I recently bought a small, vacant apartment building. Can my real estate salesperson help me find tenants?
Congratulations on your purchase. I trust that you have read and understand your obligations as a landlord under the Residential Tenancies Act, confirmed the property zoning accommodates rental and the building meets all the relevant fire and electrical safety codes and that the former owner obtained all the appropriate building permits.
The short answer is that you should discuss the idea of finding tenants with your salesperson to confirm if they arrange rentals in the first place. And if they do, how much experience do they have finding tenants for landlords, and how much will you have to pay in commissions and fees?
There are many advantages to working with a registered real estate salesperson or broker to help you find tenants, starting with the experience, contacts, knowledge of the local housing market they possess and the ethical standards they are required to uphold. They can also:
- Post the listing on Realtor.ca, if they are a Realtor, and work with other real estate representatives who might have clients looking for rental housing;
- Arrange appointments and show your building’s units to apartment hunters;
- Screen prospective tenant applications; and
- Review, and answer any questions you have regarding lease agreements.
Of course, you will have to come to an agreement on the fees you will pay the salesperson for finding your tenants. Be aware that your agreement could also include additional fees for services such as advertising and marketing, so ask your salesperson to walk you through it, line by line.
If you’re going to use a real estate brokerage to find potential tenants, understand that it is quite common for the listing representative to also find the prospective tenant. You should be aware that under the Real Estate and Business Brokers Act, 2002, a brokerage that represents both parties to a sale or rental transaction must inform the parties that the brokerage proposes to represent more than one party in the lease transaction, and how the brokerage’s obligations to each party might differ. Before any brokerage begins to represent both the landlord and the tenant, it must obtain the written consent of both.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.