Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to a residential lease or a tenancy agreement, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you.
This is the third of a series of blogs about residential lease agreements in Ontario. In the first blog, I talked about what residential lease agreements are, the impact of the Residential Tenancies Act, 2006 (the “Act”), and some of the Landlord’s obligations. In the second blog, I discussed the Tenant’s statutory obligations. In this blog, I’ll be discussing SOME of the terms you can find in a simple residential lease agreement. Note that, if the terms and conditions are already dealt with in the Act, you need not replicate them in the agreement and you can’t override them (so I just exclude them and simply point out in the agreement that, if a party wants to know, for example, how to terminate the residential lease agreement, they should turn to the Act). So on with the show…
Void Terms
To begin, it’s worth noting that the following terms in a Residential Lease Agreement are not enforceable under to the Act (so putting them in is only for show):
- No pet clauses (i.e. prohibiting the presence of animals): section 14
- Acceleration clauses (i.e. saying that all or part of the remaining rent for the term of the tenancy is due because the Tenant defaulted in paying rent or carrying out an obligation: section 15
- The requirement to provide post-dated cheques or permit automatic debiting of a bank account to pay the rent: section 108.
Term
The Term of a Residential Lease Agreement begins on a certain date (as specified in the Agreement) and continues for a term (e.g. 1 year, 6 months, etc.) until it is terminated in accordance with the Act. Yes, you read correctly: the tenancy can ONLY be terminated in accordance with the Act. It cannot expire. So what happens at the end of the initial term? Well, if the initial term was for fixed period (e.g. 1 year) and the Agreement is not renewed or terminated, then the Landlord and Tenant SHALL BE DEEMED to have renewed it as a MONTHLY Residential Lease Agreement containing the same terms and conditions that are in the expired Residential Lease Agreement: section 38(2). If the initial term was simply daily, weekly, or monthly and it was not renewed or terminated, then the Landlord and Tenant SHALL BE DEEMED to have renewed it for ANOTHER DAY, WEEK, OR MONTH Residential Lease Agreement (as the case may be) containing the same terms and conditions that are in the expired Residential Lease Agreement: section 38(2).
Termination
So how can the Residential Lease Agreement be terminated? Well, the easiest way is for the Landlord and Tenant to have agreed to terminate the tenancy: section 37(3). Note, however, that any such agreement to terminate the tenancy is VOID if it is given at the time the tenancy agreement is entered into or as a condition of entering into the tenancy agreement: section 37(5). The second easiest way (unfortunately) is for the Tenant to die! If there are no other Tenants left in the rental unit, then the tenancy shall be deemed to be terminated 30 days after the Tenant’s death: section 91.
The other big way to terminate a Residential Lease Agreement involves the Landlord giving NOTICE OF TERMINATION: if the Tenant vacates the rental unit in accordance with the notice of termination, then the tenancy is terminated on the termination date set out in the notice: section 37(2). So what entitled the Landlord to give proper Notice of Termination? Well, they can only give such Notice if the Act permits it. For example, the Landlord can give Notice if they, in good faith, require possession of the rental unit if they, their spouse, their children, or parents (among others) require it for residential occupation: section 48. The Landlord can also give notice of termination if they require possession of the residential unit to demolish it, convert it into something other than a residential premise, or do extensive repairs or renovations: section 50. There are specific requirements that must be met concerning the information that must appear in the Notice, the applicable time limits, and earlier termination by the Tenant. Make sure to review the Act carefully and consult a lawyer if you have any comments, questions, or concerns.
Security Deposit
The Act says that a Landlord can only require a Tenant to pay a rent deposit before entering into a Residential Lease Agreement. The amount that the Landlord may require cannot be more than whichever of the following is lesser: the rent for one rent period (e.g. if the rent period is 1 day, 1 week, 3 months, etc.) or the rent for one month. Typically, if the rent period is more than 1 month, then the Landlord cannot require the Tenant to pay more than one month’s rent in advance: sections 105 and 106.
Rent
The Landlord must provide – free of charge – a receipt for the payment of any rent, deposit, arrears, or any other amount paid to the Landlord: section 109.
A Landlord cannot increase the rent charged to a Tenant for a rental unit until 12 months have elapsed since the last increase in rent or since the day the rental unit was first rented: section 119. The Landlord must also provide 90 days written notice to the Tenant of their intention to increase the rent: section 116. There is a guideline under the Act for determining how much the Landlord can increase the rent by. The Landlord and Tenant can agree to increase the rent charged to the Tenant above that guideline if the Landlord carried out or undertakes to carry out a specified capital expenditure in exchange for the rent increase or the Landlord has provided or undertakes to provide a new or additional service in exchange for the rent increase: section 121. The Landlord can also apply to the Board for an order permitting the rent to be increased by MORE than the guideline in limited circumstances relating to the rental unit. These circumstances include extraordinary increases in the cost for municipal taxes and charges or utilities, eligible capital expenditures, and operating costs related to security services: section 126. If you’re a Landlord or a Tenant and need advice concerning rent, seek professional help.
General Terms
The General Terms appear at the end of the Residential Lease Agreement and help to fill in some of the gaps concerning the Agreement. Some of the terms you would normally find in the General Terms section in commercial agreements, however (e.g. assignment, governing law, and waivers), are already dealt with in the Act and need not be mentioned in this section of the Agreement. That said, the parties can still acknowledge that they understand and are entering into the Residential Lease Agreement voluntarily. They can also agree on how the Agreement can be amended (if at all). Finally, they can acknowledge that the Agreement supersedes all other Agreements – whether oral or written – relating to the lease of the rental unit.
By the way, if you are a Landlord and you are looking for an Ontario Residential Lease Agreement, you’ve come to the right place:
Residential Lease Agreement (Ontario)
A Landlord can use this Agreement to rent out a residential unit. This Agreement comes with a Rental Application. All of Dynamic Lawyers‘ legal forms are lawyer-prepared, simple to read, easy to customize, and only a fraction of the price a lawyer would charge. Also, each legal form comes with a FREE VIDEO GUIDE (watch a useful example of how this legal form can be customized), a FREE DL GUIDE (read helpful information about this legal form), and another FREE DL GUIDE that sheds valuable insight into how legal forms can be challenged. What are you waiting for?
This information and this sample video guide is NOT legal advice and is provided for informational purposes only. If you need an Ontario lawyer, go to Dynamic Lawyers and make a post.
