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Reinvesting in Your Rental Property

At Emerald Management & Realty Ltd., we take immense pride in delivering exceptional property management services and prioritizing the well-being of your investment. As part of our unwavering commitment to maintaining your property and attracting high-quality tenants, we are currently directing our attention to the essential spring and summer annual exterior maintenance. This comprehensive effort made in collaboration with our clients and in accordance with our management agreement, includes roof inspections, necessary repairs to building exteriors, and meticulous landscaping.

Importance of re-investing back into your rental property

It’s essential to recognize that re-investing back into your property goes beyond tenant satisfaction. It also plays a pivotal role in preserving your property’s value by ensuring that depreciating components endure for the long haul by:

1.Enhancing Tenant Satisfaction:

When you invest in the upkeep and improvement of your property, you create an inviting and well-maintained environment that attracts and retains high-quality tenants. Tenants are more likely to appreciate a property that is aesthetically pleasing, structurally sound, and thoughtfully landscaped. By focusing on spring and summer maintenance projects, such as roof inspections and repairs, exterior enhancements, and meticulous landscaping, you contribute to a positive tenant experience and foster a sense of pride in their living space.

2. Prolonging the Lifespan of Depreciating Components:

Property ownership comes with the inherent challenge of managing the natural wear and tear of various components. Roofs, building exteriors, and landscaping are subject to degradation over time. However, by reinvesting in these areas, you effectively prolong their lifespan and reduce the need for frequent, costly repairs or replacements. Regular inspections and timely repairs to roofs and building exteriors, such as repainting or addressing cracks, help mitigate potential issues before they escalate. Additionally, investing in landscaping upkeep not only enhances the property’s visual appeal but also promotes healthy growth and prevents potential hazards.

Depreciating components and wear-and-tear are further defined by the Residential Tenancy Dispute Resolution Service (“RTDRS”) as the amount of expected wear and tear on a property of time.  Essentially, wear-and-tear is defined as the natural occurrence in any property, and tenants are generally not responsible for normal wear-and-tear. This means that tenants cannot be charged for items that have depreciated or exceeded their life expectancy. For example, if you have carpet that is 20 years old and a tenant accidentally causes a stain, you cannot most likely charge them for the cost of replacing the carpet. Depreciation and the aging of property components are part of a landlord’s responsibility to reinvest in the property.

The formula used by the when applying depreciation and calculating rewards in a dispute being handled by the RTDRS is: 

Age/Expected Useful Life X Replacement Cost = Depreciated Value

For a summary of the expected useful life applicable to the type of property, visit: RDTRS Depreciation Table

3. Safeguarding Property Value:

Real estate investments hold substantial value, and it’s crucial to protect and enhance that value over time. By prioritizing reinvestment into your property, you ensure its long-term appreciation and financial stability. When your property is well-maintained and equipped with updated components, it becomes more attractive to potential buyers or investors in the future. Additionally, an investment property that exhibits a history of consistent upkeep and improvements demonstrates responsible ownership, which further bolsters its value.

4. Maximizing Return on Investment:

Reinvesting back into your property can yield significant returns in the form of increased rental income and reduced vacancies. A well-maintained property attracts tenants who are willing to pay a premium for a comfortable and visually appealing living space. Moreover, by investing in energy-efficient upgrades, such as insulated windows, efficient heating systems, or solar panels, you can reduce utility costs and attract eco-conscious tenants.

Key risks associated with avoiding repairs and preventative maintenance

A significant risk for owners who are reluctant or simply refuse to spend money on repairs is the potential for escalating damages and declining property value.

Here are some key risks associated with neglecting repairs:

