1451 replies to this topic

[tjv]

But I don't think you can do a commercial lease in a residential area.

Also uncertain if it would be beneficial to the owner for the tenant to pay all the expenses as then they would have nothing to offset revenue.

Why not?  he is simply saying taking a commercial type lease where rent is $xx/sf plus triple net.  I have done modified triple net clauses where I take care of a certain list of things and the tenant responsibility is that list.

 

There is no law that says a residential contracts have to be a certain form is there?

 

What ever happened to the guy in James Bay who cranked his rents on his small apartment building saying he wasn't a social worker?

[sdwright.vic]

From the tenancy act:

"A commercial lease is a contract between a business tenant and landlord for use of commercial property to generate a profit through the sale of goods, services, or manufacture of a product. The premise is a business space not designed for sleeping and day-to-day living for the residential tenant."

As such you would not be able to do a commercial lease.

[tjv]

I just looked at the Residential Tenancy Act and did an electronic search for the word "commercial" and nothing came up

 

http://www.bclaws.ca...tatreg/02078_01

 

what is your source?

[tjv]

So what is the difference between offering a monthly rebate for maintaining the house and yard for the first year and getting a mail in rebate for say $20 for buying something at a store.  Its income both ways.

 

Is a rebate taxable?

 

Or how about this - sign a tenant agreement by March 10th and we are offering a sale, $1000 a month off rent for the first year.  Sign today!

 

If CRA wants to get involved then they have opened a mountain of problems because all sale discounts become taxable

Edited by tjv, 04 March 2018 - 12:57 PM.

[sdwright.vic]

This one:

https://www.estate-l..._commercial.htm

But this one also addresses it:

"What makes a commercial property lease different from a residential property lease?
A commercial lease is used by a tenant to rent space for a business while a residential lease is used by a tenant to rent a home or space to personally reside in. Commercial leases are typically viewed as contracts between knowledgeable business people. Consequently, less governmental protection is available for tenants of commercial property than tenants of residential property. Because the parties are knowledgeable business people, the underlying belief is that they should be able to negotiate the terms of the lease to their liking. Consistent with this idea, the parties of a commercial lease typically have greater bargaining power and more negotiating ability than the parties of a residential lease."

https://www.lawdepot...da/#question0_1

Edited by sdwright.vic, 04 March 2018 - 01:05 PM.

[sdwright.vic]

Is a rebate taxable?

Or how about this - sign a tenant agreement by March 10th and we are offering a sale, $1000 a month off rent for the first year. Sign today!

If CRA wants to get involved then they have opened a mountain of problems because all sale discounts become taxable

If a store offers a mail in rebate on something taxes is applied at the full value of the sale of the item.

Retail sales are not considered income because there is an exchange of money for said service and the end user is paying a sales tax on said item. If the retailer can decide to sell there items for whatever they want... it affects their income and there revenue and their ability to stay open.

The value of any new item (in a store) is the value of that item. Which is value of that item at the time the seller buys the item for resale... the mark up is the revenue they generate. There is tax paid.

The instance were you put the property on sale? All good and well because no one got paid anything for that discount. The "sale" is all within the businesses General Ledger and no one received benefit in the form of a monetary payment.

Trust me, CRA is already involved in these types of things.

[sebberry]

I remember the big fuss over employee discounts being taxable benefits. 

 

As Mike said, so much bureaucracy for something as simple as offering a break on rent for helping out around the place.

 

The sheep can milk themselves. 

[sdwright.vic]

I don't get the all upset about "bureaucratic" regulations, but actively seeking loopholes out of everything?

Maybe it's the job? Who knows way I don't believe people are all honest and such...

Maybe it's the possibility that if you have 180 collectors in a building and 108 of those collectors collect Trust Debt. 108 collectors have 170 files making 18,360 files being worked in one office. Each inventory is valued at $5-8 million dollars so at $7 million there is $756,000,000 not paid.

Said collectors closed a file, two files, those files are replaced immediately the next day because we have so many well meaning people out there that are just misunderstood.

Edited by sdwright.vic, 04 March 2018 - 01:31 PM.

[Bob Fugger]

I personally always go $100 less than what I think the market value is to obtain an exceptional tenant. Taking less than market is worth it to me and exchange for less time managing.

Interesting model.  I personally always go $100 more than market.  Same result, more money in my pocket.  The only certainty you appear to have is lower revenue.  Some arbitrary discount from market is completely unrelated to how much time one has to devote to managing their investment.  But I'll bite and give it to you that it is, just for sake of example.  Even if I have to show the place to 20 more applicants, at 30 minutes a showing, that works out to $120 per hour.  Which, given where I live and the state of my unites, is never the case.  I'm pretty OK with that ROI on my time.

Edited by Bob Fugger, 04 March 2018 - 05:10 PM.

[tjv]

If a store offers a mail in rebate on something taxes is applied at the full value of the sale of the item.

