Insuring rental suites

On June 5, 2012, the Vancouver Sun published an article about homes with rental suites in BC. In it, Daniel Mirkovic, the President and CEO of Square One, reported that nearly 25% of BC house owners rent out a portion of their home.

Renting out part of your home can be a great help in getting your mortgage paid off. But make sure you discuss your plans with your insurance provider before you take that step.

  • Your home, which was originally insured as a single family home, has now become a two-family dwelling. If you fail to advise your insurance provider and obtain the right coverage, you may find yourself with no coverage at all in the event of a loss.
  • The replacement value of your home will very likely have gone up if you’ve completed a suite in your basement. You’ll need to increase your coverage to make sure you’re properly insured.
  • Any furnishings in the suite, such as a dishwasher, fridge, stove, or draperies will not be covered under your policy unless you’ve added “landlord’s property” insurance.
  • You may be counting on that rental income to pay your mortgage. If your tenants move out after a fire or other insured loss, make sure you have “rental income” insurance, to replace that lost revenue while your home is being repaired.
  • More people living in the home mean a higher liability risk. Your insurance provider can usually increase your coverage to account for this.
  • If you’ve converted your garage to a “coach home,” your detached structures coverage may no longer be sufficient. You’ll need to upgrade this to cover a “secondary dwelling.”

That rental suite can be a dream come true when it comes to paying off your mortgage. But if not properly insured, it can become a nightmare. Take a little time to discuss your plans with your home insurance provider so that you can rest easy!

Visiting and entering a rental property

As a landlord, you know how important it is to make regular visits to your rental property. Even if you’ve screened your tenants thoroughly, regular visits help to ensure the unit is being properly maintained. It’s also a good way to make sure you don’t end up with a destroyed home due to a marijuana grow-op. Unless you live right next door and can keep a constant eye out, you’ll need to make arrangements to visit the property. You can do a drive-by whenever you want, but how often can you actually go inside and inspect the premises?

That’s a sticky issue. There are laws around how and when you can visit your property. In BC, the law says that “A tenant is entitled to exclusive possession of a rental unit, including reasonable privacy, and quiet and peaceful enjoyment.” If you drop in without giving the proper notice, you are in violation of the law and could face nasty consequences. It is a good idea to note in the rental agreement that you will be making regular inspections. In BC, you can inspect your property once a month, if you like.

When can a landlord enter a rental suite?

In BC, landlords can enter a tenant’s rental unit if:

  • There is an emergency, and entry is needed to protect life or property. This would be a situation where further harm would occur if the landlord had to take the time to provide notice.
  • Written notice to enter is given to the tenant not less than 24 hours, and not more than 30 days before.
  • Permission is given by the tenant, (and that permission was not more than 30 days ago). It is still always best to provide written notice and to record the circumstances of the entry. If a landlord just drops by, tenants may later say that they give permission only because they felt intimidated by the landlord.
  • Entry is required for the landlord to provide housekeeping or similar services under if included in the tenancy agreement.
  • It appears the unit has been abandoned by the tenant. For example, the tenant has not paid rent, and there are no signs of occupancy.
  • An arbitrator has provided an order allowing entry. If the tenant refuses entry to the landlord, when the landlord has provided valid notice, the landlord can apply for an “Order for Entry” for a certain time and purpose. At this point, the Arbitrator then decides whether the request is reasonable. For instance, if the request is for an “Open House,” where the tenant’s belongings are not protected, the Arbitrator may decide the request is not reasonable.

Written notice of entry

When the landlord provides the tenant with written notice that he wishes to enter the property, the notice to enter must state:

  • A “reasonable purpose”; and,
  • A time between 8:00 am and 9:00 pm.

The Residential Tenancy Act also outlines the way in which the notice must be given:

  • If left in the mailbox or mail slot, or if attached to the door (or another conspicuous place), it is only deemed notice after 3 days.
  • If sent by mail, it is deemed notice after 5 days.
  • If faxed, 3 days.

So, landlords need to consider these additional times when planning when to enter the property.

The tenant can still refuse to let you enter if the requested access is not for a “reasonable purpose” as mentioned above. What’s reasonable? This could include wanting to:

  • Inspect the property for damage;
  • Make repairs to the property; and/or,
  • Show the property to prospective tenants or purchasers.

Even when a landlord is entering the property for a “reasonable purpose,” it may not be considered “reasonable” if the landlord enters too frequently. In BC, the Act states that a landlord can inspect rental units once a month.

It’s best if the landlord and tenant can agree on reasonable times for entry. If they can’t agree, and the landlord prevents the tenant from having “reasonable privacy, and quiet and peaceful enjoyment,” the tenant can apply for arbitration. This means that the landlord’s rights to enter the property could be severely limited or suspended entirely.

To avoid problems with accessing a rental property, the landlord should:

  • Give tenants the proper notice to enter before visiting the property.
  • Make sure you have a valid reason for visiting, such as, repairs or regular inspections.
  • Record the reason and the time of every visit.

Discuss visits and inspections with your tenants right from the start. Let them know right up front that you’ll be making regular inspections. If they’re expecting the visits, rather than being surprised, it’s much less likely that they’ll complain. And regular inspections will let you rest easy, knowing that your home is being used as a home, and not a criminal venture. If you have any other questions, you can always contact Square One at 1.855.331.6933 for more information.

Other commonly asked questions

  • Is my rental suite legal? There are many aspects that qualify a secondary rental suite as either legal or illegal. For a suite to be considered legal in British Columbia, it must be both registered with the city in which it resides and meet its building permit requirements. While some landlords do rent out unauthorized or illegal suites, they run the risk of incurring lawsuits, having to return the home back to a single-family dwelling or legalize the suite if they are discovered, or having issues with their income being recognized as legitimate.
  • Is there a specific landlord “24-hour notice form” I should submit for suite entry? There is no official form that must be submitted to a tenant in the event that you must enter the rental property, other than the stipulations that your request clearly state your intent, the reasoning behind it and your planned time of entry.

    In most situations, something as simple as a phone call, text message or email will suffice—though leaning toward text or email might be worth considering, since these options leave behind proof of notification should any unforeseen disputes arise later. If the tenant is unresponsive to your requests, however, a more formal notice of entry may be required. In these cases, it’s best to submit a paper request for entry either through the mail or by leaving it directly at the property in a conspicuous place, such as in the mailbox or attached directly to the main point of entry.

Get a free quote

Get an online home insurance quote and see how much money you can save by switching to Square One. Or, call 1.855.331.6933 for a phone quote. Either way, it only takes 15 minutes to get a personalized quote.

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Even when you take precautions, accidents can happen. Home insurance is one way to protect your family against financial losses from accidents. And, home insurance can start from as little as $15/month.

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