Using a realtor to find tenants
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 and that you have confirmed the area’s property zoning accommodates your rental property. Also, that you have confirmed your building meets all the relevant fire and electrical safety codes. Plus, you’ve also likely ensured that the former owner obtained all the appropriate building permits.
The short answer to your question is that you should discuss with your sales rep the prospect of finding tenants — first, to find out if they arrange rentals in the first place. And, second, if they do, how much experience do they have finding tenants for landlords?
You will also need to know how much will you have to pay in commissions and fees to the salesperson if they agree to find you tenants.
There are many advantages to working with a registered real estate salesperson or broker, starting with the experience, contacts, knowledge of the local housing market they possess and the ethical standards they must uphold. They can also: Post the listing on Realtor.ca, if they are a realtor, and work with other real estate representatives who may have clients looking for rental housing;
Arrange appointments and show your building’s units to apartment hunters;
Screen prospective tenant applications;
Review and answer any questions you have regarding lease agreements.
You will have to come to an agreement on the fees you will pay the salesperson for finding your tenants. Your agreement could also include additional fees for services such as advertising and marketing, so ask your salesperson to walk you through it.
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.
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 about the home-buying or -selling process, please email information@reco.on.ca.
Joe Richer is registrar of the Real Estate Council of Ontario (RECO) and contributor for the Star. Follow him on Twitter: @RECOhelps