Living without a lease... risks?

July 13, 2010 6:07 PM

My partner and I will be moving to Vancouver in August. We found a great place in a lovely neighborhood. The lady that owns the condo seems incredibly kind and down to earth. That said, she says that because of rules with her condo, she can't legally rent the place to us, which means there are some details that might be concerning...

So, first of all, to all mefites replying: you are not my lawyer.

Secondly, a little more detail about the situation.

Here is her explanation of what's going on (from several phone and skype conversations): She owns the condo. She's getting married and moving to her husband's house (two blocks away). The condo has a restriction set on the number of owners that can rent out their places, and the building is already at the cap. She doesn't want to sell the place, since she's invested so much into it already (buying it in the first place, plus some very nice renos). So she wants to rent it to some reliable people who are OK with the situation.

She originally contacted us in response to either a craigslist or kijiji ad we posted. The things that she said attracted her to us as potential renters: grad students (so responsible/professional), interested in a long term stay (4 year PhD... and we're sick of moving every year), and we have two cats (she apparently loves cats).

Originally, she was asking $1500 for the one-bedroom condo, but we told her we could only afford $1200 (incl. util). She said that for the right tenants, she could afford that. Her only real interest is in covering her mortgage. She has also agreed to show us mortgage documents upon request (if we want to verify that she's not taking us for a ride. Note: housing in this neighborhood of Vancouver is just expensive. For those that know Vancouver, it's Mount Pleasant)

I think that's all the relevant pre-amble. So here are the possibly concerning details:

• Since the rental will be somewhat illegal, she says a lease would be irrelevant. In a lot of ways, I'm fine with not having a lease. I think she has more to lose than we do if the relationship somehow went sour (which I sincerely doubt based on how well we've been getting along via skype). That said, I've requested that we draft a written agreement insuring two weeks notice should either of us wish to end the tenancy
• Since she wants to keep the fact of us renting on the down-low, she has requested to keep the phone and internet in her name. Again, I think she has more to lose here if we fail to pay on time.
• Also in the vein of keeping things on the DL, she has requested that we send our moving POD to her husband's house, and then use his truck to bring our things over to the condo. Since we just downsized in preparation to move from Ontario to BC, there is almost nothing of value in the POD. Worst case scenario: losing everything in there would be terribly inconvenient and stressful... but not very expensive to recover from.

So. Overall, I think she is making more of a leap of faith with us than we are with her. Luckily for her, we're ridiculously trustworthy people, and even if she doesn't know it, we're only going to do right by her.

BUT, I still want to be as informed as possible regarding what pitfalls I may be walking into. And so I open the floor to you... what should I be concerned about and why? Or, does this seem more or less OK?

I'll check back regularly in case I need to fill in pertinent details.

posted by ndicecco to Home & Garden (14 answers total)

what should I be concerned about and why?

Her changing her mind and you not having a legal leg to stand on. Not being a lawyer and American, I have no idea of the legal implications should that nice old lady decide something different in 2 years. For instance, sure it's your stuff, but it's in HER house, with all the paper work in her name, so who's to say it's yours?

Also remember that should it go bad, murphy's law says it'll happen at the worst possible time in your PhD program.

There's no way in the world I would ever do this. The potential instability cause by someone else and you having no control over it would be too much.
posted by new brand day at 6:16 PM on July 13, 2010

Boy this sounds like a potential disaster in the making. Not because of any bad intentions on the owner's part, but because of how sneaky she wants you to be. Having the phone and internet bills go through her could raise some serious privacy issues. Also, what if you have concerns about something going on in the building? Are you not allowed to talk to your neighbors? What if someone plays their stereo too loud? What if you play your stereo too loud? Can you have a neighbor over for dinner?

My biggest concern for you would be that the ruse is discovered, and you are kicked out (by the owner via the condo board). Or, worse, that the ruse is suspected, and you start getting frantic calls from the owner asking you only to enter and leave the building in disguise, late at night, or never when you are together. What if she starts to think she needs to have a presence in the building so no one suspects she's not living there?

It could really all be fine... but it could also really backfire. If she had actually attempted this before, and knew it could work, that'd be better. I'm not saying don't do it, but please do tread carefully.

Is she asking for a deposit, by the way?

At the very least, I think you should have a written agreement that details what she'll pay for, what you'll pay for, what she'll cover, boundaries around how much lead time she needs to have before she can enter the place, etc. Honor among thieves or some such (with her being the thief, in this not-working metaphor).
posted by bluedaisy at 6:19 PM on July 13, 2010 [1 favorite]

Best answer: I lived in BC for about 2 years without a lease, and I've lived in my place in NB for about a year, also without a lease.

