Episode 17: Tenant Terminology Part 1
Renting can be very confusing and some terms are interchanged (and they shouldn't be). In today's episode, we review the most common terms a tenant can encounter in the renting world. We define them, untangle some of the confusion, and also explain how to figure out where to find more terms (or acronyms) that you find confusing! When renting, education is the key! Start with tenant terminology!
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Full Episode Transcription
Welcome to My Life As A Landlord, where we untangle all things housing and educate the curious. If
you're looking for some entertainment with some honest, awkward conversations, you've come to the
right show. I'm your host, Dr. Jennifer Salisbury. This is my life as a landlord. Welcome to it. Hello
there. Welcome to this week's episode of my Life as a Landlord. I am Dr. Jen. Thank you so much for
allowing me to educate you on tenant terminology. Part one. This week's content bucket is all from the
tenant's perspective. And many of you know that renting can be very confusing and there are terms very
often that can get used. And who knows what these proper definitions are? So I've just picked about ten 1s
terms that are in typical leases across North America, both Canada and the US. And we're going to define
them, we're going to define some of the perspectives, some of the different aspects of it. Many of you
who've been listening to my podcast know that I do three points of action sorry, three points of content
and then a call to action. Well, I can't really do that in this episode because we're defining terminology.
So we're going to define these terms and then I'm going to give you a list of explanations before the call
to action. So this is part one. I'm very new in the podcasting world, and so I'm doing part one. And the
main reason I am doing part one is these are the most common and potentially confusing terms for me
from where I sit. And 1s there are very likely many that you might hear as well that say, hey, wait a
minute, Jen, I want this. Know that if you want something to find, you just need to tell me. We can put a
whole podcast together or have a conversation on Facebook or LinkedIn, wherever. You can find me
very easily on social media. And I really enjoy helping to educate as a part of this podcast. And that's the
goal for today is tenant terminology, part one. So let's jump right into it. Let's talk about what is proper
notice. Now, proper notice can be used in two times in a tenant life, let's say. So the first one is when a
landlord wants to enter your unit. This term proper notice. The landlord must give you proper notice to
enter. Now, this can be geographic dependent. Most of the time, your provincial or your state housing
code will be very specific on how you need to give proper notice, what time in advance you need to give
proper notice, and you must have a reason. You can't just say, hey, tenant. You can't text them ten
minutes before you're going to be there, hey, I'm coming in. It doesn't work like that. That's not proper
notice. Proper notice is very geographic dependent, and you must deliver that proper notice as a landlord
in a very specific way. So as a tenant, if your landlord is not giving you proper notice correctly, you need
to read your tenant code or your housing act, whatever that is, for your state or your province, so that,
you'll know, you go, to some of these proper notice places and it says, okay, it must be written. And you
must give notice 48 hours or more in advance. And it must be posted. Okay? If you didn't do all three of
those things, you didn't give proper notice. Now, as a tenant, there's a second aspect when you give
proper notice, and that is when you're going to depart the unit and exit the lease, you must give proper
notice to your landlord. Now, this is very time dependent, and it is also, again, geographic dependent,
because your housing act, your local tenancy code, will tell you when you depart, you must give proper
notice. For example, in Hawaii, it is 30 days, 30 calendar days. So if you give notice on March 6 that you
are leaving in 30 days, you can't just say, March 6, I'm leaving April 1. That's not considered proper
notice, but March 6. And then 30 days, of course, I pick a month without 31 days in it. So 30 days after
that, it'd be April 4, or whatever it is. That's the earliest, technically, that you have given proper notice.
But in British Columbia, it's very different. You must give one full calendar month proper notice that
you're going to depart. For example, if someone says March 6, they're going to leave March 31, that's not
proper notice. One full calendar month means if they give notice on March 6 that they're going to depart
April 30, they must give one full calendar month. So this is very geographic dependent. You've got to
know what proper notice means for both entering your unit and exiting the lease. 1s Okay, let's go to the
next term. Normal wear and tear. Ha. I love this term and I've asked it at several landlord forums and
many people avoid the answer. This is a very weird term and it can be up to big interpretation. And so
you've got to really understand what this means. But normal wear and tear, what does that actually mean?
