the Rental - Alberta Residential Landlord Association

the
ISSUE 4
VOLUME 20
WINTER 2015
Rental
gazette
Letter Re: Bill 204
B Y LY N N B I G G S , A R L A E X E C U T I V E D I R E C T O R
Dear Minister and Ms Drever:
We are writing to indicate both our general support for the concept
and intent of the above noted Bill and our concern for the safeguarding
of the rights of all individuals in our Province. The Alberta Residential
Landlord Association (“ARLA”) has been actively involved in the process
initiated in 2014 by The Centre for Public Legal Education Alberta
involving analysis of what can be done to help solve some of the
serious problems surrounding domestic violence. As The Honourable
Ms Drever and the Alberta Government have noted, this type of violence
takes many forms and victimizes citizens of all stripes, both sexes and
every age group.
We are a not-for-profit society and our members include landlords of
some 65,000 residential rental units and service providers to those
units. Our mandate, in respect of legal developments, is to ensure a fair
balance of the rights and interests of all the stakeholders in our industry
with those of our clients, the tenants who live in our premises and who
are the valued lifeblood of our businesses.
We do, as stated above, support efforts to protect victims of domestic
violence and within reasonable bounds, want to do our part to ensure
their safety and ability to live satisfying, productive lives without fear of
unwarranted attack by obsessive or misogynistic partners. Landlords
should not, however, bear the brunt of this shield.
Our review of the proposed Bill 204 has highlighted what we perceive
as inequitable treatment for a segment of our population in the
effort, however noble, to protect the physical and emotional safety of
vulnerable members of society.
It is never an easy task to promote financial rights against the backdrop
of the societal imperative to protect women and children (the most
frequently cited victims of abuse) but we must not trample on the rights
of innocent parties in attempting to solve such issues.
Will there be an opportunity for public input on this Bill prior to it coming
into force? It is desirable to be sure the end product sensibly meets the
needs of all stakeholders.
As our organization sees the situation there are numerous unanswered
questions to be resolved as well as technical points:
a) Is it fair to expropriate the security of landlords in regards to their
security deposits?
INSIDE
Bill 204 Response........................... 2
2015 Members.............................. 3
2015 ARLA Board........................... 4
Events Calendar............................. 4
President’s Message....................... 4
Editor’s Message............................ 6
Renting Your Condo........................ 7
Insurance Myths............................. 8
Apartment Vacancies.................... 10
Interest Rates 2016...................... 12
Business Fraud............................. 15
Fire Extinguishers......................... 19
Stub It Right Campaign................. 24
b) Is it right to allow the arbitrary termination of legal contracts (leases)
without compensation or due process?
c) Should abusers not be the ones burdened with the expenses
resulting from their treatment of others?
d) When a rental unit is vacated who is responsible for cancelled or
unpaid utilities? Is this to be a further burden on a landlord?
e) Whatever amendments are made to this statute, should not the
Mobile Home Sites Tenancies Act be similarly amended?
It is our view that a problem on the scale of domestic violence should
not be attacked in piecemeal fashion but only after a thorough
investigation of all factors and ensuring that society as a whole
assumes responsibility; not leaving one small segment to deal with its
financial repercussions.
We would be happy to discuss the above or any other aspect of the Bill
at your convenience. We appreciate your consideration of our concerns.
Yours truly,
Lynn Biggs, ARLA Executive Director
ARLA works tirelessly to promote professionalism, education and equity in all aspects of the
Residential Rental Business for the benefit of industry members and tenants.
208, 10544-106 St. Edm, AB T5H 2X6
Ph 780-413-9773 Fx 780-423-5186
The opinions expressed in any article in
The Rental Gazette are those of the author of
that article and not necessarily those of the
Alberta Residential Landlord Association.
