Twenty-Four

What do you think I’m going to write about today:

1) The action-packed TV show with Kiefer Sutherland.
2) The crummy Toronto newspaper that everybody reads on the subway.
3) The number of hours notice you must give your tenant in order to enter the property.

Yeah, it’s #3.  So sorry to all the fans of Donald Sutherland’s talented son, however, watch Flatliners if you get a chance!

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I think most people would agree that it’s only fair to expect, as a tenant, that your landlord will give you sufficient notice when he’s coming by your residence, aka his property.

If the landlord owns the property, he might argue that since he pays the taxes and he’s on legal title, that he should be able to drop by at a moment’s notice to inspect every inch of the house, condo, or building.  But surely we all have some common decency, right?  Surely we all aspire to have some privacy in our lives?

In most cases, twenty-four hours notice is required to enter any property that is tenanted.  And I say “in most cases” because not everybody plays by the rules, and not all tenants are aware of their rights.

When I draft an Agreement To Lease on behalf of a prospective tenant of mine, I always include the following clause:

The Lessee agrees to allow the Lessor or his agent to show the property at all reasonable hours to prospective Purchasers or Tenants, after giving the Lessee at least twenty-four (24) hours notice of such showing, and to allow the Lessor to affix a For Sale or For Rent sign on the property.

The truth is, there are many crummy landlords in the city who abuse the rules and often make their own.  I’m sure many landlords in the city would have no problem entering their property without notice at 9:00AM on Christmas morning.

But since most properties for rent in this city are usually perpetually rented properties, you have to assume that if you’re viewing this property as a prospective renter and trekking through somebody else’s abode, the same will be done to you when your lease is up next year.

I recently encountered a situation with a seller-client of mine in which I had to seriously assess this 24-hours-notice business; not the merits of the clause itself, but rather how to work around it when selling.

My client currently owns a condominium in downtown Toronto which he has tenanted the past three years.  He has decided to sell it in November when the lease is up, and thus he gave his client the required sixty days notice on September 1st.

So his selling options are as follows:
1) List the property for sale after the tenant has vacated in November and the unit is empty.
2) List the property for sale during the course of the lease, either in September or October.

First, consider that if he sells NOW, he can close the deal on November 1st and not miss a single month’s rent ($1550).  If he waits until November to list, the unit will be vacant for two months, and he’ll be out $3100 in doing so.

So what are the benefits of waiting until the unit is vacant?  How can he make back more than the $3100 he would lose otherwise?

Well, it all comes down to the 24-hours-notice business.

Simply put, any restrictions on showings in this city make it harder to show and subsequently sell properties.  Recall my post from a few weeks ago here.

Many real estate agents in the city read those words “24 hours notice required to show property” on MLS, and don’t end up making the appointment!  If you’re a seller, you want as many appointments on your property as possible!  Any missed showing is potential for a missed buyer!

Many real estate agents don’t plan ahead, and if you’re making appointments at 11AM for your showings at 5:00PM the same day, you can’t show any properties that are tenanted since you don’t have the required notice.  And what’s more frustrating is that many brokerages stick to that “24-hours” like glue.

When I call to make an appointment at 1:00PM on a Friday for 11:30AM on a Saturday, and the receptionist tells me that “24 hours notice is required,” I usually handle it one of two ways:

The nice way:
1) “Really eh?  I know it’s only 22.5 hours notice, but can you please just go ahead and try to make that appointment for me?  I’d really appreciate it!

The way that gets results:
2) “Okay, that’s fine.  Then can you do me a favor?  Can you please page the listing agent and tell him that the receptionist as his brokerage who makes $10/hour is making executive decisions with respect to showings and potential buyers for his property and he just lost a potential sale?”

What can I say?  The squeaky wheel gets the grease…

But back to my scenario above, if you’re a seller you have to consider that listing your property on the open market while a tenant is still living there exposes you to many pitfalls.  The tenant might be messy and leave the property in a state of disrepair, or he might call the brokerage and cancel showings just because “he feels like it.”

Some properties are incredibly tough to show, even with 48 hours notice or more!  What if the tenant is mad that you’re selling the property and kicking him out on the street?  He might decide to fight back by limiting showings and saying he never got the message, or there wasn’t sufficient notice.

I have yet to encounter a situation where a tenant is just so damn grateful to be allowed to rent from the landlord that he cleans the property every morning before showings, and makes himself scarce at night or on weekends when most showings take place.  In a perfect world, perhaps…

But this 24-hours-notice business is what really limits showings and thus prospective buyers for the property.

I ultimately told my client that it was up to him to decide when to list the property, adding of course that if he can go into the unit on November 1st to give it a solid cleaning, a few coats of paint, and add a few pieces of nice furniture to stage the property and make it look it’s best, then perhaps he should wait until the tenant is gone.

He may lose $3100 of rent in the process, but the property will look better, and those words “24-hours-notice required to show property” that appear on the MLS listing will now read “Show NOW!  Vacant!”

I’m not complaining about the fact that tenants are afforded certain rights.  In fact, I think the 24-hours-notice is quite important.

I just think that if everybody had a little foresight once in a while, the problems surrounding this issue would either be minimized, or would disappear altogether…

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  1. Krupo says:

    All-or-nothing, eh?

    Any thought given to the “discounted half month” rent approach?

    Offer the renter a half month at less than half rent to make up for their trouble, giving you a solid 15 days to sell untenanted for the latter half of the month?

    The idea is perhaps absolutely useless if the renter will have trouble finding a new home for the second half-month, and maybe you’d rather have the full month to sell instead of 15 days, still it’s a thought.

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