In general, I would agree that you're better off without one [for example, the lease I'm starting in September is mainly a list of things I'm promising to my landlords I won't do, and limitations of their liability to me].

HOWEVER, the issues for which you're hurt are big:

- Any form of forcing them to maintain the unit are out the window. New stove, insulated windows, whatever, if they don't want to do them you're boned.

- You're at their sufferance for getting kicked out. Really, in this case sufferance legally means

10 days for non-payment
1 month for cause
2 months for their use

But of course you'd have to fight that.

- You're going to have to worry about your neighbours, I think? It's a condo, you're going to see them. If she wants you to not even bring your moving truck, aren't people going to be curious about the new people, that is you?

For the record, from what I can tell, you can have a lease and the rental won't be "somewhat illegal". I took the following from one of the RTB pdfs, the one on "illegal contracts": municipal by-laws are not statutes for the purposes of determining whether or not a contract is legal, therefore a rental in breach of a municipal by-law does not make the contract illegal. If municipal by-laws don't make a contract illegal, then her condo association's laws definitely wouldn't.

So it comes down to balance. Legally, you'll have a verbal lease governed by the standard principles of the Residential Tenancies Act. It'd be a bit more annoying than normal to afford it, and socially you have to worry about your neighbours. Your call, but I say go for it.

IANYL, IANAL, and so forth.

Finally (sorry for the length), I would very strongly suggest reading the majority of the pages on the Residential Tenancy Branch's website. Especially if you go lease-less.

So note, then, that your request for a short agreement giving 2 weeks notice on either side isn't really that good for you, it's lower than is mandated by law and I don't think would be of any force and effect (it might - I'm not sure if that's an immutable requirement of the law or just a default when nothing overrides, but I'd lean towards the former.
posted by Lemurrhea at 6:26 PM on July 13, 2010 [1 favorite]

I would not be comfortable with this arrangement, and I do not agree that she is making a greater leap of faith than you.

Having no lease might seem safer to her, but it will leave you totally without protection. In many places, by receiving money from you, a landlord has an implied lease, and so therefore perhaps you'd have some grounds to sue her if she were to say, kick you out with zero days notice, or throw all your stuff on the street, or barge in every day at midnight, or steal your stuff, or whatever, but that implied agreement wouldn't feel safe enough for me (if that legal protection even exists in BC, and I have no idea if it does).

Also, her request that you do this elaborate moving thing would make me worried that she would continue to require complex machinations to obscure your tenancy there. Is she going to ask you to hide when the tenants association meets or something? What about receiving other mail (besides bills)?

Obviously, this is up to you, but if it were me, I would absolutely not agree to this arrangement.

Good luck!
posted by serazin at 6:26 PM on July 13, 2010

Her willingness to violate the rental cap is a big red flag to me. I'm sure this varies building to building but in my experience this just isn't something that can be done covertly, and when it does come to light... well, I wouldn't want to be anywhere near it. There will be large fines and a lot of pissed off people.
posted by kprincehouse at 6:27 PM on July 13, 2010

There is just soo much that could go wrong with this. My thoughts, for what they may or may not be worth:

I have a coop, not condo, in the US, but it does ring true - recently banks have tightened restrictions on the number of renters v. owners, so it makes sense she wants to make it seem as if she's living there. The tune to which the board will flip out if (or more likely when) they figure out the situation is unknown, but even if they initially turn a blind eye, if the banks get involved for a refi or sale, it could get really nasty. Or not. You have no way of knowing and no recourse.

If you're ok with that then go ahead, but it doesn't sound like that is the situation you're looking for.
posted by cestmoi15 at 6:28 PM on July 13, 2010

I can understand her position and yours in wanting to rent the place on the downlow, but the thing about the rental cap is that by violating it she is potentially lowering the property value of all the other condos in the association. I'm not sure about in Canada, but in the U.S. the percentage of rentals in a condo development affects they type of financing potential buyers can get, and having more than the allowed percentage can make it more difficult for other owners to find buyers if they want to sell their condos. In my experience condo owners don't care much for rental units in the first place, but you'd be setting yourself up for a situation where at least some of your neighbors will come to resent your presence and possibly go out of their way to make things very unpleasant for you. You won't be able to keep it a secret, so forget about that idea.