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Welcome New Members 2015
Owner / Operator Members
1819390 Alberta Ltd. Shaun Rains • 1919100 Alberta Ltd. Clayton Grahn
Ammar Shad • Anaka Leah • Andersen John • Atkinson Lana • Banh Long & Yen-Le • Barrett Amber
Beitz Peter • Bentall Kennedy Debra • Bloom Tony • Boe Suzanne • Bokenfohr John • Botticelli Vivianna
Bresaph Enterprises Inc Jennifer • Broadribb Hallie • Buteau Kassie • Cambell Deborah
CasaWise Management Brennan Whitehouse • Catillo Edgar & David Castill • Chamulka Colette • Chou Ming-Ying
Cook Lois & Virginia • Cooke Justin • Currie Terryn • DeMos Terri • Deng Amber & Bing • Dennis Rendi & Joe • Dimmick Heather
Dodd Raymond & Beatrice Drover Krystle • Durrant Evelyn & Craig • Dvorak Sara • Eberle Lisa • Eichel Brehn • Filan Greg
Fraleigh Jessica & Brad • Free and Clear Property Management Darryl • Gagnon Jason • George Joseph • Gering Don
Gilbert Alex • Gollpudi Butchi • Goossen Cynthia • Gourlay Laura • Green Judy • Haller & Sbardi Erik & Jessica • Hamilto Amy & Scott
Hansen Jonna • Hauck Joshua Hearin Ab • Hicken Crystal • Hiebert Linda • Hobson David & Heidi • HomeEd Bill • Hutchinson Graham
James Mary • Jasper Place Health & Wellness Centre Murray Soroka • Jo-Ma Investments Inc. Grant • Journeau Geraldine
Jurina Roman • Katchinskiy Nir • Kennedy Veronica • Kheradpay Mojgan • Kiryluk Dan • Kostyniuk Wes • Kremtzul Vince
KRF Holdings MaryLou & Clayton Kruppke • LaGrandeur Philip • Langendoen Hilda • Lee Susie • Lenzen Harlan • Lepatsky Arthur
Li Ernest • Li Rong • Li David • Lindsay Kim/Clay • Liu Celestine • Lowe Nancy • Lukusta Nathan • Lutz Lesley • Lutz Maxime & Ken
Macdonald Michelle • MacTaggart Place Theresa • Magnum York Property Management Debbie Michaels • Mayfair South Linda
Mearon Brian • Michau John • Moore Patti • Mortensen Darryl & Amanda • Mosca Mary • Nemec Kamil • Nichols Ian
Nielsen Lorraine • Nielsen Cynthia • Norman Jason • Ogoko Chueze • O’Neill Jenna • Pacholok Kyle • Peacock Vince • Penner Carol
Persaud Robin • Pham Nhan • Prokuda Kristina • Pudyrcki Cindy • Quality Assured Property Proff Jerry
Quality Assured Property Proff Johnny • Quedado Megan • Quilala Manuel • Quock Kyle • Rajagopalan Sivakumar • Remley Chris
RHI 2015 - Series 1, Inc Renee • Roesler Randy • Rogalsky Darrell • Rutar Brian • Ryzak Brodie • Saint Thomas Health Center Marlene
Sawasyn Mike • Schmidt Susan • Schoepp Bob & Sharon • Seerattan Brenda • Selby Bruce • Sharma Yash • Sharun Kirstin
Skyline Living Andrea • Smith Ann • Stewart Greg • Stollery Randy • Tamarack Gardens Theresa • Tanasiuk Eden
The Quiet Properties Jason & Eddie • Thompson Kody • Timmons Barry • To Rita & Nhat • Tong Rachelle & Joseph
TPI Ashley • Van Der Walt JC • Vaudrin Adam • Verghese Abraham • Vice Shirley • Virk Dave • Vlodarchyk Marty
Walker Jordan • Wallace Roy & Karen • Watson Susan & David • Wells Shawn • Wendling Michelle • Williamson Tracy
Workhoven Jason • Woycenko Sharon • Yue Jennifer
Service Members
3D Fire & Safety Ltd. • 4Rent.ca • 8760 Group • ABP Durabuilt Windows & Doors • Access Gas
ACCLAIMED! Heating, Cooling & Furnace Cleaning • Active Pest Solutions • AEDARSA • Affinity Credit Solutions • Alarm Tel
Alberta Roofing Contractors Association • All Reach Glass Services Inc. • All Weather Windows • Amptec Fire & Security
Amre Supply Co. Ltd. • ATB Financial • Atrium Morgage Investment Corporation • Austin Security & Surveillance • Avison Young
BFL Canada Insurance Services • Butler Plumbing Heating & Gas Fitting • Canada Mortgage & Housing Crop • Canadian Tree Care
Canadian Valuation Group • Canfab Products Ltd. • Capitall Exterior Solutions • CBRE • CCS Contracting Ltd.
Centimark Roofing Ltd. • Christensen & McLean Roofing Co. • Cloverdale Paint Inc. • Coast Wholesale Appliances LP
Coinamatic Canada Inc. • Culada.com • Cushman & Wakefield • Davey Tree Expert Compnay of Canada
DF Technical & Consulting Services Ltd. • Dial Locksmith • DKI-Disaster Kleenup International • Edmonton Eviction Services
Edmonton Exterminators Ltd. • Epcor Water • First National Financial LP • Garland Canada • Golden Arrow Pest Control Inc.
Got Stump Inc. • Hybrid Horticulture • Hydro-Flo Plumbing and Heating • Isuf • IVIS Inc. • Karlen-Elecom
Leading Edge Roofing and Consulting Inc. • Nelro Services Ltd. • OAB Reliable Carpet Care Inc. • Orkin/PCO Services Corp.
Paramount Flooring • Park-Aid Asphalt/ Maintenance Ltd. • Payment Quality Consulting Ltd. • Peoples Trust • Places4Rent.Inc.
Poulin’s Pest Control • Premium K9 Serices • Rainbow International Restoration of AB • RE/MAX Real Estate (Commercial Division)”
Rent Check Corporation • RentEdmonton.com • Reynolds, Mirth, Richards, & Farmer • Rona Inc • Royal Bank of Canada
Serv-It Process & Bailiff Services • Shaw Communications GP • Solution 105 Consulting Ltd. • Superpro Painting Services
Telus Communications Inc. • The Brick Warehouse LP • The Hot Water Company • Thermotech Environmental Inc.