  1. Increased Property Damage: Ignoring necessary repairs can lead to minor issues turning into major problems over time. For instance, a small leak left unaddressed can result in water damage, mold growth, or structural issues. By neglecting repairs, the damage can spread and become more extensive, leading to higher repair costs in the long run.
  2. Tenant Dissatisfaction and High Turnover: Neglected repairs negatively impact tenant satisfaction. When tenants experience unresolved maintenance issues, it can lead to frustration, inconvenience, and a diminished perception of the property’s quality. Unhappy tenants are more likely to seek alternative housing options, resulting in higher turnover rates and increased vacancy periods. This turnover can be costly in terms of lost rental income and expenses associated with finding new tenants.
  3. Legal and Liability Concerns: Failure to address necessary repairs can expose owners to legal and liability risks. Inadequate property maintenance may violate local health and safety codes, putting owners at risk of legal consequences, fines, or potential lawsuits from tenants. In the current insurance environment, insurers are also putting more emphasis on preventative maintenance programs and attention to upgrades of depreciating property. Moreover, neglecting repairs can compromise the safety and well-being of tenants, potentially leading to injuries or accidents on the property, for which owners could be held liable.
  4. Diminished Property Value: A property in disrepair will likely experience a decline in value over time. Prospective buyers or investors may be deterred from purchasing a property that requires substantial repairs or has a history of neglect. Additionally, lenders may be hesitant to provide financing for properties in poor condition. Neglecting repairs can result in a decreased market value and limit the potential return on investment.
  5. Negative Reputation and Difficulty Attracting Quality Tenants: Word travels quickly in the real estate and property management community, and neglectful owners may develop a negative reputation among tenants, real estate agents, and property management professionals. This reputation can make it challenging to attract quality tenants who seek well-maintained properties. Poor property conditions can also deter potential tenants from applying, reducing the pool of qualified applicants and potentially compromising rental income.

How to deal with wear-and-tear and tenant responsibilities

In Alberta, as in many jurisdictions, it is generally understood that tenants are not responsible for normal wear-and-tear on a rental property. Wear-and-tear refers to the gradual deterioration that occurs over time because of ordinary and reasonable use of the property by tenants. Examples of wear-and-tear include minor scuffs on walls, carpet wear in high-traffic areas, or fading of paint due to sunlight exposure.  On the other hand, tenants may be held responsible for damages caused by negligence, misuse, or intentional actions that go beyond ordinary wear-and-tear. These damages typically involve excessive and avoidable harm to the property, such as holes in walls, broken windows, or significant stains on carpets.

Caveat:  It is important to be mindful to differentiate tenant caused damages from normal wear-and-tear.  While tenants may be responsible for excessive damages resulting from negligence, misuse, or intentional actions, they are not accountable for the natural aging and deterioration of property components. Landlords should assess damages on a case-by-case basis, considering the age and condition of the items in question.

In summary, owners who refuse to invest in or defer necessary repairs put themselves at risk of incurring higher costs, losing tenants, facing legal issues, experiencing declining property value, and struggling to attract quality tenants. Proactive and timely maintenance is crucial to protecting the value of the property, ensuring tenant satisfaction, and minimizing potential risks and expenses in the long term.

Remember, the law generally recognizes that tenants should not be held accountable for the normal wear-and-tear that occurs as a result of their everyday use of the property. By reinvesting in your property, you fulfill your role as a responsible landlord, protecting your investment while providing a comfortable and well-maintained space for your tenants.

Note: It is always advisable to consult the specific regulations and guidelines of your local jurisdiction, including the Residential Tenancies Act or other relevant legislation, to ensure accurate and up-to-date information regarding tenant responsibilities and landlord obligations in your area.

At Emerald Management & Realty Ltd., we understand the value of reinvesting in your investment property. Through our ongoing commitment to exceptional property management services, we prioritize the well-being of your property and its financial success. By focusing on spring and summer maintenance projects, such as roof inspections, exterior repairs, and landscaping, we aim to enhance tenant satisfaction and ensure the longevity of your property’s depreciating components. Investing back into your property not only preserves its value but also maximizes returns and establishes a solid foundation for continued success in the real estate market.

Remember, when you invest in your property, you invest in your future. Let us help you achieve your property’s full potential and secure long-term prosperity.  Contact our team today, your property matters to you … and that matters to us! 

