I have a confession to make. I was an illegal landlord. The law changed. The line moved and I found myself on the wrong side of it. But I’ve changed that now. I took the necessary steps to become a legal landlord and have my rental properties licensed.
My excuse for being an illegal landlord for the past year or so is partly personality. I’m a self employed real estate agent and self dependent landlord and property manager. People like me don’t like to have legislation imposed upon them. Entrepreneurs are the fur trappers, explorers and sod-busting settlers of our time.
Don’t fence me in, man.
The other reason I was “an illegal” is that the licensing process is confusing, expensive and uncertain. But I’m going to take it on and explain it as I go.
I went down to the City of Waterloo rental housing by-law window and picked up a package. It has three parts:
Certificate of Insurance
Property Maintenance Plan
Forms filled out by fictional John Smith for his Class A Residential Rental Property at 123 King St N, Unit A
Floor plan drawings
Police Criminal Records Check form
Other forms: Transfer/deed of Land, Status Certificate.
The by-law provides for the licensing, regulating and governing of residential rental units in the city of Waterloo. It was last amended on August 12, 2013.
This municipal act provides for a system of licensing and may:
Prohibit operating without a licence
Refuse to grant a licence
Revoke a licence
Suspend a licence
Impose conditions on obtaining a licence
Impose conditions on holding a licence
Impose conditions on suspending a licence
Impose special conditions based on class of licence
Impose penalties for non-compliance.
Why was the by-law created?
It’s aim is to protect the health and safety and human rights of the residents of rental units. It is suppose to ensure that certain essentials (plumbing, heating, water) are provided. It hopes to protect residential neighborhoods from decline.
What you can’t do without a licence.
Without a licence, you can’t:
Carry on a residential rental business
Permit someone else to carry on a residential rental business
Collect rent or permit rent to be collected
Pretend to be licensed
You also cannot do any of that for any location other than the location licensed. That means if you own two houses (or two units in a duplex) you have to have them both licensed.
You cannot transfer or assign the licence to someone else.
You must be at least 18 years old to get a licence.
Who doesn’t need a licence?
You don’t need a licence if you’re a tenant subletting to someone else
Student residences operated by a university or college
Group homes, retirement homes, special care…
What if I get caught without a licence?
The minimum fine is $350.
The maximum five is $25,000 for the first offense. It goes up for repeat offenders and is higher still for corporations.
What class is my unit?
There are currently six classifications of rental housing licenses.
Class A: All those that aren’t something else
Class A is a “catch all”. It is the default class. Unless you are in another class, you are Class A. It means your unit has:
Four or fewer bedrooms
Seven square meters per occupant
No more than 40% of the units gross floor area can be bedroom space
Only bedrooms can be used as bedrooms
Class B: Owner Occupied
Same as Class A except up to 50% of floor area can be used as bedrooms and the owner lives in the building.
Class C: Five or more bedrooms
These are lodging houses that are not more than three floors in height and 600 square metres in building area. Kitchens and bathrooms are shared. Bedroom doors have locks. There shall be no more than one kitchen and two bathrooms and no fewer than five bedrooms. There’s more…
Class D: Lodging houses
Welcome to the big time. There are a lot of rules but the rewards are great. Read up.
Class E: Temporary rental units
A three year license. Once expired, it cannot be renewed unless the unit was subsequently owner occupied for two years. This means you can rent your house out for three years. But then you have to come back and live in it for two years before you can rent it out again.
Class Z: The new one.
Where there are four or more units and where the units are horizontally separated. Class Z was created for buildings like the one at 12 Bridgeport Road. I wonder why they didn’t label it Class F?
Knowledge is power. It’s easier than you think to license your place. It’s easiest, of course, to buy a licensed place. Although licenses are not transferable, if a place is already licensed, there should be no reason that it will not be licensed again. Caution: Watch for units licensed for five but having six bedrooms, recent renovations and improvements… the unit may no longer comply.
Once you become familiar with the licensing requirements you can cautiously proceed with your purchase. I can help.
If you’d like to read about my seven month odyssey to submitting my application please read: How the ESA and City Hall staff held up my rental housing application.