Thermo-tech Mechanical Services • Titan Construction • Trail Appliances Ltd./Commercial Laundry
Treasures Insurance & Risk Management Inc • TVS Tenant Verification Service Inc. • Venture Engineering Consultants Ltd.
West Point Roofing Inc. • William J. Rhind & Associates Ltd. • Wilmac Glass Services Ltd. • Yelllow Pages Next Home • Zipsure
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3
President’s
Message
ARLA
BOARD OF DIRECTORS
BY SHERRI DOUCETTE, PRESIDENT
EXECUTIVE COMMITTEE
It is almost impossible for me to believe that an entire
year has passed since I took on the role of President of
our Association. The theme of change identified in the
Spring Edition of the Rental Gazette has played out in
many ways as 2015 progressed. From a simple name
change for our Association to changing governments
at both the Provincial and Federal levels, with regard
to the latter there is much unknown about the future of
operating residential rental real estate in Alberta.
Membership renewal time is upon us and is imperative
that we maintain and grow our membership both to
provide resources and to have a strong and unified
voice when legislative agenda’s fail to properly account
for the potential impact on an entire industry As an
example: the potential advent of legislation such as Bill
204, Safer Spaces for Victims of Domestic Violence,
passed second reading with barely a nod to the
serious negative impact such quick and ill-considered
legislation could have on our entire industry. You
will find a copy of the letter our Association has
sent to various members of the legislative assembly
expressing our support of the general idea behind Bill
204 while also communicating our serious concerns
with the specifics of this particular piece of legislation.
President: Sherri Doucette
Your membership is highly valued, however, in
changing times your active participation is key to
ensuring our Association is able to properly and
accurately reflect the views of our members. I
encourage everyone to provide input on topical issues
by attending meetings or writing/ e-mailing the
Association Offices when issues arise.
1st Vice President: Sandy Pon
I would like to thank everyone for their participation
and support in 2015; in particular my fellow board
members, our Executive Director Lynn Biggs and our
Assistant Program Co-ordinator, Melanie Robillard.
Without these key individuals the Association would
be unable to serve the membership in any meaningful
way. I am grateful for the opportunity to have acted
as your 2015 Association President and once again
encourage all members to become more active in this
great organization. Cheers to all!
DIRECTORS
Past President: Bill Begley
2nd Vice President: Dan Posa
Secretary / Treasurer: Marty Kurpershoek
Constitutional: Bill Begley
Education & Conference: Jonathan Bussey
Government Liaison: Sonny Mirth
Membership & Benefits
Carolyn Flexhaug and Michelle Roseboom
2015 EVENTS
Newsletter: Raphael Yau
4
January 22
Seminar: Fire Code Program
General Meeting Luncheon
Program & Social: Donna Monkhouse
February 19
Seminar: After the Court Order
General Meeting Luncheon
Public Affairs & Social Media:
Lynn Hamliton and Pete Ages
March 26
Seminar: Difficult Tenants
General Meeting Luncheon
April 23
Seminar: Ask the Expert
General Meeting Luncheon
May 14
Seminar: Death of a Tenant
General Meeting Luncheon
June 11
Landlord Boot Camp
June 18
Golf Tournament
September 24
Seminar: Collections
General Meeting Luncheon
October 22
Seminar: After the Court Order
General Meeting Luncheon
November
AGM & Christmas Social
*New Location: Chateau Louie Hotel
ARLA ADMINISTRATION STAFF
Lynn Biggs
Executive Director
director@albertalandlord.org
Melanie Robillard
Program Administrator
executive@albertalandlord.org
(117 Street & Kingsway Avenue)
General Meeting Luncheon................................................ $32
General Meting Luncheon Non-Member............................ $40
Annual General Meeting & Christmas Social...................... $40
Education Seminar Members............................................ $60 *subject to change
Education Seminar Non-Member....................................... $75 *subject to change
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alber talandlord.org
Membership Renewal Time 2016
December 31st marks the end of the Membership year for 2015.
Renewing your Membership and belonging to a professional
Landlord Association has huge benefits.
For further information and to renew your 2016 Membership,
please call 780-413-9773.
Thank you for your support!
Alberta
Landlord Forms
ARLA has recently revised its Residential Tenancy Agreement and updated its In & Out
Inspection form and Notices. These forms are available to any residential Landlord in Alberta.
ARLA carries all the required Landlord forms that owners, op-erators and managers across
Alberta use in their daily business. These documents have been professionally developed to
the highest industry standard and conform to Alberta’s Residential Tenancies Legislation.
All forms are self-carbonized (NCR) documents and are NOT available in electronic format.
Reminder to place your order NOW if required for the New Year.
