Should investors be on the hook for their tenants’ bad behaviour?

Investors should be bracing for more Canadian municipalities following in the footsteps of a small university town in Nova Scotia, which is suggesting that landlords face fines if their tenants routinely ignore noise and liquor laws.

The proposed nuisance bylaw, backed by the mayor of Wolfville, N.S. (home to Acadia University) and some of the town’s councillors, has been put to the town council.

But Gillian Irving, an Ontario investor with five student housing properties in Hamilton, says she wouldn’t be surprised if such a bylaw became more widespread across Canada.

“For me, investing in student housing is all about knowing the risks and mitigating them, like having a property manager who is all over [the tenants],” she says.

“My guy is known as the ‘party wrecker’. He goes around on Saturday nights and prevents those things from happening.”

Another way to be prepared for the risks of renting to students, adds Irving, is to include a clause in the lease that ensures the investor is covered in the event a fine is handed down for bad tenant behaviour.

Irving says: “There would never be any expectation that we would have to pay for it.

“In Hamilton, if there are noise complaints by a neighbor, [the police] will issue a warning and if they have to come back they will fine the students around $280.

“Multiple complaints do result in a letter being sent to the landlord. The city might try, if there were multiple noise violations, to get the landlord to pay, but our leases would be set up to prevent that.”