Retail sales are not considered income because there is an exchange of money for said service and the end user is paying a sales tax on said item. If the retailer can decide to sell there items for whatever they want... it affects their income and there revenue and their ability to stay open.

The value of any new item (in a store) is the value of that item. Which is value of that item at the time the seller buys the item for resale... the mark up is the revenue they generate. There is tax paid.

The instance were you put the property on sale? All good and well because no one got paid anything for that discount. The "sale" is all within the businesses General Ledger and no one received benefit in the form of a monetary payment.

Trust me, CRA is already involved in these types of things.

By your definition then someone could offer a sale price on the first year of rent, and then remove the sale discount after 12 months

[sdwright.vic]

Sure go ahead and try... see what the Tenancy Branch says. If your right then good on ya.

Don't understand the anamosity towards me though from some of you on this. I didn't write the laws.

But try this stress test. Can you charge GST/HST on you sale of residential housing?

Edited by sdwright.vic, 05 March 2018 - 06:43 AM.

[Mike K.]

Developers charge GST on new-build housing, that much I do know.

[sdwright.vic]

But not on rent, rent is zero rated. Also you gain get a first time home owners rebate of your GST/HST-

[tjv]

Sure go ahead and try... see what the Tenancy Branch says. If your right then good on ya.

Don't understand the anamosity towards me though from some of you on this. I didn't write the laws.

But try this stress test. Can you charge GST/HST on you sale of residential housing?

I'm just spit balling ideas, not saying they will work.  Even the Tenancy Branch doesn't have any real power, they are like cops, they can write tickets, but they need to prove it in a court of law if challenged

 

I have zero anomosity towards you on this.  I'm just working thru ideas and see what works and what doesn't

 

Secondly, don't we have a massive shortage of rental housing?  If anything government is just putting roadblocks in developers ways to want to build more rental housing.  Its their own fault why we didn't have much rental housing building between say 1975 and 2010

[tjv]

But not on rent, rent is zero rated. Also you gain get a first time home owners rebate of your GST/HST-

True, full rebates on housing valued under 350k and a partial between 350-450k.  Not even sure you can buy a new condo for less than 450k anywhere in the CRD

[Bob Fugger]

But not on rent, rent is zero rated. Also you gain get a first time home owners rebate of your GST/HST-

Residential rent is zero-rated.  Commercial rent is subject to GST.

[sdwright.vic]

Commercial is usually referred to as a lease... But I am just being technical (especially since we have only been referring to residential)

[Casual Kev]

To redirect this thread back to the rental market, as an outsider moving into the city in the near future:

 

My general impression is that price levels are similar to those in Lower Mainland suburbs (Richmond/Coquitlam specifically). What intrigued me the most is that price levels don't seem to vary much across localities until you get all the way to Langford or Central Saanich. It makes sense; if you're not in or near downtown then you're either by the ocean or by the mountains. Only Esquimalt and Rock Bay seemed a bit cheaper, but the buildings also seemed more dated than usual.

 

The price floor also seems to be quite high for a 1-bed - the most common asking prices for a 1-bed in the archetypal old wood-frame rental hover between $1,150 and $1,350, with bachelors going at around $1,000 if small sized. Most legal suites at detached homes are going for the same asking prices, sometimes even higher. It doesn't take much to upgrade to a newer rental or condo, though - I saw quite a few 80's/90's condos  going at the same price range, though these postings went quick. And there are some new condos going for $1,500-$1,600, mostly around downtown and Vic West. There's a ton of stock out of Langford; what gets you an old rental in the "core" will get you either a new legal suite or a smaller condo there.

 

I personally settled for $1,400 at one of the new rentals popping up downtown; figured I'd pay be the extra $200 or so to be close to work and have new everything, without worrying about mold or coin laundry not working or hearing my neighbor from across the building. The proximity+new premium would've been a lot higher in the Lower Mainland. I'm also fortunate that I don't smoke or have pets... the vast majority of new rentals don't permit either. Oh yeah, and I can't fathom trying to look for an apartment with kids tagging along - a friend of mine moved to Victoria not long ago with his wife and 2 daughters and all he found was an old Esquimalt 2-bed for $1,800... sometimes none of the laundry machines work, he says.

 

As an aside, prices have definitively spiraled waaay upwards over the past few years. Looking at CMHC reports, average 1-beds rents in Greater Victoria were $849 in October 2014 but $1072 in 2017 - that's a 26% increase in 3 years. Due to maximum rent increases, incumbent tenants didn't absorb all of the blow so new tenants are bearing even more of the cost. As an anecdote, I ran into an ad for a 1-bed at an old wood-frame for $1,150; I googled the address to check reviews and I found an older posting for the same kind of unit (same photos and all) from late 2014; they were charging $880 then. Oof.

[VicHockeyFan]

Thanks for that post.

[grantpalin]

Rental rates have certainly risen in the last two years, between my previous move and now. Contemplating doing another move later in the year to get back into the old neighbourhood and hopefully get a lower rent. Time will tell.