Purchase On-Line at: www.albertalandlord.org
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5
Editor’s
Message
B Y R A P H A E L YA U , C H A I R
As winter settles in landlords have ensured their
buildings are ready for the cold season and have take
measures to ensure that boilers, furnaces, and hot
water tanks are readied for the frigid Edmonton challenges. The joy of the holiday season comes with the
expense of some planning and preparation.
In November alone, multifamily starts in Edmonton (which include semi-detached developments)
reached 1,312. This is up from 860 during November
last year and 558 during November 2013. Year-todate multifamily housing starts are up 53% from
the same period last year. However, new construction is expected to slow thereby ensuring inventory
levels remain manageable. The decreasing price
of oil remains a concern and industry is on course
for a slowdown. As this update is being written, the
Canadian dollar has sunk below 73 cents US and a
barrel of crude costs less than $37. The newly elected
Liberal federal government is starting to implement
campaign promises and changes, and the Finance
Minister just announced the minimum down payment
on residential mortgages over $500,000 is now 10%
to qualify for CMHC insurance.
Edmonton saw inflation creep downward in September and October to 1.6% and 1.5% respectively.
But even with the reduction Edmonton’s inflation
rate remains above the national average. With rental
vacancy rates beginning to rise, rents for accommodation in the Edmonton area have stabilized, and we
are beginning to see incentives and rental reductions
offered in certain areas. These circumstances will
take further pressure off the housing cost component
of near-term inflation rates. In the second quarter of
2015, there was a large drop in the price of water,
fuel and electricity; however, that gradually reversed
over the third quarter and continued to increase
throughout October. During the remainder of the
fourth quarter, housing costs in Edmonton are likely to
remain at their current levels without major swings.
during November. Overall, positions in the greater Edmonton area has increased by more than 28,000 during the past 12 months, which is just under a quarter
of all net new jobs generated in Canada over that
same period. Annual employment growth in the Edmonton area in November was 3.8% which is slightly
more than five times the national average of 0.7%.
During the same period, the province’s employment
fell by 0.1%. Even with November’s encouraging job
numbers, the Edmonton area’s unemployment rate
rose marginally from 6.0% to 6.1% between October
and November as the region’s labour force continued
to expand. The comparable rate for our neighbours
down south in Calgary was 6.9%.
The net job loss for the province was just under
15,000 jobs. A sharp reduction in part-time employment overwhelmed a small increase in full-time jobs.
The primary sources of job losses in Alberta over the
past year were the energy, manufacturing sectors
and professional services. Alberta’s unemployment
increased from 6.6% to 7.0% between October and
November, which is the highest rate since April 2010.
single-family and multi-family housing. New residential housing is expected to slow down until oil prices
start trending upward and net migration increases
again. Edmonton’s construction sector is expected
to hold up well for the remainder of 2015 due to
ongoing projects. However, activity will decrease in
2016 reflecting changing economic conditions such
as slower economic growth in the province, slower
population growth due to fewer job opportunities and
more stable income levels. This anticipated decline
will be driven in large part by waning multi-family
residential construction.
We expect pricing on multi-family properties to
stabilize this winter with capitalization rates hovering
around 6.25-6.75%. Financing continues to be desirable and interest rates remain favourably low.
Raphael M.H. Yau
Partner, Multi-family & Investment Sales
Cushman & Wakefield Edmonton
Source: CMHC, the City of Edmonton
The decline in oil prices and lower net migration to
Edmonton has resulted in decreased demand for
Wishing Our Members
a Merry Christmas
and Happy New Year!
Even after seven consecutive months of employment
growth, the Edmonton area saw a gain of almost
7,000 jobs in November. Strong gains in part-time
employment were able to offset a modest reduction
in full-time jobs. Employment levels were weakest
in construction, professional services and public
administration, while retail, logistics and educational
services experienced solid net gains in employment
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Renting Our Your Condominium:
Six Facts You Need to Know
BY JUDY FENG
Did you know that both the Residential Tenancies
Act (RTA) and Condominium Property Act (CPA) apply
to condominium rentals? As a landlord and owner
of a condominium unit, you must be familiar with
your responsibilities under both pieces of legislation.
In Alberta, the RTA is the law that applies to most
landlord and tenant situations. It outlines specific rules
that both landlords and tenants must follow. The CPA
contains additional rules that apply to the rental of
condominiums. Here are six key things you need to
know before you rent out your unit.
Fact #1: You must inform your condominium
corporation
If you have found a tenant and are ready to rent your
unit, you must provide the following information to
your condominium corporation, in writing, within 20
days of the tenancy starting:
• Your intention to rent out your unit;
• An address where you can be personally served with
documents;
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• How much rent you will be charging; and
• The name of the tenant renting the unit.
If you stop renting your unit, you must provide notice
to your condominium corporation within 20 days of the
tenancy ending.
