One of the most unsettling phrases landlords will ever hear from tenants is “I’m moving out.” While in some hot markets, turning over tenants can mean substantial rent increases, those rent cheques can’t be cashed until the place is vacated, cleaned and re-tenanted. In the short-term, a move-out often demands a lot of money and time and generates a fair amount of stress. Let’s take a look at how to make this inevitable experience less stressful, more organized and more predictable.
Begin at the end
Many landlords don’t realize that the eventual divorce from a tenant should start at the time of the original marriage. When you sign a lease agreement and make move-in arrangements, it’s important to also discuss the move-out procedures, for a few important reasons.
First of all, doing so allows you to show your tenant that you are an experienced, responsible landlord who plans on serving them well throughout their tenancy. Second, you can set clear guidelines and expectations on what they must do if they decide to move out. At this point, tenants should agree to:
- Give proper written notice
- Tolerate showings
- Move out of the property on time
- Take all their belongings and leave the property in the same condition as when they took it (minus normal wear and tear)
- Return the keys to you
These reasonable demands allow renters to know precisely what’s expected of them. Following them is now their responsibility.
Make sure the tenant’s written notice is understood to be legally binding and required. Technically, notice could be given in any reasonable way, but it’s important to have it writing for mutual protection and to make sure both sides are fully aware of the specific move-out date. The best way to give notice is through the prescribed government form (each province will have something slightly different), as it has all the legally required information, is easy to fill out and is valuable evidence for adjudicators in case of any dispute.
While there are some legal requirements, such as 60 days’ notice, it’s always possible to settle on something different as long as both sides are in agreement. You can use form N11 in Ontario for that purpose.
Some tenants might try to use a sudden move-out threat to get something from you. You should never negotiate on a tenant’s terms. If this happens, stay calm and call their bluff. Remind them of the move-out procedure they previously agreed to and tell them, “Here’s the form for you to sign. Let’s fill it in with all the details now.”
That tends to shut down the threat on the spot, but if a tenant does sign the notice, it’s still a win for you because you’ll be starting the process of getting the property re-rented sooner rather than later.
Let’s assume you’ve done all the suggested pre-framing and one of your tenants calls to inform you that he’s moving out in 60 days. The first thing to do is arrange an inspection of the unit. This inspection serves a few purposes: You’ll show your tenant that you’re taking his move-out seriously, you can discover what repairs need to be done, and you’ll find out if the unit is in good enough condition to be put on the rental market before the tenant moves out.
Usually, inspections show that it’s better to wait until after the tenant moves out because units are often messy, overcrowded with unhelpful tenants, smelling of pets, etc. There’s no need to panic – by listing too early, you could wind up attracting lesserquality tenants. Knowing in advance what repairs the unit needs will allow you to line up contractors to start any needed repairs as soon as the property is vacated.Usually, inspections show that it’s better to wait until after the tenant moves out because units are often messy, overcrowded with unhelpful tenants, smelling of pets, etc. There’s no need to panic – by listing too early, you could wind up attracting lesserquality tenants. Knowing in advance what repairs the unit needs will allow you to line up contractors to start any needed repairs as soon as the property is vacated.
It’s a good idea to follow up with your tenants a couple of weeks before their moveout date to make sure they’re really going to go. They may have failed to find another place or have had their plans delayed, or they might have decided they want to stay a bit longer. Whether to allow them to do so will be your call.
At that point, your renters should have a clear plan for when and how they’re going to move. Schedule the move-out date and time, and let them know that you’ll be coming over to inspect the unit. Remind them that they must take all of their belongings, clean the unit and have the keys ready.
Even if you’re not able to be there on the agreed day and time, it’s wise to put some pressure on them to do their job in preparing the unit. Otherwise, they might not clean it properly. You can always let them know an hour or two before the move-out meeting that you’re too busy to come. Ask them to leave the keys on the table and lock the door from the outside, assuming you have your own copy of the keys.
By the time the unit is vacated, you should already have contractors and/or painters ready to prepare it for your new tenant. The sooner they can finish the job, the sooner you can bring it back to the market, which might reduce the idle time in between tenancies. If you have the opportunity to fill your property without a gap, talk to your tenants about vacating a few days before the deadline and sweeten the deal with some incentives. It’ll get your next tenant in place – and aware of your move-out process – more quickly.
Valeri Khromov is a multiple-award-winning real estate entrepreneur with more than 10 years of experience creating great deals with unusually high cash flow for himself and his partners. Contact him at [email protected]
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