That's not to mention what others have said about the risks of not having a rental contract, and not having the utilities in your name.

If you do go through with it anyway, at the very least get something in writing from her about what will happen when (not if) the board finds out that she's renting her place. They may not have the authority to evict you, but she will possibly be fined heavily every month that you remain there, and you could find yourself living with openly hostile neighbors.
posted by Balonious Assault at 6:55 PM on July 13, 2010

I just recently got out of a situation like this.

The co-op building I was living in had a rule that unit owners could only rent out their apartments for a certain number of years. My roommate and I outlasted this limit, but our landlady has no interest in either selling or moving in herself. Thus she asked us if we'd like to stay on, indefinitely, without any sort of formal lease.

Of course, this was easier for us to agree to because we'd already lived there for a long time, and we trusted our landlady. We also live in the states, in a city with very strong protections for renters. I was constantly paranoid about something going wrong, but nothing ever did.

In the end, I moved out for totally unrelated reasons. My former roommate is still living there, with no concern about the lack of a formal lease.

I'm not sure how to advise you. One thing that reassured me in my own case is that, in the US, it is very very hard to evict tenants. Even tenants who don't have a formal written lease. Even tenants you never gave permission to occupy the house! Apparently it can even be difficult to get rid of an unwanted houseguest, if they are determined to stay. And as far as US law is concerned, your landlady could not claim your possessions as hers or anything like that.

I have no idea what Canadian law is like in terms of this stuff. It also probably doesn't help that you're moving to Vancouver from somewhere else - if I were moving to a new city I'd probably want everything to be as above board as possible, just on the off chance that anything went wrong. Certainly if you want to for sure move into a place where you can definitely stay for four or more years, this is probably not the place for you.
posted by Sara C. at 7:00 PM on July 13, 2010

It sounds like she's in a tight spot and will have difficulty finding tenants; maybe she should pay you a deposit in case something goes wrong?
posted by Pants! at 8:23 PM on July 13, 2010

You have had several discussion with her. What has she said about mingling with the neighbors? And using a pick up truck to deliver your belongings is only slightly less obvious than having a container delivered. Does she know of other illegal sublets? Maybe the rental cap is not enforced. I've lived in a somewhat similar situation--illegally living aboard a sailboat, with a much more serious penalty for getting caught. I wasn't thrilled with the situation but I managed, and there were people who'd been doing the same thing for 20 years.
posted by TWinbrook8 at 9:01 PM on July 13, 2010

Not having a lease is not a big deal but you do want to have a rental agreement. If you don't you will have no leg to stand on if anything goes wrong. The situation you describe sounds like it could have all sorts of things go wrong. Personally, I would run away from this!

There are a lot of rentals right now in Vancouver in your price range, go find yourself another place.

I have found in the past few years that the best rental situations are places that have a middle man. A management company deals with the rental and the tenants. Things get repaired right away (and properly), and rules are followed. Generally everyone is happy.
posted by sadtomato at 11:06 PM on July 13, 2010

Response by poster: You are all wonderful! Thank you for the input. I'm particularly grateful for the link to the Residential Tenancy Branch provided by Lemurrhea.

Looking over all the posts, I have two main concerns that I think I can handle: 1) We should draft up a tenancy agreement. It looks like the RTB has a template that will prove useful. 2) We need to talk to the landlady about how much sneakiness may be required and what happens if/when other people in the building get wise.

Thank you again!

And to answer another question: to date, no deposit has been required or even mentioned.
posted by ndicecco at 4:55 AM on July 14, 2010

The advice Lemurrhea provided is sound, but I would also look at it from a practical perspective: while $1,200 for a one-bedroom in Mt Pleasant is a reasonably good deal, it's not so fantastically amazing a deal that it would necessarily balance out the inconvenience of sneaking around your neighbours and having someone else manage the utilities.

Furthermore, you'll still have the normal protections of tenants in BC with or without a lease, but the chances of *needing* them are greater when the decisions about eviction aren't entirely in the hands of the landlord (i.e. her strata may require it and neither of you can really predict the ifs or whens).

I'd shop around a bit more before sealing the deal. You've got two more weeks til August and can do some heavy house-hunting in that amount of time.
posted by Pomo at 7:30 PM on July 14, 2010

$1200 for an apartment which welcomes cats and includes utilities in Mt Pleasant? If she asks for a deposit, then google "craiglist rental scams Vancouver" and see what's happening here.
posted by Neiltupper at 10:01 PM on July 14, 2010