Fact #2: The condominium corporation can ask you
for a security deposit
If you are renting your unit, the condominium
corporation has the right to ask you for a security
deposit to cover any damage that may be caused
by your tenant to the common property. The security
deposit can be a maximum of one month’s rent. Note:
this is not the same as the security deposit you can
ask for from your tenant!
you cannot use this money to pay the condominium
corporation’s security deposit. You must put the
tenant’s security deposit money into a trust account
within 2 banking days of receiving it and keep records
of the security deposit for at least 3 years. A security
deposit cannot be more than what you are charging for
one month’s rent. For more information about security
deposits, visit our Laws for Landlords and Tenants in
Alberta website: www.landlordandtenant.org
Fact #4: You can only deduct money from a
security deposit for damage if you have completed
move-in and move-out inspection reports
Fact #3: Your tenant’s security deposit cannot
be used to pay the condominium corporation’s
security deposit
Under the RTA, you must complete a written property
inspection within one week of a tenant moving in and
out of your unit. Once an inspection is completed, you
must immediately give the tenant a copy of the written
inspection report. As best practice, take photos at both
inspections in case there is a dispute in the future.
You can ask your tenant for a security deposit but
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7
Top 4 Tenants Insurance Myths that
Tenants Believe
B Y M I K E B E AT O N
At ZipSure.ca we work with Residential Realty
operators daily to get their properties set-up in our
system, so that their tenants can be assured that they
are covered in the event of an incident. In doing so, we
hear a lot of concerns directly from tenants, whom are
reluctant to pay for tenants insurance (especially when
it is not required in their lease). Many renters feel that
acquiring Tenants Insurance is costly and unnecessary,
even though the price of Tenants Insurance premiums
per month can be as low as ordering a pizza.
If you are put in the position of dealing with your
tenants about their tenants insurance issues, here
are some common myths that might come up in your
conversation and ways to dispel them:
Tenants Insurance Myth #1:
“As a renter my Residential Realty Operator will
cover my property damages”
The insurance policies that are required by the
Residential Realty operator are designed to protect
them, not the tenants. This results in coverage
extending only to the building (the actual structure)
and not the contents inside or any of their tenants
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belongings. Even if your tenants are using appliances
that you own (such as a fridge), if said fridge breaks
down and spoils all of their food, the tenant is liable to
replace it, not you.
It is important that your tenants understand where
their liability begins and ends. In our experience,
requiring your tenants to carry tenants insurance
seems to be the best (and easiest) way of mitigating
risk.
Tenants Insurance Myth #2:
“I don’t own enough things to bother with tenants
insurance”
Many people have this idea that tenants insurance is
beneficial for people whom have expensive tastes –
those with large jewelry collections, pricey furniture, or
rare record collections.
Not so.
Unless your tenants have went through the rigorous
exercise of actually pricing out everything that they
own, it’s a safe bet that almost 100% of your tenants
would underestimate the value of their belongings.
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A great thought exercise for tenants would be to
imagine a month with regular spending patterns,
and then estimate about how much extra income is
left over at the end of the month. The tenant should
then estimate the rough value of just their clothes,
their electronics, and their furniture, and do the math
to figure out how long it would take, with regular
spending patterns, to replace all of these items. It
can be eye opening for tenants to realize how many
months (or most times, years) it would take for them
to replace all of these items. In our experience, it’s not
unusual to see a two bedroom apartment with over
$25,000 worth of items.
Tenants Insurance Myth #3:
“Renters insurance only covers my personal
belongings”
Although a majority of claims through Tenants
Insurance are for incidents regarding personal
belongings, there are other very important ways that
carrying insurance can help your tenants mitigate their
risk.
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Continued From 7
You must keep copies of the inspection reports for at
least 3 years after a tenancy ends. If the inspection
reports are not completed, you will not be entitled to
take money from the security deposit to cover damage
to the unit.
bylaws so that you can properly advise the tenant
about the condominium’s rules. You should also ensure
that the lease agreement accurately reflects the
bylaws.
paid. If you are renting out your unit and condominium
contributions go unpaid, the condominium corporation
can require your tenant to pay rent to the corporation
instead of you to cover the unpaid contributions.
Fact #5: Tenants have to follow your condo bylaws
Fact #6: Unpaid condo contributions can be taken
from your tenant’s rent
To learn more about renting out your condominium,
visit our new website www.condolawalberta.ca
Tenants are required to follow the condominium’s
bylaws during their tenancy and they should have
access to a copy of the bylaws. As a responsible
landlord, you should familiarize yourself with the
The lease should clearly state whether or not your
tenant is responsible for paying the condominium
contributions (also known as condo fees). You can
get into serious trouble if your contributions are not
Judy Feng, BCom, JD, is a staff lawyer at the Centre for Public Legal
Education Alberta and can be reached at judyfeng@cplea.ca.
Continued From 8
Accidents do happen, and sometimes those accidents
not only affect the tenant, but the tenants around them.
Carrying Tenants Insurance will help protect the tenant
in those situations. For example, if their sink over
flows and water leaks into the apartment below, any
damages occurring to their neighbor would be covered
by the tenants policy (up to their liability limits).