Air Quality Precautions during Forest Fires

Important Notice Regarding Forest Fires and Air Quality Precautions

Tuesday, May 16, 2023
Dear Residents,
Our province is currently facing a challenging situation with forest fires causing significant damage throughout Alberta. Our thoughts go out to all those affected by these destructive events.
While we have been fortunate to experience unseasonably warm weather recently, it is crucial to acknowledge the potential impact on air quality due to the ongoing fires. Today, we have witnessed how rapidly the air quality can change, emphasizing the need for vigilance and adaptability during this dynamic situation.
To ensure your safety and well-being, we kindly request that you follow the recommendations provided by Alberta Health Services:
  • Keep all windows and doors, including attached garage doors, closed as much as possible.
  • Turn down furnace thermostats and furnace fans to the minimum setting. Please note that you should not attempt to extinguish the pilot light.
  • If you have an air-conditioner, keep the fresh-air intake closed and the filter clean to prevent outdoor smoke from entering your home.
  • Avoid running fans, such as “whole-house fans” or “fresh air ventilation systems,” that may bring smoky outdoor air inside.
  • Ensure that all floor registers are switched to the closed position.
  • Close fireplace dampers on wood-burning fireplaces and refrain from using wood-burning fireplaces, wood stoves, or any smoke-producing appliances or features, including candles.
  • If you possess room air cleaners with high-efficiency particulate air (HEPA) filters, turn them on. Avoid using air cleaners that may produce ozone. Please refer to the manufacturer’s instructions for filter replacement, device placement, and recommended room size.
  • If applicable, turn off your Heat Recovery Ventilator (HRV) or put it into re-circulating mode while the air quality remains poor. Remember to turn on the HRV once the air quality improves in the coming days.
  • If you need to drive to another location, keep windows and vents closed. Utilize the re-circulate mode for car fans to prevent the intake of outdoor air. Please note that vehicles should not be used as a means of shelter.
  • Reduce levels of physical activity as necessary to minimize the inhalation of airborne pollutants.
  • Stay hydrated by drinking plenty of water to keep your nose and mouth moist.
In addition, we highly recommend signing up for air quality alerts at to stay informed about the latest developments.
For further information on protecting yourself and maintaining good health during Air Quality Advisories, we encourage you to visit the following resources:
Your safety is our utmost priority, and by taking these precautions, we can collectively help to ensure the well-being of our community during these challenging times. To help offer relief to those impacted by the crisis, we are collection donations for the Calgary Food Bank and have made a donation to the Alberta Fires Appeal managed by the Canadian Red Cross.  Donations for the Calgary Food Bank can be dropped off at our office during regular business hours.

Emerald Management & Realty Ltd. has built a reputation for quality and effectiveness, making us one of the go-to property rental companies in Calgary. During our 50 years in operation, we have encountered many problems and developed many solutions ensuring we can put our years of service and hard work to use in your favour and that the management of your property is worry-free.

We are dedicated to providing top quality care and service to our clients, and believe that our continuing success as a property management company in Calgary showcases our commitment to both relationships.


How to Prepare a Lease Agreement for a Rental Property

Renting out a property is a potentially profitable venture, but there are also potential issues that could arise. Having a lease agreement in writing can help in such situations.

What is a Lease Agreement and Why Do You Need One for a Rental Property?

A lease agreement is a contract between a landlord and a tenant. Among other things, the agreement outlines that the tenant is allowed to live in a property for a fixed period. This contract binds the landlord and tenant to the terms of the lease.

A lease agreement is important since it clearly outlines the terms and responsibilities for both the landlord and tenant. This can help clarify things if there are any disputes. While the lease does not need to be in writing, it is strongly recommended that it is. This protects all parties involved and ensures that everyone clearly knows what is expected of them.

The Different Parts of a Lease Agreement

There are several important parts of a lease. This includes the names of the landlord and tenant(s), the address and description of the property, the date that the tenancy is to start and length of the agreement, the amount of rent due and the mode of rent payment, the amount of the security deposit and where it is held, how the tenancy may be ended, and more.

What Should be Included in a Lease Agreement for a Rental Property?

Each lease is different, but there are certain aspects that should be included.

In addition to what is listed above, it’s important to include:

  •  Responsibilities for maintenance and repairs
  • Which utilities are included, and which are not
  • Insurance requirements
  • Rules regarding subletting
  • Information on any other fees
  • And much more

It is important to note that the Residential Tenancies Act is always enforced over any agreements made between the landlord and tenant. Therefore, if something in the agreement conflicts with the law, the law will apply. However, landlords and tenants can agree to other terms if they are not illegal.

For instance, the act says nothing about pets in a property. Therefore, landlords and tenants can agree to certain terms regarding pets if they wish.

If the property is a part of a building or condominium, there may be rules and bylaws associated with the property that the tenants will need to follow. In these situations, its a good idea for the landlord to provide the client with this information and state in the agreement that the tenant must follow these rules.

How to Protect Yourself and Your Property as a Landlord

Having a lease agreement in writing is one of the best ways to protect yourself as a landlord. Other ways to protect yourself include screening and choosing tenants wisely, doing a full walkthrough and completing a move-in inspection to document the rental properties condition.

