The Canada Mortgage and Housing Corporation requires your rental properties to be in a good state of repair. You must meet a range of zoning, building, and fire safety standards, which vary by locality and province, before you can even begin to legally rent out your property. You also must also maintain these standards with ongoing maintenance and repairs at your own expense. Local, provincial, and other regulations aim to protect the health and safety of your tenants, and by educating yourself on your obligations as a landlord, you can provide a safe rental space for your tenants and protect yourself from liability in the case of accidents.
Emergency vs. Non-Emergency Repairs
While you’re responsible for the costs of all repairs required to keep your property up to code, it’s especially important to take note of the difference between emergency and non-emergency repairs. Tenants have the right to take matters into their own hands if you do not intervene quickly enough for emergencies. Minor leaks or sticking doors do not qualify as emergencies, but a flooding basement or entryway door that does not lock requires an immediate fix to maintain the safety of the tenant and integrity of the property. In the case of an emergency, tenants can hire out repairs if they can’t reach you, and then foot you the bill. To control your repair costs and make sure the job is done right, tackle these jobs right away or prepare to pay an outside contractor of your tenant’s choosing.
Legal Consequences for Non-Compliance
If you fail to follow local safety regulations, such as the fire code, the courts may hold you criminally liable for any harm to your tenants due to unsafe conditions. In a 2014 Ontario Superior Court case, the province charged a landlord with six counts of criminal negligence and mischief when a fire resulted in the death of one tenant, the injury of another, and the endangerment of two more. Because the landlord knew about existing fire code violations, tried to mislead a fire inspector, and cut corners on smoke detectors to save money, the court found the landlord guilty of criminal conduct and sentenced him to both fines and jail time.
Capital Investments vs. Current Expenses
When you make repairs on your home, it’s tempting to treat those expenditures as investments in your property and claim them as capital expenses come tax time. However, typical regular and emergency repairs are more likely to fall under the category of current expenses for tax purposes. According to the Canada Revenue Agency, if your maintenance or repairs are of a reoccurring nature, such as applying a new coat of paint, or if they restore the property to a previous state, such as replacing a broken appliance with a similar model, then any expenses you incur are current expenses. Taking the time to understand your responsibilities as a landlord and keeping up with emergency and non-emergency repairs puts you in a better position to provide a safe and habitable home for your tenants and save yourself the headache of disputes and liabilities. When you keep track of your expenses, you can claim repairs at the end of the tax year as current expenses to save on your tax bill.