September 24, 2020
Individuals and businesses in Ontario are generally free to enter into contracts with each other. When you form a legal agreement with another party each party becomes legally required to perform certain things. There are some kinds of contracts though that the law in Ontario is concerned about. Where the law feels that if parties are left to their own devices, individuals would be forced into unfair agreements that would have an important impact on their lives, it enforces specific requirements for those contracts. A commonly known and understood example of this is the minimum wage. Ontario law is concerned that individuals might enter into unfair employment agreements and so it makes it a requirement that employers pay their employees at least the minimum wage.
Another area where this happens is in residential renting and leasing. The Ontario Residential Tenancies Act (“RTA”) sets out specific requirements for rental agreements and establishes obligations that both landlords and tenants must follow. Despite the significant amount of people living in residential rental units, there are several common misconceptions about the law. It is important that new landlords, as well as new tenants, understand these misconceptions as they can cause significant and expensive problems down the road.
Myth: The lease is only for one year – if the tenant wants to keep the unit past that they must sign another lease.
Residential leases typically start with a one-year term. A tenant is responsible to pay rent for that entire year unless some event takes place which ends the lease. A landlord is also responsible for their tenancy obligations for that entire year as well. If the tenant wants to end the lease and move out, they must provide the landlord with 60 days notice that ends at the earliest on the last day of the term. When the term ends though, the lease does not end on its own. The lease automatically turns into a month-to-month lease. As a landlord, you cannot insist that a tenant signs another one-year lease to be able to stay in the unit. If the tenant does not choose to end their lease at the end of the one-year term, their lease will continue and become an indefinite month-to-month lease.
It’s important to note however that a landlord and tenant can still sign term leases after the original term if they want to – it’s not mandatory that all leases become month-to-month. If a tenant signs a new term lease then the new lease operates similarly to the original term lease. A tenant may, for example, agree to do so in exchange for their rent not being increased. That way the landlord has the security of being guaranteed to have a tenant for the new term and the tenant gets the benefit of a lower rent than if they went to month-to-month. A tenant cannot be forced to sign a new term lease though and if they choose not to, they are entitled to have the lease converted to month-to-month.
Myth: Any place rented for the purposes of living is subject to the rules from the Residential Tenancies Act.
There are exemptions from the Residential Tenancies Act. If the rented premises are exempted from the RTA then the province’s special rules regarding residential tenancies do not apply. There are some common-sense exemptions where individuals live in facilities that they do not own such as prisons and hotels however there are also other exemptions which more commonly cause legal issues. For example, if an individual rents a living space and shares a kitchen or bathroom with the landlord or their immediate family who also live in the building then their rental is exempt from the RTA.
There are also partial exemptions to the RTA. Where a post-secondary institution acts as a landlord, they are granted an exemption from the termination sections of the RTA that allows them to limit the entirety of the tenancy term when the lease is signed. For example, Queen’s University operates the Landlord Contract Program using this exemption. If a tenant leases a unit from a landlord that is part of the program then the landlord can require that the tenant’s lease ends at the end of the set term and the lease would not convert to month-to-month as set out above. A tenant would need to sign a new lease if they want to continue living there.
Myth: A tenant can be required to pay a deposit in case they cause damage to the rental unit.
A landlord is only allowed to ask for certain deposits from their tenant before the rental term begins. The most common is a rent deposit. A landlord can ask for a deposit in the amount of one month’s rent to be used to cover the tenant’s last month of rent. A landlord must request this deposit before the rental period begins. This deposit can only be used to cover the rent payment owed for the last month of the tenancy. If the rent increases during the life of the tenancy, then the landlord is permitted to ask that the tenant pay the extra amount necessary to have the rent deposit equal the new monthly rent. A landlord is not allowed to use this deposit to pay for any damages caused by the tenant. A landlord is allowed to demand that a tenant pays for any undue damage caused by the wilful or negligent actions of the tenant or their guests but the landlord must ask the tenant to pay separately and cannot use the rent deposit.
A landlord can also request a key deposit. This is a deposit taken to cover the cost of providing replacement keys to the tenant. It cannot be for more than the cost of replacing the keys and it must be refundable to the tenant at the end of their tenancy if no replacement keys were necessary. It’s important to note that an electronic fob used to open electronic locks on doors are considered keys for which a key deposit can be taken.
Myth: A landlord can, on their own, arrange to have a tenant who hasn’t paid their rent evicted.
A landlord cannot, on their own, have a tenant evicted and forced to leave the unit for non-payment of rent or for any other reason. An order from the Landlord and Tenant Board (“LTB”) is required to have a tenant evicted. There are various procedural requirements to notify a tenant of eviction and an application must be made to the Landlord and Tenant Board seeking the eviction order. A hearing will be scheduled at which point the LTB will consider whether or not to grant the eviction order. There are several grounds for eviction including non-payment of rent. An eviction cannot happen however until the order is made by the LTB. If the tenant still refuses to move out of the unit after the order is made, the landlord can have the Sheriff’s Office enforce the eviction and physically remove the tenant.
Myth: A landlord can prevent a tenant from having pets
A landlord in Ontario cannot prevent a tenant from owning pets in the rental unit. Any clause in the lease attempting to do so is considered void and cannot be enforced.
There are however situations where a tenant owning a pet can be grounds for eviction. If a tenant’s pet has in the past behaved in a way that interfered with the landlord’s or another tenant’s reasonable enjoyment of the property, then that is grounds to seek an eviction of the tenant. Additionally, if the pet is inherently dangerous to the safety of the landlord or other tenants or the landlord or other tenant is seriously allergic to the pet then those are also grounds to seek eviction.
It is an important distinction to note that while a landlord is prohibited from preventing a tenant from having a pet, they are not prevented from choosing not to rent to someone who has a pet. For example, if a prospective tenant owns a cat, a landlord who is allergic to cats is free to choose not to rent to that person. They cannot include in the lease that the tenant can never own a cat in the unit however if the tenant gets a cat, the landlord could have the tenant evicted on the grounds that they are seriously allergic.
There is also an exception relating to pets and condominiums. If a tenant is renting a unit that is a condominium and the condo corporation’s rules state that pets are not permitted then the tenant must follow the condo’s rules and are not permitted to have a pet in their unit.
The rules and regulations which set out what landlord and tenants can and can not do are extensive and often misunderstood. As with any legal matters, the best path forward will depend on the specific situation and the specific landlords and tenants. If you have any questions or concerns with a residential renting situation, or if you are involved in a landlord and tenant dispute, please call Ryder-Burbidge Hurley Foster at 613-546-2147 or contact us for assistance with your specific issue.
This article provides general information and does not constitute legal or other professional advice. It should not be relied on as legal advice or opinion. Please contact Ryder-Burbidge Hurley Foster for detailed legal advice should you have questions of any kind.