Understanding: Duplex, Triplex & Multi-Residential

Understanding the Differences: Duplex, Triplex, and Multi-Residential Properties (4+ Units)

Investing in residential real estate comes in many forms, but choosing between a duplex, triplex, or multi-residential property with four or more units can significantly impact landlord responsibilities. Whether you’re new to real estate investing or looking to expand your portfolio, understanding these differences will help you make informed decisions.

Property Definitions

Duplex: A residential building divided into two separate units, typically side-by-side or stacked. Each unit has its own entrance and living space.

Triplex: Similar to a duplex but with three separate units. These units can also be stacked or side-by-side.

Multi-Residential (4+ Units): A property with four or more individual units under one roof. This can include fourplexes, apartment buildings, or larger complexes.

Tenant and Landlord Board (LTB) Regulations

1. Duplex and Triplex Rules:

• Residential Tenancies Act (RTA): In Ontario, duplexes and triplexes fall under the Residential Tenancies Act, which offers tenants strong protections, including rent control and eviction rules.

• Owner-Occupied Exemptions: If the owner lives in one of the units and shares common spaces with the tenant, certain exemptions apply, allowing more flexibility in terminating tenancies.

• Maintenance: Landlords are responsible for maintaining the property and responding to tenant complaints or repair requests promptly.

2. Multi-Residential (4+ Units) Rules:

• Stricter Regulations: Multi-residential properties with four or more units are fully governed by the RTA, with fewer exemptions for landlords. This means stricter rent control measures and a more complex eviction process.

• Repairs and Maintenance: The landlord must ensure that all units meet provincial health and safety standards. Larger properties may also require regular inspections by municipal authorities.

• Rent Increases: Rent increases are limited to the provincial guideline unless the landlord applies for above-guideline increases (AGI) to cover major capital improvements.

• Eviction for Personal Use: In a fourplex or larger multi-residential property, landlords cannot use the N12 form to evict a tenant for personal use. This rule provides additional security for tenants in larger properties, limiting the grounds for eviction to other justifiable reasons under the RTA.

Key Takeaways for Investors

• Duplexes and triplexes are often more accessible to first-time investors due to less stringent regulations.

• Multi-residential properties require a larger initial investment but offer the potential for higher returns and scalability. However, they come with more complex landlord responsibilities.

• Understanding the nuances of tenant laws is crucial for long-term success in real estate investing.

Financing is another key point to consider when investing in these property types. If you’re considering investing in any of these, reach out to discuss the best strategy to meet your goals. Let’s build a portfolio that works for you!