The most common definition that I have found is damage to property resulting from ordinary use over
time. I got to be careful though, because if you say damage to property resulting from ordinary use over
time, that word damage, you got to be real careful. So let me pull up. I've googled some different
definitions. So, best example of normal wear and tear faded paint around the unit, loose wallpaper,
scuffed wood floors, dirt build up on windows. This is normal wear and tear from use. However, if
you've got sledgehammers in the walls, punch marks in the doors, that is destructive. That's not normal
wear and tear, right? That is not normal wear and tear at all. And the most. 1s Destruction that a tenant
can do is smoke in the unit. That is straight up intentional, and it's malicious and it can be negligent
considered abuse and carelessness. That is not normal wear and tear smoking damage in the unit.
Tenants, if you're smoking in your unit, you are damaging the home itself. To recover from that is an
amazing amount of work because that smoke is infiltrating into the paint, it's infiltrating into the
machines. If you've got either a furnace or a heat exchanger or a heat pump on the light fixtures, the
nicotine gets everywhere. It is really destructive. So normal wear and tear is not damage. It is not
malicious, it's not intentional. It is just that normal wear and tear. Let me tell you a couple more things I
looked up under the state of Washington. State of Washington is defining normal wear and tear. Again,
damage that is expected when a rental unit is used in a normal way, such as they've got some examples
here. Gently worn carpets or faded walls. 1s But damage due to destruction caused by abusive or
negligent use of the rental. Liked ripped carpets, heavily stained walls, burned countertops. That's not
wear and tear. Okay, so they've got a couple more examples. Lightly scratched glass, 1s lightly dirtied
grout, not cake with dirt grout. Loose door handles, stained bath fixtures. I get it. So that's normal wear
and tear, and it's a tough one. I've asked this question 1s as an audience member in several forums, and
people really shy away from what normal wear and tear is. But I can tell you that my standard this is me
as Jen, the landlord. My standard is 1 hour of repair for every year that they were there. So if they were
there for three years, there should be about 3 hours worth of recovery. And then if there's more than that,
let's say they've really scratched the floor. They had a dining room set that really scratched the floor, and
now the floor has to be replaced. That is not normal wear and tear. That is considered. Damage at this
point can be taken out of the deposits. Speaking of deposits, let's talk about some deposits as
terminologies. 1s Security deposit. Okay? I've got to define a security deposit versus damage deposit.
This is very important. Nearly every province and state that I could find has security deposit which
secures the unit to the tenant. The security deposit is the tenant's money. It is not the landlord's money.
The landlord holds it for security just in case. Right? And that includes if the tenant does not give proper
notice, you could potentially take the remainder of the days out of the security deposit. Again, that goes
back to your geographic location and your specific housing and tenant laws. Make sure you know that.
And then at the end of the lease, depending on where you are, that security deposit gets returned to the
tenant, and it could get returned with interest. Remember, you as a landlord are holding this money the
tenants are giving you, but you are the bank. And very specifically, every region, every state, every
province will tell you interest bearing amounts. And it's usually per year. They'll say this calendar year,
any interest on a tenant's deposit is usually very low. It's usually one or 2%. But let's say that tenant was
with you for ten years. If it's one or 2%, then it's a compounding thing per year. And so let's say you sell
the house with this tenant in it. When the deposit transfers, that deposit will transfer to the next landlord
with the interest, because the interest is also the tenant's money, not just the initial principal. Okay? No,
that was a lot of words, but that's security deposit secures the unit to the tenant. It's the tenant's money.
Let's talk about damage deposit, okay? A lot of people just use the words damage deposit. 1s As security
deposit. That's what they mean it. But you got to be careful here because 1s admittedly, I have not gone
through all 50 states, all ten provinces and three territories in Canada. I have not gone through all of them
yet. I am working my way through it. And nowhere have I seen the words exactly that says damage
deposit on their own. British Columbia has pet damage deposit. Pet damage deposit, meaning if you have
a pet, 1s you can request and the tenant must pay up to a half a month's rent in addition to the security
deposit, which is also a half a month's rent as a deposit. Again, the same thing applies that this is the
tenant's money, but this is damage due to pets. If they don't have a pet, you can't charge them a pet
damage deposit. Unfortunately, as a tenant and largely in the rental world, security deposit and damage
deposit, those terms get intermixed and they're not they are not the same thing. And I also looked back
and I really did some googling and saying, does anybody use 1s that term damage deposit? And I could
not find any. If you in your local area, use a damage deposit. If you use those exact words as a line item
that you can charge a tenant a deposit amount, please message me, please email me and let me know,
because I have not seen this anywhere yet. It's always a security deposit or something to do with, like
pets, like I mentioned. But with a security deposit, you could potentially collect damages, repairs from
damages that exceed normal wear and tear, but you've got to do it in a justified manner out of that
security deposit. Potentially, if the tenant did not give proper notice, it could potentially be used to collect
unpaid rent. And you want to make sure that when you return the deposit or a portion of the deposit, that
you do it properly because. If you do not do it properly, there is usually a very big fine. Sometimes it's
two or three times the amount of the deposit. If it is either not returned in a timely manner or it's not
returned with proper justification, you could very well end up in small claims court or in arbitration
because of this deposit. So where do you find all this? You guessed it. You know what I'm about to say.