This coverage can also help cover any legal or medical
expenses associated with their apartment. If someone
were to hurt themselves at your tenant’s home, their
Tenants Insurance would help cover the costs of any
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medical treatment or legal expenses should the injured
decide to sue.
portal for tenants insurance, offers insurance rates as
low as $9/month, which hardly breaks the bank.
Tenants Insurance Myth #4:
If your tenants were to compare this minor monthly
expense to the vast expense of replacing everything
they own, they would realize that it is in their best
interest to carry tenants insurance.
“Tenants insurance is way too expensive”
Tenants Insurance being expensive is probably the
easiest myth to dispel. Compared to other types of
‘required’ insurances (like auto or home), adding
tenants insurance to their monthly expenses shouldn’t
increase them by much.
Mike Beaton is a National Marketing Specialist for A.P.B Reid Insurance
and are Proud ARLA Preferred Service Members.
For further information please call Mike at 902-434-4642.
Companies such as ZipSure.ca, an online self-service
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9
Apartment Vacancies on the
Rise in Edmonton
B Y R I C H A R D G O AT C H E R
Rental apartment vacancies have increased in the
past year across Greater Edmonton in response to
higher levels of new supply and reduced demand
associated with the province-wide economic
slowdown. Property managers should expect further
upward pressure on vacancies in the year ahead.
According to CMHC’s latest rental market survey,
the apartment vacancy rate in the Edmonton CMA
increased to 4.2% in October of this year compared
with 1.7% a year prior. As shown below, rental
apartment vacancies this fall were at their highest
level since 2010. Considering the slowdown the
province’s in-migration and weaker job creation
across the region, combined with an expected rise
in apartment completions in the months ahead,
apartment vacancies in Edmonton should head higher
this spring.
With two months remaining, 2015 was already the
second-best year on record for multi-family starts
in Metro Edmonton. These new units will provide
additional competition for existing rental buildings.
Apartment units under construction at the end of
October were up by 18% from a year prior to 8,189
units. Of these, 2,810 units were identified by CMHC
as purpose-built rental units and another 5,379 units
were destined for the condominium market. As CMHC
noted in their 2014 Edmonton Rental Market Report,
approximately one-third of Edmonton’s condominium
stock is typically owned by investors and competing
in the secondary rental market. As such, close to
1,800 of the new condo apartment units currently
under construction will likely become rental
properties upon completion.
The average rent for a typical two-bedroom
apartment in Metro Edmonton increased by 2.6%
between October 2014 and October 2015 to $1,259.
This compares with a 7.5% increase during the 12
month period ending October 2014. Higher vacancies
are expected to put a damper on rent increases in
2016 as landlords seek to reduce turnovers and
maintain net operating incomes.
Richard Goatcher is an Economic Analyst for CHBA – Alberta.
He is also the owner of Goatcher Consulting, which provides
a wide variety of economic and market analysis services to
housing industry clients in Alberta.
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Security Deposit Intereset Rates 2016
RESIDENTIAL TENANCIES ACT
MOBILE HOME SITES TENANCIES ACT
The rate of interest to be paid on tenant security deposits by landlords, effective January 1,
2016, is 0%. Landlords must pay interest to their tenants annually at the end of each tenancy
year, unless both parties agree otherwise, in which case the interest must be compounded
annually.
By an Order in Council passed on September 8, 2004, the Security Deposit Interest Rate
Regulation includes a permanent formula setting the yearly interest rate payable on security
deposits. The annual rate is 3% below the rate of interest that is in effect on November 1 of
the previous year for cashable one-year guaranteed investment certificates held or offered by
Alberta Treasury Branches Financial (ATB Financial). ATB Financial’s rate for cashable one-year
guaranteed investment certificates on November 1, 2015 was 0.65%.
Security Deposit Interest Rate Calculator
Landlords and tenants can use the security deposit interest calculator to determine the amount
of interest that is owed based on the regulated interest rates. The calculator can be found by
visiting Service Alberta’s website at http://www.servicealberta.gov.ab.ca/interest-chart.cfm
For more information, contact Service Alberta’s Consumer Contact Centre in Edmonton at (780)
427-4088 or toll free in Alberta at 1-877-427-4088.
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Ten Ways to Protect Your Business
From Fraud
B Y R O S A N N E WA LT E R S
According to the Association of Certified Fraud
Examiners (ACFE), the typical organization loses about
5% of its annual revenues to fraud. The average fraud
scheme costs an organization approximately $150,000
and over 50% of cases have no recovery of losses.
Rosanne Walters, Partner of BDO’s Forensic &
Investigative Services, offers these tips:
1. Know your employees:
• Perform proper screening of your employees,
including criminal checks and due diligence
regarding the employee’s background.
• Look into gaps in employment and anything that
does not add up in a resume.
• A two-year gap in a resume could mean jail time,
as was the case with a company that recently
discovered their employee had been imprisoned for
embezzlement six years prior to being employed.
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It was a difficult ethical decision for the employer
once this information came to light because the gap
existed on the resume but the employer never asked
about it and did not perform a criminal background
check.
