Do you own a condo and plan on holding it as a rental? Renting out your condo may seem simple, but here are some MUSTS when it comes to planning on renting out your condo.
Many condo owners move to different types of homes as their life progresses. Even when they buy other houses, they want to keep their condos and have them as rentals. But doing that is not easy. There are a lot of processes that you need to follow if you want to do that.
Bylaws are the rules that govern the corporation. Underneath the bylaws are policies. There are certain areas where bylaws are vague, but policies are then built to address the issues.
In terms of an owner wanting to rent out their unit, the first thing is to figure out what kind of rental you want. Do you want a short-term rental like an Airbnb, or do you want long-term?
Though Airbnbs are popular now, some bylaws prohibit short-term rentals. Some require approval of the board to operate a business in the unit, such as Airbnb. So before you can operate, you need to get a license through the city of Calgary, but the board might not approve it. Figuring that out ahead of time can save you a lot of pain and help you set proper expectations.
Next is to set rules on what tenants can and can’t do in the unit. This is really important because condos are run by a corporation, unlike single-family homes where people can do as they please. Every apartment has rules that everyone must follow for all to live together in harmony.
Some rules include no smoking in common areas or no bicycles or personal items on the balconies. Another popular policy is the prohibition of using propane tanks. Some bylaws only allow electric or gas barbecues.
You must understand everything written within the bylaws. You also have to provide your tenants with a printed copy of the policies, so they have a good understanding of what is expected of them as a tenant.
Violation of Bylaws
If you have a tenant and they were reported violating a bylaw, they may face sanctions. For example, you have a tenant who has a pet, and they are not cleaning up after them. The first time they get caught, they might receive a written warning, and if it happens again for the second time, they might pay a fine of around $50.
The challenging part is that fines are usually charged to the owner, not to the tenant. This is why it is crucial to discuss this in your tenant agreement. You can state that the tenant will be liable to any fines if they violate any policies or bylaws of the board of management.
Rebecca had a client who bought a condo last month. The bylaws state that pets are allowed in the building, but a policy says no pets are permitted. In this case, the tenant must follow the policy. But the great thing, though, is that the board can overturn that policy because they’ve put it in.
Down the road, bylaws can be revised when they no longer seem relevant to the condo dwellers. A change in bylaws only needs board approval of 75% of owners, representing 7,500 of those 10,000 unit factors.
Who Do You Want Your Tenants Reaching Out To?
This might not necessarily fall into your condo bylaws, but you have to be proactive in setting this upfront. You have to identify who your tenant should be reaching out to if they have concerns. Do you want them to go to the board or the management company, or should they come to you for that?
Another great thing that you can do is to post a laminated directory of your trusted service providers that your tenant can reach out to when needed. The list could include a plumber, an electrician, or any contact that could be helpful for home maintenance.
Approvals From The Board
Some bylaws are very detailed. For example, bylaws say you can only have one dog and one cat, and it can’t be any more than ten pounds or exceed a certain height. So make sure you get approval for pets.
If you have visitors staying for more than 48 hours, you may need a parking pass for them. For any type of improvement, tenants certainly need to get board approval before doing any renovation.
Sometimes the bylaws will say that a member of the board doesn’t have to be an owner. So if you want your unit represented and you trust your tenant enough, they can sit on the board. It’s a great way to help shape your community and be in the know of what’s going on.