TOP ISSUES THAT CAN ARISE WHEN LEASING OUT YOUR COMMERCIAL PROPERTY IN MONTREAL

Updated: 4 days ago

Whether you’ve been a landlord in Montreal for much of your life or you’re preparing to rent out your very first property, protecting yourself with an iron-clad lease in the beginning has proven to be the best way of keeping the leasing process smooth.



With that being said, it is important to be aware that things don’t always go as smoothly as you may like, and going through the eviction process may be something you might have to address at some point during your career.


Regardless of whether you have been a good landlord who builds positive relationships with your tenants, in some cases, a relationship may sour.


Rather than immediately resolving yourself to issue an eviction notice, there are a number of proven strategies you may want to consider that may cause you less problems when dealing with a problematic commercial tenant.


TENANTS REFUSE TO PAY RENT

Tenants can withhold rent from landlords for a number of reasons, from cash flow

shortages, to repair and maintenance disputes. Communication becomes critical when

confronting these issues. It is best approach the situation by attempting to understand the tenant and the nature of the issue and try to negotiate, if possible.


SOLUTION 1: Structure Payment Options and Safeguard Orders.

If the tenant has cash flow problems, the most effective rent-collecting method is to

structure payment options. As a landlord, you should recognize that people occasionally

struggle with bills, so you can try implementing a policy of accepting a payment plan.

Another good way to collect is to prorate the late fees and interest and delinquent rent

over the remainder of the tenant’s lease.


Should that not work, landlords have a right to ask the courts to force the tenants to pay

on the first of every month and should they default, the landlord has much more of a

quicker and efficient path towards evicting the tenant.


SOLUTION 2: Transfer of Lease.

If the original tenant has an unexpired lease agreement with the landlord, and they want

out. Since the original tenant can’t just break the agreement and walk away, they must be responsible for finding a new tenant to replace their current lease and take over the obligations that the lease set fourth until the end of the lease period.



BAD TENANTS SLIDE THROUGH YOUR SCREENING PROCESS

An easy credit check and application might not sufficiently reveal prior tenant problems, but it is an excellent place to begin. Here are several ways that landlords can help to ensure their screening process weeds out the problematic tenants:


SOLUTION 1: Conduct a Thorough Background Screening.

A thorough background check involves screening to verify rental histories, credit checks, proper insurance forms and interviews for all prospective tenants.


SOLUTION 2: Speak with Previous Landlords.

When researching an applicant's background, speak with their previous, not current, landlord. If the tenant is undesirable, the current landlord might give a glowing recommendation, hoping to make the tenant your problem. Proceed with caution if only one portion of an applicant’s background check is tarnished. Depending on the severity of the issue, you can offer the applicant a trial period with a larger-than-normal security deposit or for a three-month probationary trial.


A TENANT REGULARLY DISRUPTS THE OTHER TENANTS IN THE BUILDING

While implementing a thorough screening process can eliminate many problematic tenants, it might not prevent future squabbles between tenants in the same building. Tenants’ activities can routinely, negatively, and directly impact their neighbours, for example noxious odours or using more than the designated parking spots allotted.

SOLUTION 1: Allow Tenants to Resolve Problems

A solution for such disputes is to suggest that all tenants resolve disputes between themselves. Make a clause in the lease that specifically states that all tenants are to make every attempt to settle arguments without your intervention. Include a message stating that if you must get involved, one tenant might not be pleased with the resolution, and someone stands a good chance of leaving the property.


If you find out that two tenants are arguing via another resident, politely remind them of the terms of the contract and the possible consequences, such as eviction, that may be in their futures. While tenants are likely to dispute, they can also learn to get along and respect each other.

SOLUTION 2: Step-In When Necessary

If tenants simply cannot act decently toward one another, mediation might be the only option. If neither party is cooperative, explain the consequences in a calm manner to aid in resolution. At some point, your tenants hopefully understand that the net impact is on them, not you.


As added protection – should a tenant attempt to blame the management – be sure that any lease or rental agreement contains property regulations and rules, in addition to tight clauses regarding these disagreements. It is always in your best interest to have some form of documentation that you can refer back to later when you find yourself facing a problem tenant.




A BUILDING HAS A HIGH TENANT TURNOVER RATE

One of the most common problems tenants face that cause them to leave their space is repair disputes. Therefore, ensuring that all responses to maintenance requests are professional, high-quality, and timely is one of the most effective ways to maintain a positive relationship with your tenants. To make requests easy, send out a monthly notice that tenants can check off and return to the office if they need to report an issue with their leased premises.

Here are several other things you can try to help fill your current vacancies:

SOLUTION 1: Repair and Upgrade premises.

Make sure that all broken or damaged fixtures are addressed before tenants complain. Anticipating complaints and correcting the problem relays your respect for your tenants, as well as your pride in the building.

SOLUTION 2: Frequently Monitor Competing Properties’ Amenities and Rents.

Tenants commonly vacate to save money in a different home. To prevent this, keep an eye on the competition. Watch the market and know how you fit into it – and if you see rent decreases looming on the horizon, lower your rent now. This ensures high occupancy while minimizing your loss to competitors.

SOLUTION 3: Negotiate Renewals in Advance.

It is common practice among good landlords to negotiate renewals with respectful tenants approximately three to four months before their lease is finished. Depending upon the occupancy levels at the time and the current market, you can offer an incentive or discount for renewal. If it’s necessary to increase the rent, send notices to your tenants along with a thank you letter and an explanation.

CAN I WRITE A LEASE MYSELF? IS A LEASE I WRITE MYSELF LEGAL?

Writing a good lease is a sign that the landlord is taking obligations seriously and in the clearest way possible. Using an experienced lawyer protects you in more ways than you can imagine. A less sophisticated lease could end up costing the landlord more in the long term with unnecessary operating expenses and legal fees that ultimately aggravates the relationship with the tenant. A professionally written lease also instills trust in the tenant and establishes a legal relationship where they take their responsibilities seriously, knowing a lawyer is involved and will take action if necessary.


As issues will inevitably arise for landlords, it is critical to take preemptive measures to ensure that the proper legal structures are set up to protect you when dealing with your tenants. At David Ghavitian Avocat Inc. we remain committed to helping our clients navigate through the legal nuances of a commercial property in Quebec and offering guidance that will help protect their investment.


Contact us today to learn about we can help protect your Montreal commercial property.

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