• It is not uncommon for resumes to contain false
information. Outside services perform resume
checks for a very reasonable fee.
2. Protect your information:
• Protect your business from cybercrime with firewalls,
anti-virus programs, passwords and controls for
employees working outside the office on personal
computers. Remember that information can be
removed easily from office computers by portable
memory drives and using email.
• Protect information shared on social media sites.
Train employees about the dangers of sharing
personal information that can lead to fraud.
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• Be aware of information stored on the hard drives of
photocopier and cash registers. Purge information
on a regular basis or save offsite in a secure
environment.
• Recently a construction company lost all its
data when the office manager resigned. This
confidential information included bidding processes,
financial information, pricing strategies and
costing information and was removed by email to
the employee’s personal email account, prior to
resigning. After resigning, it was discovered that the
employee went on to join a competitor.
3. Start a confidential reporting system:
• Let others do the watching and reporting by starting
a confidential whistleblower program.
• According to the ACFE, 42% of fraud is detected by
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tips from employees, customers and suppliers.
• Obtain bids for services as often as possible.
• Most employees intuitively know when behavior
appears suspicious, but they usually have no
confidential method of reporting the situation.
• For example, a real estate company paid for painting
services, but the services were performed elsewhere
and billed fraudulently to the company.
• Confidential reporting can be expedited as easily
as setting up a separate mailbox on your phone
system for complaints, followed by advertising and
encouraging reporting later on.
5. Be aware of corruption schemes:
• A complaint from a tenant recently saved a property
management company from a property manager
who accepted bribes to accept tenants that would
otherwise have not been considered appropriate.
4. Protect your business from fraudulent third
parties:
• Perform due diligence of third parties involved
in your business, including property managers,
contractors, sub-contractors, venture partners,
suppliers and consultants.
• Find out who these people are and whether their
business is reputable and legitimate.
• Is the third party real? Are you paying for services
that either don’t exist or for which you are overpaying?
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• According to the ACFE, the most common schemes
in Canada involve some kind of corruption, like
accepting bribes and/or kickbacks.
• Kickbacks can occur when you unwittingly overpay a
supplier and the supplier splits the overpayment with
someone you trust.
• Be aware of what services are being performed
and the market rate for these services. Kick-back
schemes happen easier when you are over-paying
for services.
• Be aware of relationships between third parties and
insiders.
• One company paid for the services of an electrician
who was overcharging for work performed then
splitting the difference with the property manager for
a sizable kickback.
6. Look at your bank statements:
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• Many embezzlement schemes occur when an insider
has access to a bank account or cheques.
• Cheque tampering schemes are very costly and can
be as simple as altering company cheques after they
have been signed. Review all cheques when they
come back from the bank to determine whether they
match the originals.
• Online payments of personal bills by an insider is
a common scheme as well. Various online retail
payments are a common scheme performed by
inside employees. Regularly check your bank
balance for discrepancies.
• One situation involved a bookkeeper who submitted
a cheque for signature for a legitimate supplier. Once
the cheque was signed, the bookkeeper destroyed
the cheque and recreated one for the same amount,
only this cheque paid her personal VISA bill; the
funds never made it to the supplier.
7. Scrutinize expense reports:
• Expense account fraud is very common in all
businesses.
• Expense reports should be supported by original
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receipts before submitting for review and approval.
• Some employees submit personal expenses
and even multiple reimbursements of the same
expenses, without incident.
8. Know what assets you are buying and how they
are being used:
• Assets sometimes grow legs and walk out the
company front door due to theft or by items deemed
to be borrowed.
• Keep track of assets at all times.
• Install video cameras wherever possible.
• One company work site housed heavy equipment
which was used regularly by the company’s
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manager. The company manager personally saved
himself the cost of buying, insuring and maintaining
his own equipment because he fraudulently used his
employer’s.
one in place to oversee and/or perform employee
exit interviews.
10. Establish a good code of conduct:
9. Use a payroll service and check that employees
being paid are real people:
• Establish a good code of conduct for your employees
and third parties.
• Payroll schemes can be a big threat to any
organization.
• Set out your expectations regarding what is and is
not acceptable behaviour.
• Employees can overcharge for hours they did not
work or, even worse, a company that is not paying
attention may be paying for employees who are not
working at all.
• Review these policies with your employees on a
regular basis, including annual sign-offs to be placed
in an employee’s personnel file.
• For example, a business continued to pay for a
departed employee’s salary because there was no
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• Obtain fidelity insurance for employee fraud and
theft to cover the unexpected.
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NOTICE: Portable Fire
Extinguisher Servicing
A L B E RTA G O V E R N M E N T
Concern:
Portable Fire Extinguishers sold and serviced in
Alberta have been required to be listed and labelled
as meeting National Standards of Canada since the
publication of the original Alberta Fire Code (AFC).
