Podcast Episode 12: “Condominium Conundrums 3/3 – Rental Pool Mysteries.”
In this podcast, you’ll hear about issues to watch out for when purchasing a condominium unit with an existing tenant and a rental pool. There is a formal process to join the rental pool and lots of paperwork!
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Rental Pool Mysteries
Here’s another e-mail I got from a member about a Rental Pool issue:
“Hi Barry. I closed on a condominium in Fort McMurray on October 1. We had an original closing date of December 1, but my joint venture partner decided that an October 1 date would work better. There was an existing tenant. So, due to tenant’s rights we had to assume the Rental Pool tenant and the balance of her lease for the months of October and November. That’s why I wanted a December 1 date, so we didn’t have to assume the tenant.
Anyway, the tenant moved out in the middle of November and left a carpet and the unit in very dirty condition which was what I thought she would do and that’s why I wanted a December 1 closing date, the end of her lease. I’m going to have to be firmer with my joint venture partner.
There is a clause in the Rental Pool agreement that says, “Property Manager to ensure that the property is cleaned and carpets are steamed cleaned as per the lease agreement with the tenant”. But, the On-Site management is now saying that their responsibility as manager ended once we assumed the lease. The management company did not access the unit at closing and are refusing to access and clean it now. What can I do to encourage them to implement the details in their agreement?”
Rental Pools and Rental Pool Agreements are tricky. In this particular case what happened was that our member did not join the Rental Pool. That is a formal process and involves signing the extremely detailed Rental Pool Agreement with the Rental Pool manager.
Since the Rental Pool Agreement wasn’t signed, no one was managing our members unit and there was no agreement to implement. They were on their own. If our member did not want to be part of the Rental Pool they should have obtained their own property management and had that property manager do a formal transition on management of the unit from the Rental Pool to the new manager. This involves getting assignments of existing leases and making sure that security deposits are properly transferred to the new manager.
As an aside, and not relevant to this Tale but important, many Rental Pool Agreements say that if you list your property for sale while a member of the Rental Pool, as soon as your unit goes vacant the rental Pool manager will not re-rent it. Remember this one if you are going to list your Rental Pool unit for sale.
Lessons Learned:
- When buying a condo unit, ask, “is there a Rental Pool?”
- If yes, are you joining the Rental Pool? If you are joining, get the Pool details, ask lots of questions.
- If you aren’t joining the Rental Pool, be very careful of the details transitioning Pool tenant to you.
Protect your Rental Pool interests with advice from an experienced Alberta real estate lawyer. Contact Barry now!
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