Be A Smart Tenant or Landlord

As real estate prices have risen in the area, affordability has lessened for many. As a result, more and more people are turning to rentals.

In our area there has been a number of investors who have purchased homes solely as rentals.  Many are newer homes, but with, unfortunately, high rents.

Renting comes with its own rules and regulations, which are often difficult to understand. Many do not understand the process and misunderstand what is permissible or the responsibilities of the landlord and the tenant.

NEW LEASE FOR ONTARIO LANDLORDS AND TENANTS

The Ontario Government has tried to clear up much of the confusion by drafting a standard residential lease. As of April 30^th all leases signed in Ontario must be on the new standard lease.

The new lease does explain in plain language exactly the terms and conditions of the rental, as well as the responsibilities of each party.  There is provision in the lease for extra items, not addressed in the standard lease, to be added.

Some landlords are professionals and conduct the rental of their unit in a businesslike manner; some are unfamiliar with the process and may not always act in a lawful or proper manner.

A LEASE IS AN ENFORCEABLE CONTRACT

Landlords and tenants both need to understand that a lease, or the offer to lease that precedes the signing of the lease, is a contract that is legally enforceable in the courts. The Ontario Government runs its own court, or The Landlord and Tenant Board, which handles disputes between landlord and tenant, and enforces the law. Contracts come with responsibilities on both sides and are enforceable. Once you enter into any contract, you are bound by the terms and conditions of the contract. If you breach the contract you may be held legally responsible, which may come with fines, penalties or orders to comply.

Be very careful when signing a lease or offer to lease. The new form is easy to read. Download it here if you wish: http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/FormDetail?OpenForm&ACT=RDR&TAB=PROFILE&SRCH=&ENV=WWE&TIT=2229E&NO=047-2229E)

If you do not understand any or part of the contract, consult a lawyer or a party who is very knowledgeable in residential rentals. A lawyer’s advice in this case may not cost a lot of money, and may be invaluable to either party when entering into a lease.

STANDARD AND SOMETIMES MISUNDERSTOOD LEASE CLAUSES

Here are some of the items covered by a lease, many of which are misunderstand in the rental marketplace:

• Who pays for utilities, parking, property maintenance is outlined here
• The landlord may request postdated cheques but cannot force the tenant to supply them.
• The landlord may ask for a rent deposit. But this rent deposit cannot be more than the frequency of the rent payment (weekly or monthly) and can only be used to pay for the last month’s rent. It is not a damage deposit. The landlord may not withhold the last month’s rent at the end of the rental period to cover damages. If collected, the landlord must pay interest to the tenant annually.
• Whether or not smoking is permitted in the rental unit is covered in the new lease. Smoking in common areas, under provincial law, is prohibited. If a lease is signed prohibiting smoking in the premises, the courts can and do enforce the prohibition.
• The landlord may refuse to rent to a tenant if the tenant has pets. But once occupied, the landlord cannot ban pets. (except in a condo with a no pets rule) There are penalties if the pets damage the property, and some pets are unlawful, such as vicious dogs or exotic animals.
• The Human Rights Code always supersedes the Residential Tenancies Act.
• If the landlord does not live up to his responsibilities the tenant may not withhold rent. The tenant must apply to the Landlord and Tenant Board for enforcement. If the tenant does not fulfill his responsibilities, the landlord may not evict or require extra payment unless he obtains an order from the Landlord and Tenant Board.
• Once the term of a lease is completed, the lease may be extended in writing for an additional term
• If the lease is not extended the tenant may not be evicted because the term is up. The lease will continue, under the same terms and conditions as written, on a month to month basis. The landlord cannot force the tenant to sign a new lease once a month to month tenancy is established.
• If the tenant wishes to vacate once the lease is complete they must give 60 day’s written notice to the landlord. If the landlord has reason to evict the tenant (an expired lease is not an allowable reason) he must give 90 day’s written notice to the tenant
• A landlord may end the tenancy and evict the tenant once he has obtained an order from the Landlord and Tenant Board. He can apply to end the tenancy because of: non- payment of rent, damage to the rental unit by the tenant or if the tenant interferes with the reasonable enjoyment of other tenants or the landlord, a need to substantially renovate the premises, or because the unit is required for the housing of the landlord or his immediate family.

This is not a comprehensive list of everything contained in the Residential Tenancies Act. You can read the Act on line or consult a lawyer if necessary. Do not rely on unqualified third party advice and remember changes are made to the Act from time to time.

READ AND UNDERSTAND BEFORE SIGNING

In conclusion, read over the lease very carefully before signing. Make sure everything discussed is in writing. Do not rely on verbal agreements. And do not be rushed into signing a lease before clearly understanding its contents.