Portable Fire Extinguishers meeting these standards,
and therefore acceptable for sale, use and servicing in
Alberta will comply with a-e:
a) Have metric measures on the label and may have
imperial equivalents,
Extinguisher servicing companies and property owners
have come forward with concerns that many portable
fire extinguishers found during required inspections
and maintenance are not listed and labelled for use in
Canada.
b) All labels will be bi-lingual in English/French (may
be tri-lingual and include Spanish),
Background:
d) Exhibit the mark of a Certification Body as meeting
one of the referenced National Standards
Prior to the publication of the AFC 2014 the code
user was directed to NFPA 10 “Standard for Portable
Fire Extinguishers” Sentence 1.3.1(2) to identify the
standards. CAN/ULC Standards are designated as
the National Standards of Canada to be utilised when
manufacturing and supplying portable extinguishers
for use in Canada. Direct reference to these standards
is made in the AFC 2014 in Sentence 2.1.5.1.(3).
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c) Will indicate which CAN/ULC Standard the portable
extinguisher meets (e.g. CAN/ULC S504),
UL (as a Canadian Certification Body)
has listed and labelled the extinguisher to the specific
National Standard of Canada, or
b. Intertek/Warnock-Hersey which indicates that this
Canadian Certification body has listed
and labelled the extinguisher to the specific national
Standard of Canada.
Neither the cUL or WH marks will be found on new
portable fire extinguishers.
e) Other marks which MAY be found on older portable
fire extinguishers acceptable for usage in Alberta
include:
Portable fire extinguishers which exhibit only a UL
label (without the small “c” at the eight o’clock
position) are not acceptable for sale, use or allowed to
be serviced in Alberta. Special dispensation is allowed
for Certified Fire Extinguisher shops to “refill only”
vehicle fire extinguishers that have been discharged
in an emergency situation from truckers or other
a. Underwriters Laboratories (UL) which indicates that
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(CAN/ULC). This mark will most typically be that of
ULC (Underwriters Laboratories of Canada):
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travellers from the United States.
We have been made aware that portable fire
extinguishers which are not listed and labeled for
use in Canada, manufactured after January 1, 1986,
have been sold and continue to be serviced in Alberta
which is a contravention of Alberta Fire Code 2014.
Extinguishers manufactured prior to January 1, 1986
were not required by NFPA 10 to be labeled. Labels
are not to be applied to these or any other portable or
wheeled extinguishers.
National Standards of Canada for portable fire
extinguishers, ULC, are now harmonized with the
North American UL requirements. There are, however,
differences between the standards. The UL mark
alone, without the small “c” at the eight o’clock
position, means that the product complies with US
requirements only.
In addition, CAN/ULC-S532-07 “Standard for
the Regulation of the Servicing of Portable Fire
Extinguishers” has a requirement under 9.1 “A
portable fire extinguisher shall not be recharged
unless it bears a certification mark attesting to its
certification by a nationally recognized agency and
approved by the authority having jurisdiction or other
organization administering these requirements”.
Therefore, the presence of the ULC listing mark on
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a portable fire extinguisher (or the other two noted
above in very few instances) is the only evidence
that the portable fire extinguisher complied with
the National Standard of Canada when it was
manufactured.
Supply and service companies who have sold and/
or serviced non-compliant extinguishers in Alberta
have contravened the AFC and the terms of their
mandatory certification as a portable fire extinguisher
shop in Alberta. Some certification bodies inspecting
extinguisher shops may not have made this clear
during inspections in previous years.
It is also illegal for a fire extinguisher service company
to apply a label or Certification Body’s “mark” to
a non-Canadian extinguisher, or any extinguisher,
other than as part of the required label indicating 6
year maintenance and/or hydro-testing by a certified
(listed) service company or as part of a ULC and
Original Equipment Manufacturer (OEM) formally
approved Refurbishing Program. Only certain ANSUL
portable extinguishers, refurbished by either CenturyVallen or Tyco Fire and Security, are covered by this
program. Any other person or shop applying such
labels is subject to prosecution under the Safety
Codes Act and the fraud provisions of the Criminal
Code of Canada.
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Actions to be taken:
To rectify this issue the following actions are to be
taken:
All non-compliant (non-Canadian labeled) portable fire
extinguishers in Alberta must be taken out of service
and rendered inoperable by December 31, 2021 at the
latest. The recommended time of this removal from
service is at the next five or six year tear down and/or
hydro-test and maintenance.
In addition if a non-compliant fire extinguisher is
discharged for any reason this should also trigger the
replacement of the extinguisher as it will not be able
to be refilled due to only having a UL label.
Taking this action over a reasonable period of time
will reduce the financial implications for companies
by enabling them to budget for the replacement of
portable fire extinguishers. Companies to come into
compliance with the AFC 2014 and remove all UL only
certified fire extinguishers from service six years from
the date of this advisory.
The bodies certifying portable fire extinguisher shops
in Alberta to CAN/ULC-S532 (ULC and Intertek) as
per the AFC 2014 will be asked to ensure the shops
understand their obligations under the Standard and
the AFC 2014.
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