. If there is a negative income, of course there is no tax to pay, but if it is into the positive, then you are required to pay 25% of the net income to the Canadian government.

So once we’ve arrived at the net income, we then submit that to Ottawa, the capital of Canada, and they either approve it or disapprove it. Most of the time they seem to approve it, and once the figures are approved, we are issued with a non-resident tax number for you.

When we have this non-resident tax number, we then remit to the government each month 25% of the net income. We charge a very small fee to do all of this work, which is $150 for the year. Physically we actually go to Revenue Canada on a monthly basis, to their head office here in Vancouver, at 1166 West Pender, and, as I say, we help with all the forms, and send out monthly forms to the government as well as forms to the owners.

On an annual basis, we’re required to file what is known as an NR-4. If you’re a Canadian, when you have your income you get a T-4. If you’re a non-resident, you get an NR-4. That’s a statement of your rental income, as you have to file income tax. It’s very important that this procedure be followed, because as your agents in Canada, we have a lot of responsibilities. One of them is that if you don’t pay your taxes, we are required to pay your taxes. However, we can help you to get this done, and we can point you to various accountants and professionals who can help you do that. It would be a conflict of interest for us to actually file your taxes for you.

Just on a warning note, I’ve had the revenue people in my office, for some clients who came to me after they had been dealing with some other management companies who hadn’t been quite as diligent as we are in ensuring that all the i’s are dotted and the t’s are crossed. This one unfortunate client had owned a property for five years, she had never been to Canada. She bought it in Singapore. She wasn’t from Singapore, but was from another Commonwealth country. She owned the property, her husband had left her, she had had a bad tenant, had a flood in the suite – the result was that she’d lost thousands and thousands of dollars. In addition, she hadn’t filed the NR-6 form with the government.

Consequently, the government agent’s position when he came into my office was that she’d owned the suite for 5, maybe 6 years, and therefore she owed 25% of the gross income. In this instance, that was in excess of $40,000. And when I said, “This woman has had so much hardship,” and I explained that her husband had left her, her tenants have been bad, she’s had assessments, the carpet had been ruined by the tenant, etc. He just looked at me and shook his head and said, “We don’t care about that. She didn’t file her form. She owes her taxes. She hasn’t paid taxes and hasn’t gone through proper procedures.” So it was out of our hands. I believe there was some negotiation, that I wasn’t privy to. But nevertheless, they do take a very hard stance on it, and if they do deem that you owe non-resident tax and you haven’t paid your taxes, they can be very strict. And as I said, they will then penalize you 25% of the gross. Whether they can actually charge you a penalty on top of that I’m not sure, but it’s definitely worth being very cautious about.

(Originally posted March 19, 2007)

Downtown Suites, Ltd.