It’s also important to be familiar with the province’s Residential Tenancies Act so that you know your rights and responsibilities as a landlord.

What to do if a Tenant Breaches the Lease Agreement

If a substantial breach of the lease agreement occurs, the landlord can apply to end the tenancy or give the tenant notice that the tenancy is being ended. At least 14 days of notice must be provided and the day the notice is given and the day the tenancy ends do not count as part of these 14 days.

A substantial breach by the tenant is typically a situation where a tenant does not pay rent in full when due, causes significant damage to the property, endangers others, or does not vacate the premises when tenancy ends.

In these instances, the landlord can apply to the Court or to the Residential Tenancy Dispute Resolution Service (RTDRS) to solve the dispute.

Managing properties and dealing with tenants can be time consuming and often difficult. We can help. Emerald Management & Realty Ltd. provides property management, property maintenance and rental property services and always provides the best possible support, care, and service. To find out more, please contact us online or call 403-237-8600.

The Underused Housing Tax in Canada: Impact and Implications for Property Owners

The Underused Housing Tax (UHT) in Canada: Impacts and Implications for Property Owners

As a property owner in Canada, you may be subject to the Underused Housing Tax (UHT).  The UHT is a new tax that came into effect on January 1, 2022.  This tax targets underutilized or vacant residential rental properties and aims to increase the supply of available housing, reduce real estate speculation, and promote better use of residential properties. 

While the UHT was primarily proposed to address issues related to foreign property owners, it also affects private Canadian corporations.  If you are subject to the UHT, you must file a return by April 30, 2023, and failure to do so may result in significant penalties.  It is essential to understand your obligations under the UHT and seek professional advice to determine how the tax may affect your investment strategies.  Please note that the information provided in this summary is for information purposed only, and it is recommended that you seek qualified professional advice to evaluate your specific circumstances.

NOTE: The CRA announced on March 27, 2023 that while filings are still due on April 30, 2023 (May 1, 2023), Underused Housing Tax penalties and interest waived for filings  after this deadline, but before October 31, 2023, will not be penalized. 
The Canada Revenue Agency (CRA) understands that there are unique challenges for affected owners in the first year of the Underused Housing Tax Act (UHTA) administration.

What is the Underused Housing Tax (UHT)?

The UHT in Canada imposes a tax on certain types of residential properties that are deemed to be vacant or underutilized.  UHT imposes a 1% annual tax on the value of residential real estate considered to be vacant or underused that is owned on December 31 or each year.  The goal of the UHT is to bring about positive changes in the Canadian housing market, benefiting both property owners and those seeking affordable housing options.

The Canada Revenue Agency (CRA) provides the following definitions for a property subject to the UHT:

  • A detached house or similar building that contains not more than three units, appurtenances*, and the related land
  • A semi-detached house, rowhouse unit, residential condominium unit, or other similar premises, along with any common areas, appurtenances, and the related land.

* Common examples of appurtenances are driveways, drainage ditches, fences, and rights of way.

Generally, the UHT applies to residential rental properties that are unoccupied or not being used to their full potential.  It is important to note that there are some exemptions and exclusions from the UHT, such as certain types of properties used for charitable purposes, affordable housing, or temporary accommodations.  Property owners should consult with their account or legal counsel to determine whether their properties are subject to the UHT and what their obligations are under this new tax.

Who MUST file the UHT?

The tax usually applies to non-resident, non-Canadian owners. In some situations, however, it also applies to Canadian owners:

  • Foreign investors who own rental properties in Canada
  • Individuals who are non-residents of Canada
  • Non-Canadians
  • Canadian private corporations
  • Trusts; and
  • Partners in a Canadian partnership

To determine if you are an excluded or included owner, visit: CRA – Underused Housing Tax and discuss with your accountant or lawyer.

What is the tax?

The tax is based on 1% of the value of the property annually, if vacant or considered underutilized.  To calculate what you owe, CRA advises to:

  1. Multiply the value of the residential property by the 1% tax rate.
  2. Then multiply that result by your ownership percentageof the property. 

You can determine the value of the property for the year for property tax purposes and by using the most recent sale price.   An owner can also elect to use the property’s fair market value as determined at any time during the year up and up to April 30 of the following year.  In the later situation, CRA will require an appraisal report prepared by an accredited, professional real estate appraiser operating at arm’s length from the owner.

What is considered “vacant”?

