Mandatory Lease in Ontario: What You Need To Know

mandatory lease

Before Signing That Lease…

Beginning April 30, 2018, the Government of Ontario is mandating that all landlords use a standard form for a lease. This mandatory lease is to be used for all rentals, with the exception of care facilities, mobile parks and other housing that may be governed as social housing or do not fall under the Residential Tenancies Act, 2006 (“RTA”).

 

…Make Sure It’s The Right Lease

Here is the new lease. It is a 13-14 page document, setting out all the standard provisions of a rental agreement. The document is designed to meet the guidelines and laws that define the Residential Tenancies Act, 2006, and specifically outlines provisions so that the tenant understands exactly what is being said.

Take Note! Ten Changes You Need To Know

Specifically, the new lease highlights these areas where previously leases could be ambiguous or downright in violation of the RTA:

  1. The Rental Agreement specifies if the unit is a condominium and subject to rules. The RTA has never specified if rules of a condominium corporation supercede the RTA. Now, it is clear that, in the event the unit is within a condominium corporation, the condo rules will apply first. This means the condo rules are enforceable, even if the RTA says otherwise.
  2. The lease makes note that the tenant is not required to move at the end of a term, as per the information provided in the General Information section.
  3. Payment: the tenant cannot be required to provide post-dated cheques or pre-authorized payments by the landlord. The tenant may do so only if they choose to do so.
  4. The maximum NSF cheque fee is now set at $20.
  5. Where the tenant pays for electricity on a metered basis, the landlord is required to provide historical information on the average costs to that unit.
  6. Rental deposits cannot be damage deposits. Further, the landlord is required to pay the tenant interest annually on the amount held in trust by the landlord.
  7. Deposits for keys or other entry access equipment are limited to the cost of replacement, and not more.
  8. Smoking: the lease includes information that the tenant cannot be discriminated against, yet there is a section for additional smoking rules. The landlord can now make a request for a unit to be smoke-free, and certain guidelines will support that.
  9. Tenant Insurance: tenants can be required to have liability insurance, but cannot be required to have content insurance.
  10. Guests: Landlords cannot charge more for guests, and tenants do not have to inform the landlord about guests. A tenant can also choose to add a roommate to the unit, provided that the municipal standards are met (ie: not overcrowding).

The Biggest Changes

Get a copy of the lease. The landlord has 21 calendar days to provide a copy of the lease to the tenant. In the event that the landlord fails to provide the lease to the tenant, the tenant may withhold one months’ rent. If the landlord fails to provide a copy of the lease for another 30 days, the tenant may keep the withheld rent.

Additionally, if the landlord does not use the standard lease, or if the landlord does not provide the standard lease as above, the term of a one-year lease is no longer applicable, and the tenant is free to seek early termination with 60 days’ notice.

Finally, the lease also states that the entire lease is mandatory and cannot be changed.

Who Wins?

While you can argue that the tenant is getting the upper hand as a result of these changes, the flip side is that the grey area is getting smaller. Landlords can no longer bully tenants with terms and conditions that are void (like a no-pet clause), however tenants will be confronted by their own volition of agreeing to additional guidelines like smoke-free units.

In many ways, these changes are merely clarifications on the current rules. Many of you may not need to change anything; others will need to change more.

If you are a landlord, or thinking of becoming one, you will want to familiarize yourself with these changes, and with the new lease, as it is mandatory. If you are a renter, you will want to familiarize yourself with your rights and responsibilities as well.

After all, informed tenants and landlords make for better relationships!

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Pets are allowed! It sez so!

1 thought on “Mandatory Lease in Ontario: What You Need To Know”

  1. I have to wonder why anyone would be a landlord in Ontario. It doesn’t say that the government/rental board will go after unpaid rent or tenants who trash the place. Add rental increase limits below the increases of government services like hydro and it seems an index fund would be less of a headache and better returns. What about some incentives to persuade people to enter this arena like no/greatly reduced tax on rental income.

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