Google your local, state or province with housing act or tenancy code something, know your local rules,
and it will say directly in there. If you're going to withhold a portion of a tenant security deposit, you
must do this, this and this. Meaning you must have it in writing, you must have the invoices paid, you
must have pictures of it. Most of the time the court or arbitration, whichever applies to you in your area,
will require both the condition inspection upon, move in and move out. If you do not have that landlords,
you are setting yourself up for failure. Tenants, you are not justifying that you deserve your entire
security deposit back. So be careful when you're using the term security deposit, pet damage deposit, and
withholding other amounts from security deposit. You've got to be real careful on how you do this. Okay,
let's talk a little bit about repairs in my lease. Addendum I have explanation for the repairs, but also in
when we're talking about British Columbia. British Columbia is very specific in their 1s residential
Tenancy Act on what is considered different levels of repairs. So let me just cut to the chase. I'll tell you
what the repairs are from where we sit, urgent or emergency, meaning fire, flooding, smoke, something is
happening that's not necessarily a repair, that is a safety item, like imminent threat to both the tenant and
the tenant, the other units around that tenant, meaning the stove is on fire. There is no proper notice to
enter because it is a life and safety issue. That is an emergency. That is not something you're going to get
proper notice. 1s So let's talk about a critical, critical repair. A critical repair would be something that can
cause an emergency. Here's a couple of examples. A range burner that will not turn off. This has
happened to me. The range burner will not turn off. There was something wrong with the switch in the
range, and the burner was getting red hot and staying that way, and the burner was off. Bizarre. That is
absolute. Oh, my goodness. Drop everything and come running. The other things that could be a critical
safety item is a leaking sink, meaning it's actively leaking, like starting to flood, starting to cause damage,
starting to puddle on the floor. Water leaking is one of the worst things that can happen as a landlord. So
as a tenant, if you've got a leaking sink, even if it's a drip, a drip may not necessarily be a drop everything
item and come running. But you still need to let either your landlord or your property manager know that
if you've got a water item that is absolutely critical. A couple of other things if your lock on your door
has failed. 1s That is a drop everything and come running. Critical repair. Because it's a safety item, you
can no longer either open the door or lock the door. We've actually had tenants where the lock failed
while they were in the unit and had to basically break down the door to get them out and then repair the
deadbolt. Thankfully, the door was not wrecked. But some of the most bizarre things can happen when
you're talking about locks. But anything regarding the safety of the unit itself, that is a critical repair item.
One of the other items that is something that we take very seriously is if a fridge fails. If a fridge fails,
now you've got a health and safety issue. You've got potentially an entire fridge full of groceries that are
going to fail, especially after the second day that fridge will be gone. And so almost always somebody
somewhere in my realm, wherever I've got my rentals, we have a spare fridge. And we do it strategically
so that in the event somebody in our landlord network has a failed fridge, we can switch it out
immediately. That fridge has got to be replaced, even if you have a temporary one while you buy a new
one. Let's say you've got to have a spare fridge to at least help. But those are examples of critical items.
