Landlords don’t have it easy. There are many rules that often leave you at the mercy of your tenants. If you are renting a property in Ontario, here’s the inside scoop on tenant rules and some important tips to keep you on the ball.
STANDARD LEASE TEMPLATE
As of April 30, 2018, it became law that you must use the standard lease template for all new leases. This amendment to the Ontario Residential Tenancy doesn’t apply to:
Sites in mobile home parks and land lease communities
Most social and supportive housing
Other special tenancies and co-operative housing
Keep in mind the standard lease can help protect you from disputes as you will be using a form provided by the government. Therefore, you are less likely to break any rules. Also, if you add a term that conflicts with the Residential Tenancies Act, 2006, the term cannot be enforced.
You can find the standard Residential Tenancy Agreement here.
Tenants have a right to request a copy of the standard lease in writing. You have 21 calendar days to provide it. This is important because if you don’t provide it, tenants can withhold one month of rent and after 30 days, that month’s rent is theirs to keep.
WHAT IS THE ONTARIO’S RESIDENTIAL TENANCIES ACT?
Ontario’s Residential Tenancies Act outlines the rules that apply to residential rental units. It applies to tenants living in private residential rental units, whether it’s a single or semi-detached house, apartment in a building or condominium, and secondary units such as a basement apartment. University and college residences and commercial properties are not included.
THE RENTAL FAIRNESS ACT, 2017
The Rental Fairness Act, 2017, made amendments to the Residential Tenancies Act, 2006 which included the standard lease as well as expansions to rent control to include all private rental units.
In most cases, the rent can’t exceed the numbers outlined in the rent increase guideline. The rules apply to most tenants including basement apartments, condos, care homes, mobile homes, and land lease communities, unlike the rules for using the standard lease.
Once the tenant moves in and has agreed to the rent amount the Rental Fairness Act rules apply. Even when raising the rent based on the guidelines provided, you have to give the tenant 90 days written a notice of the increase.
There are some exceptions to rising rent above the guidelines including:
Your municipal taxes and charges have increased by an “extraordinary” amount.
You performed significant renovations, repairs, replacements or new additions to the building or to individual units.
Your security costs have increased, or you added new security services.
You can apply to the Landlord and Tenant Board for approval to raise your rent as long as one or more of these exceptions apply.
RESOLVING RENT CONTROL ISSUES
The Landlord and Tenant Board determines if a unit is exempt from the rent increase guideline. You will need to provide proof a unit is exempt so maintaining records is very important including:
Building permits, permit applications, and plans
New home warranty documents
Documents from the builder
Before and after shots for renovations and improvements
For new units you’ll have to prove that the new unit was:
Completed after November 15, 2018
Was built in a previously unfinished space OR
Prove you lived in another part of the house when the new unit was first occupied.
EVICTION FOR NON-PAYMENT OF RENT
If you are evicting a tenant for not paying rent, you will complete Form L1 or L9 and a hearing will be scheduled. Keep in mind if the tenant has concerns about maintenance issues, harassment or the lawfulness of their rent, expect to hear about it at the hearing. You will NOT be notified about the issues to be presented which can be challenging.
To avoid issues, take these steps to prepare yourself for the worst:
Check for maintenance issues you can address prior to the hearing, or at least have estimates to show you plan to get the work done.
Take pictures to support your statements.
Review and bring copies of the original lease, rent increases and notices applying to the lease or rent.
Bring copies of any communication with the tenant and your responses.
Document proof that issues have been addressed or provide timelines showing when the issues will be addressed.
Be prepared to invest in maintenance issues and repairs you might have overlooked as a result of the hearing.
You can charge a tenant for NSF cheques to cover the administrative charges from the bank, as well as a $20 fee.
EVICTION FOR YOUR OWN USE
If you intend to evict a tenant to use the unit yourself, there are three points to remember:
1. You have to live in the unit for at least one year.
2. You cannot evict a tenant for this reason without providing compensation equal to one month’s rent or another unit the tenant agrees to rent.
3. It is an offence under the Residential Tenancies Act if you evict someone under the guise of living there, then re-rent or convert the unit within one year. In so doing you are acting in bad faith and could be fined up to $25,000.
To evict someone so you can use the unit you must complete and submit an N12: Notice to End your Tenancy form.
WHEN A TENANT WANTS TO BREAK A LEASE
If a tenant wants to break their lease, they can either assign the unit or sublet it with your agreement. However, you need a good reason to refuse the request. If the tenant feels you aren’t being reasonable, they can go to the Landlord and Tenant Board for an order ending the tenancy agreement early.
Assigning a unit transfers tenancy to another person with all the terms of the original rental agreement staying the same. Subletting insinuates that the tenant will return to the unit at some point. This means a subtenant moves in and pays the rent to the original tenant who then pays you.
If you discover a tenant has assigned or sublet your unit without your permission, you can apply to the Landlord and Tenant Board to evict both the tenant and the unauthorized occupant. However, you only have 60 days to file the application once you find an unauthorized tenant or they legally become the tenant.
A FEW MORE THINGS TO NOTE
Here are a few more things you need to know:
You can’t evict a tenant for pets, an unauthorized roommate or smoking. However, if you can prove that the pet, smoking or roommate is causing damage, interfering with other tenants' rights for reasonable enjoyment, are breaking the law, or putting the safety of others at risk you can apply to the Landlord and Tenant Board to end the tenancy.
You can’t interfere with vital services including electricity, heat, fuel, gas or water. This is a serious offence. Heat must remain at least 20 degrees Celsius from September 1 to June 15.
There you have it.
All you need to know about renting out a residential property in Ontario. At OnlyWith.ca, we have helped thousands of people find the right investment rental property for the best possible ROI. Reach out to one of our agents today.