You’ve scrimped and saved and finally, finally, you have enough to buy your first home.
You won’t have to ask anyone if you can paint the walls (you can use any colour you want), or change the flooring (no more peel-n-stick tiles), or put a modern vanity light in the bathroom (goodbye ’80s!) or…the list goes on.
You have a hefty downpayment, enough set aside for the title report, attorney’s fees, insurance, even groceries. You have everything covered.
Or do you?
You have a big checklist, and think you’ve remembered everything, but I bet (in your excitement of finally becoming a homeowner) you’ve forgotten all about your landlord. You know, the person that owns the place that you signed a lease for, and where you still live until your new home closes? The person you’ve been paying rent to for the past three years? The person who holds your damage deposit; and when you moved in started your lease with a full tank of heating oil and a full tank of propane?
Yeah, that landlord.
And guess what? Legally (and, lets face it, ethically) you’re on the hook because those items were included in the lease you signed three years ago.
If your rental unit has a bit more than the average or expected wear and tear, repairs for that will be coming out of your damage deposit. Maybe you were a bit overzealous with your picture hanging and there are quite a few large nail holes in the walls. Oh, and that wall mount for your awesome large-screen TV has some pretty big lag screws (remember the fun finding the studs behind the gyproc?). That repair comes out of your damage deposit.
Maybe you didn’t have peel-n-stick tiles, but had nice hardwood floors in your rental. Maybe your buddy who helped you move in was too lazy to lift your recliner and instead dragged it from the front door, leaving a nice, deep scratch in those nice hardwood floors all the way across the living room. That repair comes out of your damage deposit.
As a homeowner, you’ll have way more obligations than you did as a tenant.
The full tank of heating oil and/or propane you started with is stated in your lease. It doesn’t matter that oil was 68 cents a litre at the time and now it’s about a buck a litre. It doesn’t matter that propane has gone up by 23% percent since you started your lease. You’re responsible for either leaving the same amount in the tank(s) as when you started the lease, or paying for the difference as an adjustment. Either way, you could be looking at hundreds (or, depending on where you live, thousands) of dollars that you most likely didn’t budget for when planning out your home-buying costs.
Legally and ethically you can’t walk away from your existing obligations just because you have new ones. Talk to your REALTOR®, accountant, attorney and landlord ahead of time—at the start of your home search—and figure out where you stand with your budget, so you have enough set aside to take care of all of your new obligations, as well as your existing ones.