They are imminent safety items that you're going to either get sick or cause a fire or cause a flood. That's
a critical repair. Okay, non critical repairs. Non critical repairs are not safety issues. They are convenient
repairs. Things like the towel bar fell down, the screen is broken, the handle on the door of the bedroom
is loose. Those are not items that are going to impact the health, welfare and safety of the entire unit. So
that is something that we will schedule. We'll schedule on a rotating basis and have the handyman come
by and help. But again, you can see the different levels of repairs urgent or emergent critical, which is the
safety related and non critical, which is not safety. That's the different repairs that we've got. Okay, got a
couple more terminology terms here. Quiet enjoyment, something you hear a lot. 1s Quiet enjoyment. I
looked up the BC Residential Tenancy Act. The tenants implied right to use and enjoy their unit and the
common areas without obstruction or intrusion from other residents, landlords or others. So quiet
enjoyment, quite frankly, they get what they pay for. You're paying the rent. You want to be able to come
and go as you please without being interacted with the landlord, without proper notice with other
residents. We've had this happen where one tenant will continually basically bother another tenant, and
it's not fair that's impeding on quiet enjoyment or they'll change their behavior or others. And that
includes salespeople, that includes handyman, that includes a bunch of others. But quiet enjoyment is part
of what the tenant is buying when they pay their rent every month. Okay, two more subletting. Subletting
is renting a room to a third party, and typically it's not on a long term lease, so let me go through that. So
if I've got a two bedroom unit that, let's say two roommates are renting and one of the roommates leaves
and they want to sublet to another person, and I permit that, but. 1s The incoming potential tenant must
be fully qualified, just like the first two were. And I require two simple things. One, I want one rent
payment. It's not each pays a half that doesn't work because then you get well, I paid the rent, the
roommate didn't pay the rent. You can't evict us both. Oh, yes, I can. You sign one lease, one payment.
Everybody pull their money and send me one payment or deposit into the bank for us in one payment.
Also one deposit. I do not play the I give half deposit back. I don't do that. Subletting is you've got to
be fully qualified. And especially with roommates, you have got to make sure that you've got one
payment, one deposit, and that they're fully qualified. And then what we'll do is if there's a change of the
tenants on that lease, we'll remove a being, which will be the outgoing roommate, and then we'll add a
being. Once they're qualified and both people are the same as the original lease, they're still responsible
for the same things as the original lease. Okay, the next thing, the last term, I'm going to define here. And
then we'll put all the other terms that I didn't cover into part two. Feel free to mess message me if I've
missed one. Assigning the lease. So what happens is the departing tenant wants somebody to take over
the remainder of the lease 1s and it's usually during something has happened, like it's usually unforeseen
that the current tenant can't finish it. Like they've either gotten 1s maybe they had a family emergency,
maybe they've got a sick parent or something that just developed and they've got a depart and they want
to assign it to their buddy. I typically do not allow lease assignments unless there is just an extenuating
circumstance and we happen to know the entire situation. I typically will take just end the lease even if it
means I have to give them back their deposits. Sometimes that's the best option. But assigning the lease
just for the sake of finishing out the contract doesn't always work. I would rather take the unit back,
recover it if there's any normal wear and tear or any potential damage that needs to be recovered and then
rent it out. I also have an opportunity, I'll be honest, I also have an opportunity to up the rent amount if it
was an undermarket rent at that time. But assigning the lease, I usually only sign a one, sometimes a two
year lease. So assigning the lease for a few months doesn't make sense to me. So we would rather just
stop the lease, recover the unit and start again. Okay, here's my call to action to you. If you have got
terms that you are thinking going I wish Jen, you'd explain this or dive into this, or I wish I knew a little
bit more about that, please review your lease and your local housing act, tenancy, code, whatever it is. If
there are terminology, please message me, please let me know. And terms, especially acronyms, that's
another one is I'd love to do a podcast about alphabet soup the acronyms in some locations. I just have to
go, what on earth is that acronym? I don't know, but if you've got some either term or acronym that you
don't understand you want me to dive into more, please just let me know. For those of you who aren't
aware, when someone asks me a question or multiple questions, I will usually add that in the very next
queue for that content bucket and I'll do a podcast right away. So if you've got a topic, not necessarily
tenant terminology, but if you've got a topic that you want to hear more about, all you need to do is let
me know and I will put it in the queue. Next episode real Estate Developer I have no money but I want to
improve a property. How do you do a no money deal, especially if you're asset rich and cash poor? This
is a request from a local friend and I've already got it mapped out. So we'll see you next week as a real
estate developer. No money deals. Thanks so much for joining us. We'll see you next time. Thank you for
joining us this week. To view the complete show notes and all the links mentioned in today's episode,
visit our website@ www.mylifeasalandlord.com. If you're looking for educational resources for getting
into real estate investing, becoming a landlord, or even a better tenant, then I have a page on my website
to get you started looking for a solution to the pickle that you're in. I have suggestions for that too. You
can throw your situation on my Facebook group, My Life is a Landlord, and let our community help you
with solutions. Also, before you go, make sure you subscribe to the podcast so you can receive new
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podcast on, or you can sign up at www.MyLifeasalandlord.com. Thank you again for joining me, Dr.
Jennifer Salisbury, in this episode of My Life as a Landlord. I'll see you next time you.