boosts
profitability, safety, and compliance
Conducting regular unit inspections boosts profitability, safety, and compliance
By David Gargaro
Regular unit inspections are essential to maintaining rental properties. They help to reduce expenses, increase revenues, improve tenants’ health and safety, and ensure compliance with legislative and insurance requirements.
Every province regulates how often you can conduct unit inspections. Rental property owners typically conduct unit inspections after tenants move out and before new tenants move in. However, inspecting units every few months (and seasonally) is reasonable and non-invasive. Follow provincial regulations when providing written notice prior to conducting a unit inspection.
Findings from unit inspections
Jim Garnett, President of Canadian Tenant Inspection Services Ltd., listed the most common issues identified during periodic rental unit inspections of units:
• Extra appliances causing higher utility costs
• Leaking faucets and pipes, water damage, and mold
• Electrical hazards, such as exposed wiring and overloaded power outlets
• Lack of rental insurance
• Pest infestations due to tenants’ failure to report them
• Fire safety violations, such as disabled smoke and carbon monoxide detectors
• Lease violations due to illegal subletting or unauthorized occupants/pets
• Hoarding and other mental health issues
• Unauthorized unit or room modifications and damage
• Illegal activities (e.g., drug trafficking, fraud, human trafficking, short-term rentals)
Conducting periodic unit inspections enables rental property owners to take immediate action to realize cost savings. Early remediation prevents further property damage and ensures compliance with local regulations.
“The most impressive feature for us is that typically we knew the status of condition of our common areas, or approximately 15 per cent of our building, without having a sense of condition of the remaining rentable 85 per cent of our properties,” said Mike Garisto, President, Columbus Charities Association. “While there are
initial startup costs of upgrading several identified deficiencies, it has streamlined maintenance to newer needs only and also made us aware of deficiencies that could be considered future problems in other suites.”
Benefits of regular unit inspections
Lower costs and higher revenues
Conduct detailed inspections to highlight potential issues and enable early intervention. A proactive approach prevents expensive repairs. It also helps with identifying potential breaches of tenancy agreements, which could prevent costly legal disputes.
Regular unit inspections can help to reduce expenses, including:
• Water bills (e.g., remediating leaky taps and pipes)
• Utility bills (e.g., removing unauthorized appliances)
• Building maintenance and repair bills (e.g., repairing leaky roofs and windows)
• New equipment purchases (e.g., performing maintenance to extend equipment lifespan)
Conducting regular unit inspections can increase revenues. Well-maintained properties increase in value over time and enable you to charge higher rental rates. Happy tenants lead to lower vacancy rates and stable income streams. Optimizing maintenance scheduling reduces overall maintenance costs. Identifying breaches in the rental agreement (when not corrected by the tenant) enables you to pursue an eviction and restore rental value.
“These inspections have helped to reduce the number of complaints from residents,” said Brent Marcotte, Superintendent of Properties, Columbus Charities Association. “If the noted deficiencies are corrected on an expedited basis, the subsequent inspections generally identify fewer issues. The reduction in noted deficiencies directly corresponds to a reduction in the number of complaints or issues received from residents.”
Compliance with insurance policy
Some insurance companies require rental property owners to conduct regular inspections to satisfy the terms of insurance policies. The frequency of inspections can vary according to building type, amount of insurance coverage, and the insurer’s specific requirements. For example, BC’s Tenancy Act allows monthly unit inspections, while an insurance provider might require inspections every three months.
“As insurers tighten their underwriting guidelines and capacity requirements, they are starting to place more emphasis on the overall condition of units, the schedule of inspections, and maintenance programs,” said James Malcolm, Vice President, Westland Express. “A formal inspection requirement could make insurers more likely to treat the risk more favourably.”
Follow your insurance policy’s due diligence requirements. Failure to conduct the minimum number of annual unit inspections can lead to
non-renewal of the policy, higher rates, and reduced coverage or denial of claims.
“Insurance companies are increasingly requiring landlords and property management companies to conduct unit inspections at least once or twice a year,” said Malcolm. “Insurers are also suggesting these parties maintain detailed logs of these inspections.”
Reduced liability and greater tenant safety
Rental property owners are legally required to provide a safe living environment. Regular unit inspections help with detecting maintenance issues before they escalate or become safety risks. Being proactive prevents accidents and creates a safer living environment.
Documenting inspections enables you to record a unit’s condition over time. This protects against disputes regarding unit damage or safety deposits. Documentation also supports insurance claims and serves as evidence during legal proceedings.
Human trafficking, prostitution, drug running, and other illegal activities have become more prevalent in rental properties. Conducting regular inspections helps to prevent these activities, as well as identifying crimes when they happen. Being proactive supports tenant safety and prevents criminal activities from occurring.