The CRA provides the following definitions for a “vacant” or “underutilized” property subject to the UHT:

  1. Vacant property – A property is defined to be vacant if it meets one of the following criteria:
    1. It does not contain any occupants on December 31 of the year in question, and it has not been rented or leased for at least 30 days in a row during the year.
    2. It is not ordinarily inhabited by individuals as their place of residence or lodging, and it is not being used for any other purpose.
  2. Underutilized property – A property is defined as underutilized if it meets one of the following criteria:
    1. It is occupied by one or more individuals, but it is not being used as a place of residence or lodging, and it is not being used for any other purpose.
    2. It is being used for a purpose other than as a place of residence or lodging, and that use is not consistent with the property’s ordinary use or any restrictions or conditions that apply to the property.

It is important to note that the definitions of vacant and underutilized properties under the UHT may be more restrictive than what property owners may consider “vacant” or “underutilized”.   Property owners should consult with their accountant or legal counsel to determine whether their properties meet the criteria.

What is taxable?

There are lots of rules to consider.  And lots of exemptions.  Essentially, a residential dwelling is generally defined by the CRA as a property that is either one of the following:

  • A detached house or similar building that contains not more than three units, appurtenances and the related land
  • A Semi-detached house, rowhouse unit, residential condominium unit or other similar premises, along with any common areas, appurtenances, and the related land

Example: Residential units less than 3 units in a single building are taxable.  Condominium units are also taxable.  So, if you own a 6 Plex, and it is a condominium, and … you own all the units, you will need to complete a separate filing for each unit. 

Is there a requirement to file?

Yes, there is a requirement to file, even if there is no tax owing. If the property AND you qualify, you must file even if fully occupied and no tax payable.

Under the UHT in Canada, property owners who fail to file their UHT returns by the due date or who fail to pay the tax owing may face penalties and interest charges.  The penalties for non-compliance are significate and can add up quickly.

Here are some details on the penalties that may apply:

  1. Failure to file penalty – It a property owner fails to file their UHT return by the due date (April 30), they may be subject to a penalty of $5000 for individuals or $10,000 for corporations … per unit! This means that if you own multiple units that are subject to the UHT and you fail to file a return for each unit, you may be subject to multiple penalties.
  2. Failure to remit penalty – If a property owner fails to pay the UHT owing by the due date, they may be subject to a penalty of 1% of the unpaid amount for each month that the tax remains unpaid, up to a maximum of 12 months.
  3. Interest charges – If a property owner fails to pay the UHT owing by the due date, they may be subject to interest charges on the unpaid amount. The interest rate is set by the CRA and may change from time to time.

Again, even though you may not have a requirement to pay this tax, you may still have the requirement to file a UHT.  In addition to the penalties and interest charges, property owners who fail to comply with the UHT may face other legal or financial implications, such as audits, assessments, or legal action.  It is essential to understand your obligations under the UHT and seek professional advice to ensure that you comply with the tax and avoid penalties or other consequences.

As highlighted above, the UHT could have significant impact on property owners depending on how your property and your ownership is structured.  It is crucial for property owners to stay informed about the details of the UHT and to review with your accountant how this new tax may affect your investment strategies. 

Taking the time to avoid penalty and to verify whether you have a filing and or a tax payment requirement for your properties (or both) is highly recommended.

Here are some additional references and resources for readers to learn more about the Underused Housing Tax (UHT) in Canada:

As discussed throughout this article, it is important to note that the information provided is for informational purposes only and it is not intended to provide legal or professional advice.  While we have made every effort to ensure the accuracy and reliability of the information provided, we cannot guarantee its completeness or suitability for any particular purposes.  Therefore, readers should seek the advice of qualified professionals that understand their individual situation and potential exceptions, that can provide advice tailored to their specific circumstances.  Emerald Management & Realty Ltd. does not accept any liability for any loss or damage arising from the use of this information.

The properties managed by Emerald Management & Realty Ltd. are primarily located in Calgary and surrounding areas such as Strathmore, Airdrie, Canmore and Cochrane.  Emerald Management & Realty Ltd. is proud to managed for local, national, and international property investors, who entrust their investment properties to Emerald Management & Realty Ltd. Our proven history has provided the opportunity to acquire invaluable knowledge and experience that can be passed on to our valued client base. Through the hard work of our dedicated team, we have built a strong reputation as one of the best property rental companies in Calgary.  For more information about the property management and maintenance services Emerald Management & Realty Ltd. provides, contact our team today!

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